UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended AUGUST 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-19623
MIAMI SUBS CORPORATION
(Exact name of registrant as specified in its charter)
Florida 65-0249329
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6300 N.W. 31st Avenue, Fort Lauderdale, Florida 33309
(Address of principal executive offices)
(Zip Code)
(954) 973-0000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at
October 6, 1998
Common Stock, $.01 par value 27,119,340
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
MIAMI SUBS CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
August 31, May 31,
ASSETS 1998 1998
- --------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents (including unexpended marketing fund
contributions of $1,356,000 and $970,000, respectively) $ 4,058,000 $ 3,457,000
Notes and accounts receivable - net 1,891,000 1,743,000
Food and supplies inventories 184,000 179,000
Other 67,000 77,000
Total Current Assets 6,200,000 5,456,000
Notes receivable 6,680,000 6,076,000
Property and equipment - net 10,786,000 11,612,000
Intangible assets - net 6,617,000 6,718,000
Other 443,000 464,000
----------- -----------
TOTAL $30,726,000 $30,326,000
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ---------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 4,821,000 $ 4,276,000
Current portion of notes payable and capitalized lease obligations 997,000 1,092,000
----------- -----------
Total Current Liabilities 5,818,000 5,368,000
Long-term portion of notes payable and capitalized lease obligations 5,387,000 5,613,000
Deferred franchise fees and other deferred income 1,527,000 1,577,000
Accrued liabilities and other 1,645,000 1,735,000
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, $.01 par value; authorized 50,000,000 shares 283,000 283,000
Additional paid-in capital 24,565,000 24,565,000
Accumulated deficit (6,892,000) (7,208,000)
17,956,000 17,640,000
Note receivable from sale of stock (563,000) (563,000)
Treasury Stock (1,044,000) (1,044,000)
------------ ------------
Total Shareholders' Equity 16,349,000 16,033,000
------------ ------------
TOTAL $30,726,000 $30,326,000
===================================================================== ============ ============
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
MIAMI SUBS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Three Months
Ended August 31, Ended August 31,
REVENUES 1998 1997
- ------------------------------------------------------------------ ----------------- -----------------
<S> <C> <C>
Restaurant sales $ 4,922,000 $ 4,778,000
Revenues from franchised restaurants 1,198,000 1,119,000
Net gain from sales of restaurants 43,000 11,000
Interest income 164,000 197,000
Other revenues - net 55,000 113,000
----------------- -----------------
Total 6,382,000 6,218,000
EXPENSES
- ------------------------------------------------------------------
Restaurant operating costs (including lease costs paid to Kavala,
Inc. of $24,000 in 1998 and $41,000 in 1997) 4,583,000 4,550,000
General, administrative and franchise costs 876,000 900,000
Depreciation and amortization 363,000 368,000
Interest expense 170,000 208,000
----------------- -----------------
Total 5,992,000 6,026,000
Income before provision for income taxes 390,000 192,000
Provision for income taxes 74,000 67,000
----------------- -----------------
Net income $ 316,000 $ 125,000
================== =================
Net income per share:
Basic $ .01 $ .00
================= =================
Diluted $ .01 $ .00
================= =================
Shares used in computing net income per share:
==================================================================
Basic 27,119,000 27,119,000
================================================================== ================= =================
Diluted 27,119,000 27,185,000
================================================================== ================= =================
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
MIAMI SUBS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Three Months
Ended August 31, Ended August 31,
------------------ ------------------
OPERATING ACTIVITIES: 1998 1997
------------------ ------------------
<S> <C> <C>
Net income $ 316,000 $ 125,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 253,000 259,000
Amortization of intangible assets 110,000 108,000
Net gain and franchise fee from sales of restaurants (68,000) (11,000)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 14,000 (194,000)
(Increase) decrease in food and supplies inventories (5,000) 14,000
Decrease in other current assets 10,000 1,000
