<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 December 31, 1997
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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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
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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 February 9, 1998
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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
December 31, 1997, and March 31, 1997 Exhibit "A"
Consolidated Statements of Changes
in Shareholder's Equity - For the
Period from March 31, 1997
through December 31, 1997 Exhibit "B"
Consolidated Statements of Operations -
For the three month and nine month periods ended
December 31, 1997, and December 31, 1996 Exhibit "C"
Consolidated Statements of Cash Flows -
For the three month and nine month periods ended
December 31, 1997, and December 31, 1996 Exhibit "D"
Notes to Consolidated Financial Statements
2
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EXHIBIT A
AUSTIN'S INTERNATIONAL, INC.
Consolidated Balance Sheet as of
December 31, 1997 and March 31, 1997
YEAR END
12/31/97 3/31/97
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(UNAUDITED) (AUDITED)
ASSETS
CURRENT ASSETS:
CASH AND EQUIVALENTS $38,942 $171,724
ACCOUNTS RECEIVABLE $38,669 $111,023
INVENTORIES $92,169 $120,785
OTHER CURRENT ASSETS $83,914 $83,563
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TOTAL CURRENT ASSETS $253,694 $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
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$3,774,683 $3,687,888
LESS ACCUM DEPRECIATION ($1,565,937) ($1,332,756)
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$2,208,746 $2,355,132
SECURITY DEPOSITS & OTHER ASSETS $52,190 $71,394
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TOTAL ASSETS $2,514,630 $2,913,621
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $508,440 $233,608
NOTES PAYABLE $1,519,252 $1,068,000
ACCRUED EXPENSES $82,860 $108,239
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TOTAL CURRENT LIABILITIES $2,110,552 $1,409,847
NOTES PAYABLE, LESS CURRENT PORTION
OTHER NON-CURRENT LIABILITIES $117,709 $122,209
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TOTAL LIABILITIES $2,228,261 $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 ($8,285,219) ($7,190,023)
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TOTAL SHAREHOLDERS' EQUITY $286,369 $1,381,565
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TOTAL LIABILITIES AND EQUITY $2,514,630 $2,913,621
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 December 31, 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 ($1,095,195) ($1,095,195)
------------ ------------ ------------ ------------ ------------
BALANCE DEC. 31, 1997 (UNAUDITED) 10,003,550 $100,035 $8,471,553 ($8,285,218) $286,370
============ ============ ============ ============ ============
</TABLE>
4
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EXHIBIT C
AUSTIN'S INTERNATIONAL, INC
Consolidated Statement of Operations for the Three
Months and and Nine Months ended December 31, 1997 and
December 31, 1996
<TABLE>
<CAPTION>
3 MO ENDED 3 MO ENDED 9 MO ENDED 9 MO ENDED
12/31/97 12/31/96 12/31/97 12/31/96
------------ ------------ ------------ -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
NET SALES $ 620,390 $ 1,560,723 $ 2,205,050 $ 5,286,051
OTHER REVENUES $ 1,974 $ 2,926 $ 5,462 $ 20,862
INTEREST $ 0 $ 2,923 $ 4,150 $ 7,206
------------ ------------ ------------ -----------
TOTAL REVENUES $ 622,364 $ 1,566,572 $ 2,214,662 $ 5,314,119
COSTS AND EXPENSES:
FOOD AND BEVERAGE COSTS $ 249,851 $ 586,763 $ 849,177 $ 1,979,423
PAYROLL AND RELATED COSTS $ 257,460 $ 559,855 $ 925,118 $ 1,895,188
OTHER RESTAURANT OPERATING EXP $ 273,038 $ 478,735 $ 958,070 $ 1,601,340
GENERAL AND ADMIN EXPENSES $ 45,978 $ 106,012 $ 245,150 $ 401,186
DEPRECIATION AND AMORTIZATION $ 69,060 $ 110,511 $ 250,793 $ 338,055
INTEREST EXPENSE $ 31,075 $ 17,361 $ 81,551 $ 63,072
------------ ------------ ------------ -----------
TOTAL EXPENSES $ 926,462 $ 1,859,237 $ 3,309,859 $ 6,278,264
------------ ------------ ------------ -----------
NET LOSS ($ 304,098) ($ 292,665) ($ 1,095,197) ($ 964,145)
NET LOSS PER SHARE ($ 0.030) ($ 0.029) ($ 0.109) ($ 0.101)
WEIGHTED AVE SHARES OUTSTANDING 10,003,550 10,003,550 10,003,550 9,533,550
</TABLE>
5
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EXHIBIT D
AUSTIN'S INTERNATIONAL, INC.
