<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1997
--------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to _________
Commission File Number: 0-20528
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Austin's International, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 65-0322000
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2400 E. Commercial Boulevard, Suite 800, Fort Lauderdale, Florida 33308
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(Address of Principal Executive Office)
(954) 772-0980
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(Issuer's Telephone Number)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes _______ No ______
Not Applicable
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practical date:
Common Stock $.01 Par Value - 10,003,550 shares as of November 6, 1997
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Transitional Small Business Disclosure Format (check one) Yes X No
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Part I: FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
The following unaudited financial statements and documents required by Item
310(b) of Regulation S-B are attached hereto as Exhibits "A - D":
Consolidated Balance Sheet - As of
September 30, 1997, and March 31, 1997 Exhibit "A"
Consolidated Statements of Changes
in Shareholder's Equity - For the
Period from March 31, 1997
through September 30, 1997 Exhibit "B"
Consolidated Statements of Operations -
For the three month and six month periods ended
September 30, 1997, and September 30, 1996 Exhibit "C"
Consolidated Statements of Cash Flows -
For the three month and six month periods ended
September 30, 1997, and September 30, 1996 Exhibit "D"
Notes to Consolidated Financial Statements
2
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EXHIBIT A
AUSTIN'S INTERNATIONAL, INC.
Consolidated Balance Sheet as of
September 30, 1997 and March 31, 1997
<TABLE>
<CAPTION>
YEAR END
09/30/97 3/31/97
*********************************************************************************************
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
CASH AND EQUIVALENTS $84,371 $171,724
ACCOUNTS RECEIVABLE $27,560 $111,023
INVENTORIES $100,884 $120,785
OTHER CURRENT ASSETS $110,646 $83,563
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TOTAL CURRENT ASSETS $323,461 $487,095
PROPERTY AND EQUIP
BLDG. & LEASEHOLD IMPROVEMENTS $2,559,828 $2,544,992
RESTAURANT FIXTURES & EQUIP $1,081,338 $1,009,254
OTHER FIXTURES & EQUIPMENT $133,517 $133,642
------------ ------------
$3,774,683 $3,687,888
LESS ACCUM DEPRECIATION ($1,496,877) ($1,332,756)
------------ ------------
$2,277,806 $2,355,132
SECURITY DEPOSITS & OTHER ASSETS $52,749 $71,394
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TOTAL ASSETS $2,654,016 $2,913,621
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $471,280 $233,608
NOTES PAYABLE $1,408,450 $1,068,000
ACCRUED EXPENSES $64,612 $108,239
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TOTAL CURRENT LIABILITIES $1,944,342 $1,409,847
NOTES PAYABLE, LESS CURRENT PORTION
OTHER NON-CURRENT LIABILITIES $119,209 $122,209
------------ ------------
TOTAL LIABILITIES $2,063,551 $1,532,056
SHAREHOLDERS' EQUITY:
COMMON STOCK, $.01 PAR, 50,000,000 $100,035 $100,035
ADDITIONAL PAID-IN CAPITAL $8,471,553 $8,471,553
ACCUMULATED DEFICIT ($7,981,123) ($7,190,023)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY $590,465 $1,381,565
------------ ------------
TOTAL LIABILITIES AND EQUITY $2,654,016 $2,913,621
</TABLE>
3
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EXHIBIT B
AUSTIN'S INTERNATIONAL, INC.
Consolidated Statement of Changes in Shareholder's
Equity for the Periods from March 31, 1997 through
September 30, 1997
<TABLE>
<CAPTION>
ADDITIONAL
PAID-IN ACCUMULATED SHAREHOLDERS'
SHARES PAR VALUE CAPITAL DEFICIT EQUITY
*************************************************************************************************************************
<S> <C> <C> <C> <C> <C>
BALANCE MARCH 31, 1997 (AUDITED) 10,003,550 $100,035 $8,471,553 ($7,190,023) $1,381,565
CONVERSION OF DEBT TO COMMON STOCK $0 $0
NET LOSS ($791,100) ($791,100)
---------- ------------ ----------- ------------ ------------
BALANCE SEPT. 30, 1997 (UNAUDITED) 10,003,550 $100,035 $8,471,553 ($7,981,123) $590,465
========== ============== =========== ============ ============
</TABLE>
4
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EXHIBIT C
AUSTIN'S INTERNATIONAL, INC.