Decrease (increase) in other assets 12,000 (6,000)
Increase in accounts payable and accrued liabilities 545,000 153,000
Increase (decrease) in deferred fees and accrued liabilities 6,000 (98,000)
---------------- -----------------
Net Cash Provided By Operating Activities 1,193,000 351,000
---------------- -----------------
INVESTMENT ACTIVITIES:
Purchase of property and equipment (462,000) (73,000)
Proceeds from sales of restaurants 80,000 10,000
Payments received on notes receivable 111,000 424,000
--------------- -----------------
Cash (Used For) Provided By Investment Activities (271,000) 361,000
--------------- -----------------
FINANCING ACTIVITIES:
Repayment of debt (321,000) (374,000)
--------------- -----------------
Cash (Used For) Financing Activities (321,000) (374,000)
--------------- -----------------
INCREASE IN CASH 601,000 338,000
CASH AT BEGINNING OF PERIOD 3,457,000 2,940,000
---------------- -----------------
CASH AT END OF PERIOD $ 4,058,000 $ 3,278,000
================= =================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 169,000 $ 209,000
================================================================================= ================== ==================
Loans to franchisees in connection with sales of restaurants $ 1,015,000 $ 190,000
================================================================================= ================== ==================
Acquisition of restaurants in exchange for notes receivable $ 168,000 $ 432,000
================================================================================= ================== ==================
See accompanying notes to consolidated financial statements.
</TABLE>
MIAMI SUBS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments, which are of a normal recurring
nature, necessary for a fair presentation of the Company's financial position
and results of operations for the periods presented. The financial statements
have been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all the
information and footnotes required for annual financial statements. The
financial statements included herein should be read in conjunction with the
financial statements presented in the Company's Annual Report on Form 10-K for
the year ended May 31, 1998.
Results of operations reported for interim periods are not necessarily
indicative of results for the entire fiscal year.
2. REVENUES FROM FRANCHISED RESTAURANTS
Revenues from franchised restaurants consist of the following:
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED AUGUST 31, ENDED AUGUST 31,
----------------- -----------------
1998 1997
----------------- -----------------
<S> <C> <C>
Royalties $ 1,037,000 $ 922,000
Franchise and development fees 132,000 142,000
Sublease rental income (net) and other 29,000 55,000
----------------- -----------------
Total $ 1,198,000 $ 1,119,000
================= =================
</TABLE>
3. NOTES AND ACCOUNTS RECEIVABLE
Notes and accounts receivable consist of the following:
<TABLE>
<CAPTION>
August 31, May 31,
1998 1998
------------ ------------
<S> <C> <C>
Notes receivable $ 7,864,000 $ 7,112,000
Royalties and other receivables due from franchisees 646,000 666,000
Other 208,000 229,000
------------ ------------
Total 8,718,000 8,007,000
Less allowance for doubtful accounts (147,000) (188,000)
------------ ------------
8,571,000 7,819,000
Less notes receivable due after one year (6,680,000) (6,076,000)
------------ ------------
Notes and accounts receivable-current portion $ 1,891,000 $ 1,743,000
==================================================== ============ ============
</TABLE>
Notes receivable at August 31, 1998, principally result from sales of
restaurant businesses to franchisees and are generally guaranteed by the
purchaser and collateralized by the restaurant businesses and assets sold.
The notes are generally due in monthly installments of principal and interest,
with interest rates ranging principally between 8% and 12%.
4. INCOME TAXES
The Company's federal income tax returns for fiscal years 1991 through 1996,
inclusive, have been examined by the Internal Revenue Service, and the IRS has
issued reports for such years reflecting substantial adjustments to previously
filed tax returns. The Company has appealed many of the proposed adjustments.
If the Company is not successful in its appeal, the Company's net operating
loss carryovers would be substantially absorbed by the proposed adjustments
and significant amounts of additional taxes, interest, and penalties would be
due. The Company believes that the accruals that it has provided in
connection with this matter are adequate.
