<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended April 2, 2000
Commission file number 0-19924
RARE Hospitality International, Inc.
(Exact name of registrant as specified in its charter)
Georgia 58-1498312
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
8215 Roswell Rd; Bldg. 600; Atlanta, GA 30350
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 399-9595
--------------
(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.
[XX] Yes [ ] 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 as of May 7, 2000
------ -----------------------------
Common Stock, no par value 11,953,699 shares
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RARE Hospitality International, Inc.
Index
<TABLE>
<S> <C>
Part I - Financial Information
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets-
April 2, 2000 and December 26, 1999 1
Consolidated Statements of Earnings-
For the quarters ended
April 2, 2000 and March 28, 1999 2
Consolidated Statement of Shareholders' Equity
For the quarter ended April 2, 2000 3
Condensed Consolidated Statements of Cash Flows-
For the quarters ended
April 2, 2000 and March 28, 1999 4
Notes to the Consolidated Financial Statements 5-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-10
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 11
Part II - Other Information
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Securities
Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signature 12
</TABLE>
<PAGE> 3
Part I. Financial Information
Item 1. Financial Statements
RARE Hospitality International, Inc.
Consolidated Balance Sheets
(In thousands, except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
April 2, December 26,
Assets 2000 1999
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,136 $ 8,864
Accounts receivable 4,089 3,047
Inventories 10,101 10,213
Prepaid expenses 608 815
Refundable income taxes 210 2,568
Deferred income taxes 7,988 8,179
------------ ------------
Total current assets 27,132 33,686
Property & equipment, less
accumulated depreciation 192,132 187,281
Goodwill, less accumulated
amortization 13,013 13,185
Other 2,706 2,966
------------ ------------
Total assets $ 234,983 $ 237,118
============ ============
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 13,526 $ 17,870
Accrued expenses 27,520 26,847
------------ ------------
Total current liabilities 41,046 44,717
Debt, net of current installments 43,000 40,000
Deferred income taxes 818 1,103
Obligations under capital leases 9,732 9,732
------------ ------------
Total liabilities 94,596 95,552
Minority interest 3,916 3,982
Shareholders' equity:
Preferred stock -- --
Common stock 110,790 110,258
Unearned compensation-restricted
stock (384) (376)
Retained earnings 35,816 29,589
Treasury stock at cost; 580,500
shares in 2000 and 144,500 shares
in 1999 (9,751) (1,887)
------------ ------------
Total shareholders' equity 136,471 137,584
------------ ------------
Total liabilities and
shareholders' equity $ 234,983 $ 237,118
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
1
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RARE Hospitality International, Inc.
Consolidated Statements of Earnings
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
14 Weeks Ended 13 Weeks Ended
April 2, 2000 March 28, 1999
-------------- --------------
<S> <C> <C>
Revenues:
Restaurant sales:
LongHorn Steakhouse $ 85,208 $ 63,369
The Capital Grille 16,913 14,374
Bugaboo Creek 16,645 13,665
Other restaurants 1,752 1,546
------------ ------------
Total restaurant sales 120,518 92,954
Franchise revenues 94 25
------------ ------------
Total revenues 120,612 92,979
------------ ------------
Costs and expenses:
Cost of restaurant sales 43,071 33,377
Operating expenses - restaurants 52,071 41,123
Depreciation expense - restaurants 4,264 3,637
Pre-opening expense - restaurants 1,133 789
Provision for litigation settlement (See Note 2) 1,000 --
General and administrative expenses 8,102 6,287
------------ ------------
Total costs and expenses 109,641 85,213
------------ ------------
Operating income 10,971 7,766
Interest expense, net 1,021 1,027
Minority interest 653 491
------------ ------------
Earnings before income taxes and cumulative
effect of change in accounting principle 9,297 6,248
Income tax expense (See Note 3) 3,070 2,075
------------ ------------
Earnings before cumulative effect of change in
accounting principle 6,227 4,173
------------ ------------
Cumulative effect of change in accounting principle
net of tax benefit
-- 1,587
------------ ------------
Net earnings $ 6,227 $ 2,586
============ ============
Basic earnings per common share:
Basic earnings before cumulative effect of
change in accounting principle $ 0.52 $ 0.35
Cumulative effect of change in accounting
principle -- (0.13)
------------ ------------
Basic earnings per common share $ 0.52 $ 0.22
============ ============
Diluted earnings per common share:
Diluted earnings before cumulative effect of
change in accounting principle $ 0.50 $ 0.34
Cumulative effect of change in accounting
principle -- (0.13)
------------ ------------
Diluted earnings per common share $ 0.50 $ 0.21
============ ============
Weighted average common shares outstanding (basic) 12,024 11,946
============ ============
Weighted average common shares outstanding (diluted) 12,503 12,198
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
2
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RARE Hospitality International, Inc.