Consolidated Statement of Operations for the Three Months
and Six Months ended September 30, 1997 and September 30, 1996
<TABLE>
<CAPTION>
3 MO ENDED 3 MO ENDED 6 MO ENDED 6 MO ENDED
09/30/97 09/30/96 09/30/97 09/30/96
********************************************************************************** *************************************
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
NET SALES $611,680 $1,821,232 $1,584,659 $3,725,328
OTHER REVENUES $2,529 $7,230 $3,487 $17,936
INTEREST $30 $1,472 $4,150 $4,283
------------ ------------ ------------ ------------
TOTAL REVENUES $614,239 $1,829,934 $1,592,296 $3,747,547
COSTS AND EXPENSES:
FOOD AND BEVERAGE COSTS $241,820 $692,636 $599,324 $1,392,662
PAYROLL AND RELATED COSTS $275,142 $667,434 $667,659 $1,335,333
OTHER RESTAURANT OPERATING EXP $303,041 $579,251 $685,030 $1,122,604
GENERAL AND ADMIN EXPENSES $101,269 $140,305 $199,172 $295,173
DEPRECIATION AND AMORTIZATION $75,727 $124,761 $181,733 $227,544
INTEREST EXPENSE $26,283 $17,361 $50,476 $45,711
------------ ------------ ------------ ------------
TOTAL EXPENSES $1,023,282 $2,221,748 $2,383,394 $4,419,027
------------ ------------ ------------ ------------
NET LOSS ($409,043) ($391,814) ($791,098) ($671,480)
NET LOSS PER SHARE ($0.041) ($0.039) ($0.079) ($0.072)
WEIGHTED AVE SHARES OUTSTANDING 10,003,550 10,003,550 10,003,550 9,298,550
</TABLE>
5
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AUSTIN'S INTERNATIONAL, INC. EXHIBIT D
Consolidated Statement of Cash Flow for the six
months ended September 30, 1997 and September 30, 1996
<TABLE>
<CAPTION>
6 MO ENDED 6 MO ENDED
09/30/97 09/30/96
*****************************************************************************************************************
<S> <C> <C>
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) ($791,098) ($671,480)
Adjustments to reconcile net income to net cash from operations:
Depreciation and amortization $181,733 $227,544
Changes in assets and liabilities:
Accounts receivable $83,463 ($5,429)
Inventories $19,901 ($15,163)
Other current assets ($27,083) $26,023
Security deposits $1,031 $10,558
Pre-opening costs $0 ($109,801)
Accounts payable and accrued expenses $194,045 ($175,526)
Other non-current liabilities ($3,000) $925
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Net cash used by operating activities ($341,008) ($712,349)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment ($86,795) ($155,342)
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Net cash used by investing activities ($86,795) ($155,342)
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term borrowings $500,000
Short-term borrowings $340,450 $100,000
Repayment of long-term borrowings ($500,000)
Repayment of short-term borrowings
Conversion of debt to equity $500,000
Proceeds from sale of stock options & warrants $0 $0
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Net cash provided by financing activities $340,450 $600,000
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NET INCREASE IN CASH AND CASH EQUIVALENTS ($87,353) ($267,691)
CASH, CASH EQUIVALENTS, AND MKTBLE SECURITIES, BEGINNING OF PERIOD $171,724 $446,497
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CASH, CASH EQUIVALENTS, AND MKTBLE SECURITIES, AT END OF PERIOD $84,371 $178,806
============ ============
</TABLE>
6
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AUSTIN'S INTERNATIONAL, INC.
Notes to Financial Statements
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(Unaudited)
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Note 1 - Financial Statements
- -----------------------------
In the opinion of the Company's management, the accompanying unaudited
consolidated financial statements contain all adjustments necessary to present
fairly the financial position as of September 30, 1997, and March 31, 1997, and
the results of operations and the cash flows for the period ending September 30,
1997, and September 30, 1996.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These statements should be read in conjunction
with the audited consolidated financial statements for the fiscal year ended
March 31, 1997, and notes thereto contained in the Company's 1997 Form 10-KSB
filed with the Securities and Exchange Commission on June 27, 1997. The results
of operations for the six months ended September 30, 1997, are not necessarily
indicative of operating results to be expected for the full fiscal year.
Note 2 - Initial Public Offering
- --------------------------------
In July, 1992, the Company completed its initial public offering of common
stock. The offering consisted of the sale of 950,000 shares of the Company's
common stock and provided net proceeds to the Company of $4,125,939. The
Company utilized approximately $305,000 of the proceeds for the repayment of
debt and used the remainder for expansion and working capital.
Note 3 - Restaurant Operations
- ------------------------------
The Company currently operates three restaurants, one in Coral Springs,
Florida, one in Orlando, Florida, and one in Merritt Island, Florida, about
five miles from the Kennedy Space Center. On July 9, 1997, the Company closed
it's Ft. Lauderdale restaurant, due to continuing and escalating losses.
Subsequently, as part of the operating subsidiary's Chapter 11 filing, as
disclosed in an 8-K filed July 25th, the Ft. Lauderdale restaurant's lease was
rejected. The accounting entries for the rejected lease will be reflected in
the Company's financials following court approval of a submitted plan, in the
next few months.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The Issuer has developed, and owns and operates a chain of full service
restaurants specializing in Texas-style American cuisine. It currently offers a
wide variety of appetizers, salads and award-winning babyback ribs, as well as a
wide variety of steaks.