5. PROPOSED REVERSE STOCK SPLIT
The Company's common stock is subject to delisting from the Nasdaq National
Market since it is not in compliance with the minimum bid price requirement
pursuant to NASD Marketplace Rule 4450 (a)(5), which became effective in
February 1998. In response to this action, in September 1998 the Company's
Board of Directors unanimously adopted a resolution to amend the Company's
Articles of Incorporation to effect a one-for-four reverse stock split of the
Company's common stock, pursuant to which each four shares of common stock
would be converted into one share of common stock. The reverse stock split is
subject to approval by the Company's shareholders. On September 25, 1998, a
hearing was held before a Listing Qualifications Panel authorized by NASD in
which the Company requested an extension of time to effectuate the
reverse-stock-split and come into compliance with the minimum bid price
requirement. The delisting action has been stayed pending final determination
by the Listing Qualifications Panel on this request.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION
The Company's revenues are derived principally from operating, franchising,
and financing Miami Subs restaurants. Franchise revenues consist principally
of initial franchise fees and area development fees, monthly royalty fees, and
net sublease rental income. In the normal course of its business, the Company
also derives revenues from the sale of restaurants to franchisees, and
interest income from financing the sale of restaurants to franchisees.
Restaurant operating costs include food and paper costs, direct restaurant
labor and benefits, marketing fees and costs, and all other direct costs
associated with operating the restaurants. General, administrative and
franchise costs relate both to Company owned restaurants and the Company's
franchising operations.
The Company's revenues and expenses are directly affected by the number, sales
volumes, and profitability of its Company operated restaurants. Revenues, and
to a lesser extent expenses, are also affected by the number and sales volumes
of franchised restaurants. Initial franchise fees and the net gain on sales
of restaurants are directly affected by the number of restaurants opened by
franchisees and the number of restaurants sold to franchisees during the
period.
During the current quarter, the Company finalized a co-branding licensing
agreement with Arthur Treacher's, Inc. ("Treacher's"). Under the agreement,
franchised and Company owned Miami Subs Grill restaurants may become
franchisees of Treacher's and sell Treacher's products in the restaurants. As
of August 31, 1998, ten Miami Subs Grill restaurants have implemented the
co-branding program and were selling Treacher's products. Since most of these
co-branding additions took place during August 1998, the Company does not
believe that it had a significant impact on its business or operations during
the current quarter.
The Company's ability to sustain and improve profitability will, among other
factors, be dependent on the continuing improvement of sales and operating
margins in existing Company and franchised restaurants, successful expansion
of its franchise base, its ability to control future operating costs, and the
successful operation of existing and new restaurants on a profitable basis by
franchisees.
The Company's fiscal year ends on May 31. The results of operations for the
three months ended August 31, 1998 are not necessarily indicative of the
results that may be expected for the Company's fiscal year.
During the three months ended August 31, 1998, four franchised restaurants
opened, and three franchised restaurants closed. In addition, the Company
sold four restaurants to franchisees, and acquired two restaurants from former
franchisees. At August 31, 1998, there were 192 restaurants in the system,
consisting of 16 Company operated restaurants and 176 franchised restaurants.
At August 31, 1997, there were 191 restaurants in the system, consisting of 17
Company operated restaurants and 174 franchised restaurants.
COMPARISON OF THREE MONTHS ENDED AUGUST 31, 1998 TO AUGUST 31, 1997
Total Revenues
Total Company revenues increased 2.6% to approximately $6.4 million in the
first quarter of the current year, as compared to $6.2 million in the first
quarter of the prior year. The increase in total revenues resulted
principally from an increase in company-operated restaurant sales and
franchise revenues, which were partially offset by a decrease in interest
income and other revenues.
Restaurant Sales
The Company's total restaurant sales increased 3.0% to approximately $4.9
million in the current quarter, as compared to $4.8 million in the prior year
quarter. The increase in sales resulted principally from additional
restaurants operated by the Company for a part of the current period.