Consolidated Statement of Shareholders' Equity
For the quarter ended April 2,2000
(In thousands, unaudited)
<TABLE>
<CAPTION>
Unearned
Common Stock Compensation- Total
----------------------- Restricted Retained Treasury Shareholders'
Shares Amount Stock Earnings Stock Equity
-------- --------- ------------- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 26, 1999 12,384 $ 110,258 $ (376) $ 29,589 $ (1,887) $ 137,584
Net earnings -- -- -- 6,227 -- 6,227
Issuance of shares pursuant
to exercise of stock options 40 488 -- -- -- 488
Purchase of common stock -- -- -- -- (7,864) (7,864)
Issuance of shares pursuant
to restricted stock awards 2 44 (44) -- -- --
Amortization of restricted stock -- -- 36 -- -- 36
-------- --------- --------- --------- --------- ---------
Balance, April 2, 2000 12,426 $ 110,790 $ (384) $ 35,816 $ (9,751) $ 136,471
======== ========= ========= ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
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RARE Hospitality International, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands, unaudited)
<TABLE>
<CAPTION>
14 Weeks 13 Weeks
Ended Ended
April 2, March 28,
2000 1999
--------- ---------
<S> <C> <C>
Cash Flows from operating activities:
Net earnings $ 6,227 $ 2,586
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 4,771 4,004
Changes in working capital accounts (5,851) (5,495)
Cumulative effect of change in accounting
principle -- 1,587
Minority interest 653 491
Deferred tax(benefit) expense (94) 279
--------- ---------
Net cash provided by operating activities 5,706 3,452
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment (9,397) (5,669)
Asset acquisitions -- (41)
--------- ---------
Net cash used by investing activities (9,397) (5,710)
--------- ---------
Cash flows from financing activities:
Proceeds from (repayments of) credit facilities 3,000 (6,000)
Proceeds from minority partners' contributions 25 750
Distributions to minority partners (744) (739)
Increase in bank overdraft included in accounts
payable 4,058 4,100
Purchase of common stock for treasury (7,864) (1,139)
Principal payments on capital leases -- (26)
Proceeds from exercise of stock options 488 84
--------- ---------
Net cash used in financing activities (1,037) (2,970)
--------- ---------
Net decrease in cash and cash equivalents (4,728) (5,228)
Cash and cash equivalents, beginning of period 8,864 12,060
--------- ---------
Cash and cash equivalents, end of period $ 4,136 $ 6,832
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
4
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RARE Hospitality International, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The consolidated financial statements of RARE Hospitality International, Inc.
(the "Company") as of April 2, 2000 and December 26, 1999 and for the quarters
ended April 2, 2000 and March 28, 1999 have been prepared by the Company,
pursuant to the rules and regulations of the Securities and Exchange
Commission. The information furnished herein reflects all adjustments
(consisting of normal recurring accruals and adjustments) which are, in the
opinion of management, necessary to fairly present the operating results for
the respective periods. Certain information and footnote disclosures normally
presented in annual financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such rules and
regulations. These financial statements should be read in conjunction with the
consolidated financial statements and notes thereto contained in the Company's
Annual Report on Form 10-K for the year ended December 26, 1999.
The Company's fiscal year is a 52- or 53-week year ending on the last Sunday in
each calendar year. Each of the four fiscal quarters is typically made up of 13
weeks; however, since fiscal 2000 will be a 53-week period, the first quarter
2000 contains 14 operating weeks.
2. Litigation Settlement
In March 2000, an ongoing legal dispute with a former joint venture partner was
resolved by an arbitrator, resulting in a judgement against the Company in the
amount of $2 million. The Company's consolidated statement of earnings for the
first quarter 2000 reflects a nonrecurring charge of $1 million ($670,000 net
of income taxes) for amounts not previously reserved for this dispute.