ADDITIONAL CAPITAL
The Company, during the last quarter, borrowed $190,450 on promissory
notes.
NET SALES
Net sales for the three months ended September 30, 1997, were $614,239 as
compared to $1,829,934 for the three months ended September 30, 1996, or a 66.4%
decrease. Net sales for the six months ended September 30, 1997, were
$1,592,296 as compared to $3,747,547 for the six months ended September 30,
1996, or a 57.5% decrease. The decline in sales is primarily attributable to the
closing of the Ft. Lauderdale and Pembroke Pines units.
FOOD AND BEVERAGE COSTS
Food and beverage costs for the three months ended September 30, 1997, were
$241,820 or 39.4% of sales as compared to $692,636 or 37.9% of sales for the
same period ending September 30, 1996. Food and beverage costs for the six
months ended September 30, 1997, were $599,324 or 37.6% of sales as compared to
$1,392,662 or 37.2% of sales for the six months ended September 30, 1996.
8
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PAYROLL AND RELATED COSTS
Payroll and related costs for the three months ended September 30, 1997,
were $275,142 or 44.8% of sales as compared to $667,434 or 36.5% of sales for
the period ending September 30, 1996. Payroll and related costs for the six
months ended September 30, 1997, were $667,659 or 41.9% of sales as compared to
$1,335,333 or 35.6% of sales for the six months ended September 30, 1996.
OTHER RESTAURANT OPERATING EXPENSES
Other restaurant operating expenses for the three months ended September
30, 1997, were $303,041 or 49.3% of sales as compared to $579,251 or 31.7% of
sales for the period ending September 30, 1996. Other restaurant operating
expenses for the six months ended September 30, 1997, were $685,030 or 43.0% of
sales as compared to $1,122,604 or 30.0% of sales for the six months ended
September 30, 1996.
GENERAL AND ADMINISTRATIVE EXPENSES
General and Administrative expenses for the three months ended September
30, 1997, were $101,269 or 16.5% of sales, as compared to $140,305 or 7.7% of
sales, for the period ending September 30, 1996. General and Administrative
expenses for the six months ended September 30, 1997, were $199,172 or 12.5% of
sales, as compared to $295,173 or 7.9% of sales for the six months ended
September 30, 1996.
NET PROFIT/LOSS
The Company's net loss per share for the three months ended September 30,
1997 was 4.1 cents as compared to 3.9 cents per share for the three months ended
September 30, 1996. The net loss per share for the six months ended September
30, 1997 was 7.9 cents as compared to 7.2 cents per share for the six months
ended September 30, 1996.
9
<PAGE>
Part II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits.
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23.1 Consent of independent accountants for
form S-8. Incorporated by reference from Registrants
Form 10-KSB filed with the Commission on
June 27, 1997
*27(1) Financial Data Schedule
*Filed as an exhibit to this Report.
10
<PAGE>
b. Reports on Form 8-K.
-------------------
The company filed an 8-K dated July 18, 1997 with the Commission on
July 25, 1997. The report covered the wholly owned subsidiary Austin's
International, Inc. A Florida Corporation, filing for relief under Chapter 11,
of the U.S. Bankruptcy Code.
In accordance with the requirements of the Exchange Act, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized.
AUSTIN'S INTERNATIONAL, INC.
/s/ Larry E. Graybill
----------------------------
DATED: Larry E. Graybill, President
November 10, 1997
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE SECOND QUARTER ENDED SEPTEMBER
30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 84,371
<SECURITIES> 0
<RECEIVABLES> 27,560
<ALLOWANCES> 0
<INVENTORY> 100,884
<CURRENT-ASSETS> 323,461
<PP&E> 3,774,683
<DEPRECIATION> 1,496,877
<TOTAL-ASSETS> 2,654,016
<CURRENT-LIABILITIES> 1,076,342
<BONDS> 868,000
0
0
<COMMON> 100,035
<OTHER-SE> 490,430
<TOTAL-LIABILITY-AND-EQUITY> 2,654,016
<SALES> 611,680
<TOTAL-REVENUES> 614,239
<CGS> 241,820
<TOTAL-COSTS> 820,003
<OTHER-EXPENSES> 176,996
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,283
<INCOME-PRETAX> (409,043)
<INCOME-TAX> 0
<INCOME-CONTINUING> (382,055)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (409,043)
<EPS-PRIMARY> 0.04
<EPS-DILUTED> (0.04)<F1>
<FN>
<F1>SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED MARCH 31,
1997 - NOTE 3. - LOSS PER COMMON SHARE.
</FN>
</TABLE>