Same-store-sales for all comparable Company operated restaurants (computed for
15 restaurants operated by the Company since December 1996) declined by 0.2%
in the current quarter. However, for the Company's nine core restaurants
which are principally located in Florida, same-store-sales for the first
quarter increased by approximately 1.2%. Same-store-sales for the Company's
restaurants in the year earlier quarter were down approximately 6.4%. The
Company attributes the improvement in same-store-sales principally to the
changes which were implemented during the prior fiscal year relating to
pricing, marketing, and operations.
At August 31, 1998, Company operated restaurants were located in Florida (9);
Texas (6), and New York (1). Subsequent to August 31, 1998, the Company
transferred the operations of two of the Texas restaurants to a franchisee
pursuant to a management agreement and the Company currently plans to sell or
transfer to franchisees up to five of the remaining restaurants. However,
there can be no assurance that any such sales will be consummated at terms
acceptable to the Company.
Revenues From Franchised Restaurants
Revenues from franchised restaurants amounted to approximately $1.2 million in
the current quarter, as compared to $1.1 million in the prior year quarter.
In the current year's first quarter, four franchised restaurants opened, the
Company sold/transferred four restaurants to franchisees, and three franchised
restaurants closed. At quarter end there were 176 franchised restaurants, as
compared to 174 franchised restaurants one year ago. Royalty income in the
current quarter increased to $1,037,000, as compared to $922,000 in the prior
year quarter, principally from the opening of new restaurants since the prior
year quarter, and improved collections of delinquent royalty fees. At August
31, 1998, 23% of franchised restaurants have been granted a temporary waiver
from paying royalty fees or were delinquent and not paying royalty fees to the
Company.
Same-store-sales for all comparable franchised restaurants (computed for
franchised restaurants in operation since December 1996) continued the recent
trend of improvement, declining by approximately 1.6% in the current year's
first quarter. Although negative, the decline for the quarter represents the
fourth consecutive quarterly improvement in same-store-sales (in the prior
year quarter, same-store-sales at franchised restaurants declined by
approximately 10.4%, but improved each quarter during the fiscal year).
Same-store-sales for the franchised restaurants located in Florida (which
represents approximately 75% of the restaurants included in the
same-store-sales calculation) declined by just .3% for the current quarter.
The Company attributes the improvement in same-store-sales principally to the
changes which were implemented during the prior fiscal year to pricing,
marketing, and operations.
The Company leases/subleases principally Miami Subs restaurant facilities to
franchisees and such net revenues have been adversely affected from the
delinquency and non-payment of certain of these leases/subleases. At August
31, 1998, ten restaurant facilities which are leased/subleased to franchisees
were in various stages of delinquency. During the current quarter, the
Company reacquired one restaurant from a franchisee as a result of the default
of the lease and note payable to the Company. The restaurant was resold
during the quarter to another franchisee which resulted in a gain being
realized by the Company.
System-Wide Sales
System-wide sales, which includes sales from all Company operated and
franchised restaurants, increased to approximately $38.2 million in the
current quarter, as compared to $37.8 million in the prior year quarter. The
increase in system wide sales principally reflects higher sales from new
restaurants which opened since the prior year quarter. Same-store-sales for
all comparable restaurants in the system declined by approximately 1.6% in the
current quarter, representing the fourth consecutive quarterly improvement in
system wide same-store-sales. Same-store-sales for the system in the prior
year quarter were down approximately 10.1%. The Company attributes the
improvement in same-store-sales principally to the changes which were
implemented during the prior fiscal year relating to pricing, marketing, and
operations.
Net Gain From Sales of Restaurants
As a part of the Company's strategy to focus future growth and operations in
franchising, the Company sold four restaurants to franchisees during the first
quarter of the current year, as compared to two restaurants that were sold in
the year earlier quarter. Gains on the sale of restaurants are dependent on
the Company's basis in and the overall performance of such units. Gains
realized are recorded as income when the sales are consummated and other
conditions are met, including the adequacy of the down payment and the
completion by the Company of its obligations under the contracts. Total
deferred gains on the sales of restaurants amounted to $749,000 at August 31,
1998. Although the Company intends to sell other existing Company operated
restaurants in the future, there can be no assurance that any such sales will
be consummated on terms acceptable to the Company. In addition, it is not
anticipated that significant gains will be realized from such sales.