3. Income Taxes
Income tax expense for the quarter ended April 2, 2000 has been provided for
based on the estimated effective tax rate then currently expected to be
applicable for the full 2000 fiscal year. The effective income tax rate of 33%
for the quarter ended April 2, 2000 differs from applying the statutory federal
income tax rate of 35% to pre-tax earnings primarily due to employee FICA tip
tax credits (a reduction in income tax expense) partially offset by state
income taxes.
4. Long-Term Debt
At April 2, 2000, $43 million was outstanding under the Company's $100 million
revolving credit agreement at a weighted average interest rate of 7.57%. The
interest rate on $40 million of the amount outstanding under the revolving
credit facility is effectively fixed at 7.6% under an interest rate swap.
5. Earnings Per Share
Basic earnings per common share equals net earnings divided by the weighted
average number of common shares outstanding and does not include the
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dilutive effect of stock options or restricted stock. Diluted earnings per
common share equals net earnings divided by the weighted average number of
common shares outstanding, after giving effect to dilutive stock options and
restricted stock. A reconciliation between basic and diluted weighted average
shares outstanding and the related earnings per share calculation is presented
below (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Fiscal Quarter
----------------------------
14 Weeks 13 Weeks
Ended Ended
April 2, March 28,
2000 1999
---------- ----------
<S> <C> <C>
Basic weighted average
shares outstanding 12,024 11,946
Dilutive effect of stock options 450 238
Dilutive effect of restricted stock 29 14
---------- ----------
Diluted weighted average shares outstanding 12,503 12,198
========== ==========
Earnings before cumulative effect of change in
accounting principle $ 6,227 $ 4,173
Cumulative effect of change in accounting
principle (net of tax benefit) -- 1,587
---------- ----------
Net earnings $ 6,227 $ 2,586
========== ==========
Basic earnings per common share:
Basic earnings before cumulative effect of
change in accounting principle $ 0.52 $ 0.35
Cumulative effect of change in accounting
principle -- (0.13)
---------- ----------
Basic earnings per common share $ 0.52 $ 0.22
========== ==========
Diluted earnings per common share:
Diluted earnings before cumulative effect
of change in accounting principle $ 0.50 $ 0.34
Cumulative effect of change in accounting
principle -- (0.13)
---------- ----------
Diluted earnings per common share $ 0.50 $ 0.21
========== ==========
</TABLE>
6. Comprehensive Income
For the quarters ended April 2, 2000 and March 28, 1999, there was no
difference between the Company's net earnings and comprehensive income.
7. Shareholder Equity
In February 2000, the Company's Board of Directors authorized the Company to
purchase up to an additional $10 million of its common stock, through open
market transactions, block purchases, or in privately negotiated transactions.
During the first quarter 2000, the Company purchased an aggregate 436,000
shares of its common stock for a total purchase price of $7,864,000(average
price of $18.04 per share).
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8. Recent Accounting Pronouncement
In June 1999, the FASB issued Statement of Financial Accounting Standards No.
137, "Accounting for Derivative Instruments and Hedging Activities - Deferral
of the Effective Date of FASB Statement No. 133" ("SFAS No. 137"). This
statement defers the effective date of SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133") to all fiscal years
beginning after June 15, 2000. SFAS No. 133 requires all derivatives to be
recorded on the balance sheet at fair value and establishes accounting
treatment for certain hedge transactions. The Company is analyzing the
implementation requirements and currently does not anticipate there will be a
material impact on the results of operations or financial position after the
adoption of SFAS No. 133.
9. Subsequent Event
In April 2000, the Company's Board of Directors increased the dollar amount of
the Company's common stock authorized to be repurchased from $10 million to $25
million.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Quarter ended April 2, 2000 compared to quarter ended March 28, 1999.
REVENUES
The Company currently derives all of its revenues from restaurant sales and
franchise revenues. Total revenues increased 29.7% to $120.6 million for the
first quarter of 2000 compared to $93 million for the first quarter of 1999.
The Company's fiscal year is a 52- or 53-week year ending on the last Sunday in
each calendar year. Each of the four quarters is typically made up of 13 weeks;
however, since fiscal 2000 will be a 53-week period, the first quarter 2000
contains 14 weeks. This additional week had a favorable effect on the Company's
revenue comparisons and operating results for the first quarter 2000.