Consolidated Statement of Cash Flow for the nine
months ended December 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
9 MO ENDED 9 MO ENDED
12/31/97 12/31/96
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(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) ($1,095,197) ($964,145)
Adjustments to reconcile net income to net cash from operations:
Depreciation and amortization $250,793 $338,055
Changes in assets and liabilities:
Accounts receivable $72,354 ($62,565)
Inventories $28,616 $1,469
Other current assets ($351) $2,765
Security deposits $1,592 $12,738
Pre-opening costs $0 ($109,801)
Accounts payable and accrued expenses $249,454 ($223,415)
Other non-current liabilities ($4,500) $1,387
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Net cash used by operating activities ($497,239) ($1,003,512)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment ($86,795) ($176,728)
Sale of Asset $297,000
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Net cash used by investing activities ($86,795) $120,272
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term borrowings $500,000
Short-term borrowings $451,252 $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 $451,252 $600,000
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NET INCREASE IN CASH AND CASH EQUIVALENTS ($132,782) ($283,240)
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 $38,942 $163,257
=========== ===========
</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 December 31, 1997, and March 31, 1997, and
the results of operations and the cash flows for the three month and nine month
periods ending December 31, 1997, and December 31, 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 nine months ended December 31, 1997, are not necessarily
indicative of operating results to be expected for the full fiscal year.
Note 2 - Initial Public Offering
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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 $110,802 on promissory
notes.
NET SALES
Net sales for the three months ended December 31, 1997, were $622,364 as
compared to $1,566,572 for the three months ended December 31, 1996, or a
60.3% decrease. Net sales for the nine months ended December 31, 1997, were
$2,214,662 as compared to $5,314,119 for the nine months ended December 31,
1996, or a 58.3% decrease. The decline in sales is primarily attributable to the
closing of the Ft. Lauderdale and Pembroke Pines units, as well as closing for
lunch in each location.
FOOD AND BEVERAGE COSTS
Food and beverage costs for the three months ended December 31, 1997, were
$249,851 or 40.2% of sales as compared to $586,763 or 37.5% of sales for the
same period ending December 31, 1996. Food and beverage costs for the nine
months ended December 31, 1997, were $849,177 or 38.3% of sales as compared to
$1,979,423 or 37.3% of sales for the nine months ended December 31, 1996.
8
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PAYROLL AND RELATED COSTS
Payroll and related costs for the three months ended December 31, 1997,
were $257,460 or 41.4% of sales as compared to $559,855 or 35.7% of sales for
the period ending December 31, 1996. Payroll and related costs for the nine
months ended December 31, 1997, were $925,118 or 41.8% of sales as compared to
$1,895,188 or 35.7% of sales for the nine months ended December 31, 1996.
OTHER RESTAURANT OPERATING EXPENSES
Other restaurant operating expenses for the three months ended December
31, 1997, were $272,038 or 43.9% of sales as compared to $478,735 or 30.6% of
sales for the period ending December 31, 1996. Other restaurant operating
expenses for the nine months ended December 31, 1997, were $958,070 or 43.3% of
sales as compared to $1,601,340 or 30.1% of sales for the nine months ended
December 31, 1996.
GENERAL AND ADMINISTRATIVE EXPENSES
General and Administrative expenses for the three months ended December 31,
1997, were $45,978 or 7.4% of sales, as compared to $106,012 or 6.8% of sales,
for the period ending December 31, 1996. General and Administrative expenses for
the nine months ended December 31, 1997, were $245,150 or 11.1% of sales, as
compared to $401,186 or 7.6% of sales for the nine months ended December 31,
1996.
NET PROFIT/LOSS
The Company's net loss per share for the three months ended December 31,
1997 was 3.0 cents as compared to 2.9 cents per share for the three months ended
December 31, 1996. The net loss per share for the nine months ended December
31,1997 was 10.9 cents as compared to 10.1 cents per share for the nine months
ended December 31, 1996.
9
<PAGE>
Part II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS.
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*27(1) Financial Data Schedule
*Filed as an exhibit to this Report.
10
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B. REPORTS ON FORM 8-K.
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None filed this quarter.
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
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DATED: Larry E. Graybill, President
Feburary 11, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE THIRD QUARTER ENDED DECEMBER
31, 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> SEP-30-1997
<PERIOD-END> DEC-31-1997
<CASH> 38,942
<SECURITIES> 0
<RECEIVABLES> 38,669
<ALLOWANCES> 0
<INVENTORY> 92,169
<CURRENT-ASSETS> 253,694
<PP&E> 3,774,683
<DEPRECIATION> 1,565,937
<TOTAL-ASSETS> 2,514,630
<CURRENT-LIABILITIES> 1,242,552
<BONDS> 868,000
0
0
<COMMON> 100,035
<OTHER-SE> 186,334
<TOTAL-LIABILITY-AND-EQUITY> 2,514,630
<SALES> 620,390
<TOTAL-REVENUES> 622,364
<CGS> 249,851
<TOTAL-COSTS> 780,349
<OTHER-EXPENSES> 115,038
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,075
<INCOME-PRETAX> (304,098)
<INCOME-TAX> 0
<INCOME-CONTINUING> (304,098)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (304,098)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)<F1>
<FN>
<F1>SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED
MARCH 31, 1997 - NOTE 3. - LOSS PER COMMON SHARE.
</FN>
</TABLE>