Interest Income
In connection with its strategy of focusing growth in franchising, the Company
has continued to sell restaurants to franchisees and has provided financing
for such sales. During the current quarter, loans in the amount of $1,015,000
were made to franchisees in connection with the sale of four restaurants
during the quarter. Total notes receivable amounted to approximately $7.9
million at August 31, 1998, as compared to $8.8 million at August 31, 1997. At
August 31, 1998, nine individual notes receivable which are due from five
franchisees with outstanding balances totaling approximately $1.8 million (net
of deferred fees and credits) were delinquent in monthly payments due to the
Company. As a result of these delinquencies and the lower average balance of
notes receivable outstanding during the quarter, interest income declined to
$164,000 in the current quarter, as compared to $197,000 in the year earlier
quarter.
Other Revenues - Net
Other revenues - net declined from $113,000 in the prior year quarter to
$55,000 in the current quarter. The decline resulted principally form costs
associated with certain properties that were unleased during a portion of the
current quarter and non-recurring revenues realized in the prior year quarter.
All of the properties have been subsequently leased to third parties.
Restaurant Operating Costs
Restaurant operating costs in Company operated restaurants amounted to
approximately $4.6 million or 93.1% of sales in the current quarter, as
compared to 95.2% of sales in the prior year's first quarter. The improvement
in restaurant operating costs as a percent of sales was principally due to
improved supervision and controls over food, paper, and labor costs in the
current quarter.
General, Administrative and Franchise Costs
General, administrative and franchise costs amounted to $876,000 or 13.7% of
total revenue in the current quarter, as compared to $900,000 or 14.5% of
total revenue in the prior year quarter. Following a reduction in its
corporate infrastructure last year, the Company continues to maintain strict
costs controls in all areas of its business, and does not currently anticipate
any significant increase to current operating cost levels.
Interest Expense
Principally as a result of the repayment of outstanding debt from
approximately $8.0 million at August 31, 1997 to $6.4 million at August 31,
1998, interest expense decreased to $170,000 in the current quarter, as
compared to $208,000 in the prior year quarter.
Provision for Income Taxes
The Company's federal income tax returns for fiscal years 1991 through 1996,
inclusive, have been examined by the Internal Revenue Service, and the IRS has
issued reports for such years reflecting substantial adjustments to previously
filed tax returns. The Company has appealed many of the proposed adjustments.
If the Company is not successful in its appeal, the Company's net operating
loss carryovers would be substantially absorbed by the proposed adjustments
and significant amounts of additional taxes, interest, and penalties would be
due. The Company believes that the accruals that it has provided in
connection with this matter are adequate. The Company is providing currently
for taxes on income based on the expected effective tax rate for the year.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of the current year, the Company's principal sources
of cash were from operating activities totaling $1,193,000, and principal
payments received on notes receivable of $111,000. The Company's principal
uses of cash in the current quarter were for scheduled debt repayments of
$321,000, and the acquisition of a franchised restaurant and property
renovations and improvements totaling approximately $462,000. Cash and cash
equivalents at August 31, 1998, amounted to $4,058,000 (which includes
unexpended marketing fund contributions of $1,356,000), as compared to
$3,457,000 (including $970,000 in unexpended marketing fund contributions) at
May 31, 1998. At August 31, 1998, the Company's working capital position
improved to $382,000, as compared to $88,000 at May 31, 1998, and a deficit of
$1,085,000 one year ago. The Company's working capital position has improved
principally as a result of improved operating results over the past year. The
Company is able to operate with a low working capital position or deficiency
because restaurant operations are conducted primarily on a cash basis, rapid
turnover and frequent deliveries allow a limited investment in inventories,
and accounts payable for food, beverages and supplies usually become due after
the receipt of cash from the related sales.