Same store sales comparisons for each of the Company's restaurant concepts for
the quarter ended April 2, 2000, consist of sales at restaurants opened prior
to June 28, 1998.
LongHorn Steakhouse:
Sales in the LongHorn Steakhouse restaurants increased 34.5% to $85.2 million
for the first quarter of 2000, compared to $63.4 million for the first quarter
of the prior year. The increase reflects a 23.5% increase in restaurant weeks
in the first quarter, as compared to the same period of the prior year,
resulting from an increase in the restaurant base from 107 LongHorn Steakhouse
restaurants at the end of the first quarter of 1999 to 124 at the end of the
first quarter of 2000 and a 9% increase in restaurant weeks resulting from the
additional week in the first quarter 2000 14-week operating period. Average
weekly sales for all LongHorn Steakhouse
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restaurants in the first quarter of 2000 was $50,181, a 8.9% increase over the
comparable period in 1999. Same store sales for the comparable LongHorn
Steakhouse restaurants increased 6.8% in the first quarter of 2000 as compared
to the same period in 1999, primarily due to an increase in customer counts.
The Capital Grille:
Sales in The Capital Grille restaurants increased 17.7% to $16.9 million for
the first quarter of 2000, compared to $14.4 million for the same period in
1999. The increase reflects a 7.7% increase in restaurant weeks in the first
quarter of 2000, as compared to the same period in 1999, resulting from the
additional week in the first quarter 2000 14-week operating period. Average
weekly sales for all The Capital Grille restaurants in the first quarter of
2000 were $109,822, a 9.3% increase from the comparable period in 1999. Same
store sales for the comparable The Capital Grille restaurants increased 11.8%
in the first quarter of 2000, as compared to the same period in 1999, primarily
due to an increase in customer counts.
Bugaboo Creek:
Sales in the Bugaboo Creek restaurants increased 21.8% to $16.6 million for the
first quarter of 2000, compared to $13.7 million for the same period in 1999.
The increase reflects a 14% increase in restaurant weeks in the first quarter,
as compared to the same period of the prior year, resulting from an increase in
the restaurant base from 17 Bugaboo Creek restaurants at the end of the first
quarter of 1999 to 18 at the end of the first quarter of 2000 and an 8.1%
increase in restaurant weeks resulting from the additional week in the first
quarter 2000 14-week operating period. Average weekly sales for all Bugaboo
Creek restaurants in the first quarter of 2000 were $66,053, a 6.8% increase
from the comparable period for 1999. Same store sales for the comparable
Bugaboo Creek restaurants in the first quarter of 2000 increased 9.5% as
compared to the same period in 1999, primarily due to a increase in customer
counts.
Franchise Revenue:
Franchise revenues increased to $94,000 for the first quarter of 2000 compared
to $25,000 for the same period in 1999. This increase was principally due to
the increase in the number of franchised LongHorn Steakhouse restaurants to
three from one for the periods in 2000 and in 1999, respectively.
COSTS AND EXPENSES
Cost of restaurant sales as a percentage of restaurant sales decreased to 35.7%
for the first quarter of 2000 from 35.9% for the same period of 1999. The
decrease was primarily due to generally more favorable pricing on products
utilized by the Company.
Restaurant operating expenses as a percentage of restaurant sales decreased to
43.2% for the first quarter of 2000 as compared to 44.2% for the same period in
1999. This was due to a reduction in advertising expense as a percentage of
restaurant sales and greater leverage (provided by higher sales levels) of
fixed and semi-fixed expenses. Restaurant depreciation increased to $4.3
million from $3.6 million in the corresponding period of
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the prior year primarily due to the depreciation associated with construction
of new restaurants.
In March 2000, an ongoing legal dispute with a former joint venture partner was
resolved by an arbitrator, resulting in a judgement against the Company in the
amount of $2 million. The Company's consolidated Statement of Earnings for the
first quarter 2000 reflects a nonrecurring charge of $1 million ($670,000 net
of income taxes) for amounts not previously reserved for this dispute.
General and administrative expenses as a percentage of total revenues decreased
to 6.7% for the first quarter of 2000 as compared to 6.8% for the corresponding
period of the prior year. This decrease was principally due to greater leverage
of fixed and semi-fixed general and administrative expenses partially offset by
an increase in multi-unit restaurant supervision costs as the Company begins to
enter new markets for LongHorn Steakhouse restaurants.