In addition to scheduled debt maturities/repayments for the remainder of
fiscal year 1999 of approximately $786,000, the Company's capital requirements
for the balance of the current fiscal year relate primarily to planned capital
expenditures to certain Company operated restaurants in connection with
co-branding agreements with Arthur Treacher's, Inc. and BAB Holdings, Inc.,
other necessary or required capital improvements to existing restaurants, and
certain enhancements to corporate and restaurant management information
systems. The estimated cost of these planned capital expenditures is not
expected to exceed approximately $325,000.
In September 1998, the Company's Board of Directors authorized the Company to
repurchase from time to time up to five percent of the Company's common stock
in open market transactions at current market prices. Based on the current
market price of the common stock and the number of shares outstanding, the
Company has allocated approximately $425,000 for this purpose.
The Company expects that competition in the quick-service restaurant industry
will continue to be intense and will remain so in the foreseeable future,
resulting in continued pressure on sales and operating profit, and slower
development of traditional restaurants by franchisees. The Company, through a
co-branding licensing agreement with Arthur Treacher's, Inc., is currently
offering Arthur Treacher's fish products in a limited number of its
restaurants, and will begin testing the sale of Big Apple Bagels, My Favorite
Muffins, and Brewster's Coffee products in a Company restaurant in the second
quarter. The Company also intends to pursue other co-branding opportunities
in the future. Continued emphasis will also be placed on franchising
non-traditional restaurants and certain of the Company's existing restaurants,
improving the performance of Company and franchised restaurants, developing
new products, enhancing the effectiveness of marketing programs, and overall
improvement and possible refinements to the entire system.
Seasonality
The Company does not expect seasonality to affect its operations in a
materially adverse manner. However, the Company's restaurant sales during its
first and fourth fiscal quarters have historically been higher that its second
and third quarters.
Forward-Looking Statements
Certain statements contained in this report are forward-looking statements
which are subject to a number of known and unknown risks and uncertainties
that could cause the Company's actual results and performance to differ
materially from those described or implied in the forward-looking statements.
These risks and uncertainties, many of which are not within the Company's
control, include, but are not limited to economic, weather, legislative and
business conditions; the availability of suitable restaurant sites on
reasonable rental terms; changes in consumer tastes; ability to continue to
attract franchisees; the ability to purchase primary food and paper products
at reasonable prices; no material increases in the minimum wage; and the
Company's ability to attract competent restaurant and managerial personnel.
PART II. OTHER INFORMATION
ITEM L. LEGAL PROCEEDINGS
Reference is made to Part I, Item 3, Legal Proceedings, in the Company's
Annual Report on Form 10-K for the fiscal year ended May 31, 1998
for a description of legal proceedings involving the Company. Since
May 31, 1998, there have been no material developments in these legal
proceedings.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
NONE
(b) Reports on Form 8-K
NONE
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
MIAMI SUBS CORPORATION
Date: October 6, 1998 By: /s/ Jerry W. Woda
JERRY W. WODA
Senior Vice President,
Chief Financial Officer,
and Principal Accounting
and Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-END> AUG-31-1998
<CASH> 4,058,000
<SECURITIES> 0
<RECEIVABLES> 2,038,000
<ALLOWANCES> (147,000)
<INVENTORY> 184,000
<CURRENT-ASSETS> 6,200,000
<PP&E> 15,343,000
<DEPRECIATION> (4,557,000)
<TOTAL-ASSETS> 30,726,000
<CURRENT-LIABILITIES> 5,818,000
<BONDS> 0
0
0
<COMMON> 283,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 30,726,000
<SALES> 4,922,000
<TOTAL-REVENUES> 6,382,000
<CGS> 4,583,000
<TOTAL-COSTS> 5,822,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 170,000
<INCOME-PRETAX> 390,000
<INCOME-TAX> 74,000
<INCOME-CONTINUING> 316,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 316,000
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
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