As a result of the relationships between revenues and expenses discussed above,
the Company's operating income increased to $11 million for the first quarter
of 2000 from $7.8 million for the corresponding period of the prior year.
Interest expense, net remained flat at $1.0 million in the first quarter of
2000 as compared to the same period of the prior year due to comparable average
borrowings and average effective interest rates between the two periods.
Minority interest expense increased to $653 thousand for the first quarter of
2000 from $491 thousand for the same period of the prior year primarily due to
improved operating results at the joint venture owned LongHorn Steakhouse
restaurants and the full year effect of three joint venture restaurants opened
in 1999.
Income tax expense for the first quarter of 2000 was 33% of earnings before
income taxes. This compares to 33.2% of earnings before income taxes and
cumulative effect of change in accounting principle for the first quarter of
1999. The Company's effective income tax rate differs from applying the
statutory federal income tax rate of 35% to pre-tax income, primarily due to
employee FICA tip tax credits partially offset by state income taxes.
Net earnings increased to $6.2 million for the first quarter of 2000 from net
earnings of $2.6 million for the first quarter of 1999, reflecting the net
effect of the items discussed above.
LIQUIDITY AND CAPITAL RESOURCES:
The Company requires capital primarily for the development of new restaurants,
selected acquisitions and the remodeling of existing restaurants. During the
first quarter of 2000 the Company's principal source of working capital was
cash provided by operating activities ($5.7 million) and proceeds from
borrowing under the Company's revolving credit facility ($3 million). The
principal uses of working capital were capital expenditures ($9.4 million) for
new and improved facilities and the purchase of common stock for treasury ($7.9
million). As of April 2, 2000 the Company had $43 million outstanding and $57
million available under the Company's $100 million revolving credit facility.
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The Company intends to open 17 to 19 Company-owned and joint venture Longhorn
Steakhouse restaurants, one or two The Capital Grille restaurants and one
Bugaboo Creek restaurant in fiscal year 2000. The Company estimates that its
capital expenditures for fiscal year 2000 will be approximately $45-50 million.
During the first quarter of 2000, the Company opened six LongHorn Steakhouse
restaurants, and as of May 7, 2000, has opened one LongHorn Steakhouse
restaurant in the second quarter. Management believes that available cash, cash
provided by operations, and available borrowings under the Company's $100
million revolving credit facility will provide sufficient funds to finance the
Company's expansion plans through the year 2001.
Since substantially all sales in the Company's restaurants are for cash, and
accounts payable are generally due in seven to 30 days, the Company operates
with little or negative working capital.
New Accounting Pronouncement
In June 1999, the FASB issued Statement of Financial Accounting Standards No.
137, "Accounting for Derivative Instruments and Hedging Activities - Deferral
of the Effective Date of FASB Statement No. 133" ("SFAS No. 137"). This
statement defers the effective date of SFAS No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133") to all fiscal years
beginning after June 15, 2000. SFAS No. 133 requires all derivatives to be
recorded on the balance sheet at fair value and establishes accounting
treatment for certain hedge transactions. The Company is analyzing the
implementation requirements and currently does not anticipate there will be a
material impact on the results of operations or financial position after the
adoption of SFAS No. 133.
Impact of the Year 2000 Issue
The Company experienced no significant difficulties with its IT systems and
non-IT systems as a result of the date change to the Year 2000 or the leap year
date of February 29, 2000 and, as of May 7, 2000, had experienced no
difficulties from material providers as a result of the Year 2000 date change
or the leap year date of February 29, 2000.
The Company will continue to monitor its critical computer applications and
those of its significant suppliers and customers throughout the year 2000 to
ensure that any latent Year 2000 matters that may arise, and which could
adversely affect the Company's operations, are addressed promptly.
Forward-Looking Statements
Statements contained in this Report concerning future results, performance or
expectations, including those regarding the opening of additional restaurants,
planned capital expenditures, the adequacy of the Company's capital resources,
disclosures related to the effect of the year 2000 on the Company and its
systems and other statements regarding trends relating to various revenue and
expense items, are forward looking statements. These statements are subject to
a number of risks and uncertainties, some of which are beyond the Company's
control that could cause the Company's actual results to differ materially from
those projected in such forward-looking statements.
Actual results, performance or developments could differ materially from those
expressed or implied by those forward-looking statements as a result of known
or unknown risks, uncertainties and other factors, including those
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described from time to time in the Company's filings with the Securities and
Exchange Commission, press releases and other communications. The Company
undertakes no obligation to update or revise forward-looking statements to
reflect the occurrence of unanticipated events or changes to future operating
results over time.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
As of May 7, 2000, $43 million was outstanding under the Company's $100 million
revolving credit facility. Amounts outstanding under such credit facility bear
interest at LIBOR plus a margin of 1.25% to 2.0% (depending on the Company's
leverage ratio), or the administrative agent's prime rate of interest plus a
margin of 0% to 0.75% (depending on the Company's leverage ratio) at the
Company's option. Accordingly, the Company is exposed to the impact of interest
rate movements. To achieve the Company's objective of managing its exposure to
interest rate changes, the Company from time to time uses interest rate swaps.
The Company has an interest rate swap agreement with a commercial bank, which
effectively fixes the interest rate at 7.6% on $40 million of the Company's
borrowings through August 2000, decreasing to $35 million through May 2001 and
decreasing to $25 million through August 2004. The Company is exposed to credit
losses on this interest rate swap in the event of counterparty non-performance,
but does not anticipate any such losses.
While changes in LIBOR and the administrative agent's prime rate of interest
could affect the cost of borrowings under the credit facility in excess of
amounts covered by the interest rate swap agreement (of which only $3 million
was outstanding in excess of amounts covered by the interest rate swap
agreement at April 2, 2000) in the future, the Company does not consider its
current exposure to changes in such rates to be material, and the Company
believes that the effect, if any, of reasonably possible near-term changes in
interest rates on the Company's financial condition, results of operations or
cash flows would not be material.
Investment Portfolio
The Company invests portions of its excess cash, if any, in highly liquid
investments. At April 2, 2000, the Company had approximately $1.7 million
invested in high-grade overnight repurchase agreements.
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Part II - Other Information
Item 1. Legal Proceedings
In March 2000, an ongoing legal dispute with a former joint venture partner was
resolved by an arbitrator, resulting in a judgement against the Company in the
amount of $2 million. The Company's consolidated statement of earnings for the
first quarter 2000, reflect a nonrecurring charge of $1 million ($670,000 net
of income taxes) for amounts not previously reserved for this dispute.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Securities Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Filed.
10(a) -- Second Amendment to Credit Agreement
10(b) -- Third Amendment to Credit Agreement
27 -- Financial Data Schedules (for SEC use only)
(b) Reports filed on Form 8-K.
None.
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.
Date: May 15, 2000 /s/ W. Douglas Benn
------------------- -----------------------------------
W. Douglas Benn
Executive Vice President and
Chief Financial Officer
(Principal Financial
Officer and Principal
Accounting Officer)
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EXHIBIT 10(a)
SECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT
THIS SECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this "Second
Amendment") is made and entered into as of this 4th day of November, 1999 by and
among RARE HOSPITALITY INTERNATIONAL, INC., a corporation organized under the
laws of Georgia (the "Borrower"), , the Lenders who are or may become a party to
the Credit Agreement referred to below, FIRST UNION NATIONAL, as Administrative
Agent for the Lenders (the "Administrative Agent) and BANKBOSTON, N.A. and FLEET
NATIONAL BANK, as Co-Agents (collectively, the "Co-Agents").
Statement of Purpose
The Lenders agreed to extend certain extensions of credit to the
Borrower pursuant to the Amended and Restated Credit Agreement dated as of
August 26, 1998 by and among the Borrower, the Lenders, the Administrative Agent
and the Co-Agents (as amended by the First Amendment to Credit Agreement dated
as of December 31, 1999 and as further amended or supplemented from time to
time, the "Credit Agreement").
The parties now desire to amend the Credit Agreement in certain
respects and waive certain provisions of the Credit Agreement, all on the terms
and conditions set forth below.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Effect of Amendments and Waivers. Except as expressly amended
hereby, the Credit Agreement and Loan Documents shall be and remain in full
force and effect. The waivers granted herein are specific and limited and shall
not constitute an amendment of the Credit Agreement or the Loan Documents or a
modification, acceptance or waiver of any other provision of or default under
the Credit Agreement, the Loan Documents or any other document or instrument
entered into in connection therewith or a future modification, acceptance or
waiver of the provisions set forth therein (except to the extent necessary to
give effect to the specific waivers and agreements set forth herein).
2. Capitalized Terms. All capitalized undefined terms used in
this Second Amendment shall have the meanings assigned thereto in the Credit
Agreement.
3. Modification of Credit Agreement. The Credit Agreement is
hereby amended as follows:
(a) The defined terms "Fixed Charges" and "Revolving Credit
Termination Date" set forth in Section 1.1 of the Credit Agreement are each
hereby deleted in their entirety and the following definition shall be
substituted in lieu thereof:
"'Fixed Charges' means, with respect to the Borrower and its
Subsidiaries as of the last day of any fiscal quarter, the sum of the
following: (a) Interest Expense calculated for the period of four (4)
fiscal quarters ending on such date, plus (b) Rental Expense calculated
for the period of four (4) fiscal quarters ending on such date, plus
(c) the difference (if positive) between (i) the average daily
aggregate Revolving Credit Loans outstanding during the calendar month
preceding such date minus (ii) the Aggregate Commitment, as reduced by
any mandatory reductions pursuant to Section 2.6(c), on the last day of
the fiscal quarter immediately following such date, all determined on a
Consolidated basis in accordance with GAAP."
"'Revolving Credit Termination Date' means the
earliest of the dates referred to in Section 2.7."
<PAGE> 2
(b) The defined terms "Term-Out Amount", "Term-Out Maturity Date",
and "Term-Out Period" set forth in Section 1.1 of the Credit Agreement are each
hereby deleted in their entirety.
(c) The following defined terms shall be inserted into Section 1.1
in the correct alphabetical order:
"'Conversion Date' shall have the meaning assigned thereto in
Section 2.6(c)."
"'Second Amendment' means the Second Amendment and Waiver to
the Credit Agreement dated as of November __, 1999 by and among the
Borrower, the Lenders and the Administrative Agent and the Co-Agents."
(d) Section 2.4(a) of the Credit Agreement is hereby deleted in
its entirety and the following Section 2.4(a) shall be substituted in lieu
thereof:
"(a) Repayment on Termination Date. The Borrower shall
repay the outstanding principal amount of (i) all Revolving Credit
Loans in full on the Revolving Credit Termination Date and (ii) all
Swingline Loans in accordance with Section 2.2(b), together, in each
case, with all accrued but unpaid interest thereon."
(e) Section 2.6 of the Credit Agreement is hereby deleted in its
entirety and the following Section 2.6 shall be substituted in lieu thereof:
"SECTION 2.6 Permanent Reduction of the Aggregate Commitment.
(a) Voluntary Reduction. The Borrower shall have the
right at any time and from time to time, upon at least five (5)
Business Days prior written notice to the Administrative Agent, to
permanently reduce, without premium or penalty, (i) the entire
Aggregate Commitment at any time or (ii) portions of the Aggregate
Commitment, from time to time, in an aggregate principal amount not
less than $3,000,000 or any whole multiple of $1,000,000 in excess
thereof.
(b) Mandatory Permanent Reduction. The Aggregate
Commitment shall be permanently reduced by the following amounts: (i)
100% of the Net Cash Proceeds received by the Borrower or any of its
Subsidiaries from any issuance of Funded Debt (other than Funded Debt
permitted pursuant to Section 10.1), (ii) 100% of the Net Cash Proceeds
received by the Borrower or any of its Subsidiaries in connection with
any sale of assets (including its equity ownership in any Person) not
permitted pursuant to Section 10.6 (a) through (e) unless, so long as
no Default or Event of Default has occurred and is continuing, such Net
Cash Proceeds are reinvested in similar assets (or otherwise in a
manner acceptable to the Administrative Agent, in its sole discretion)
within 270 days after receipt of such Net Cash Proceeds; provided, that
this clause (ii) shall not apply with respect to up to $10,000,000 of
the aggregate Net Cash Proceeds received by the Borrower and its
Subsidiaries prior to the Conversion Date and (iii) 100% of the Net
Cash Proceeds received by the Borrower or any of its Subsidiaries under
any policy of insurance of such Person or in connection with any
condemnation proceeding involving property of such Person, unless, so
long as no Default or Event of Default has occurred and is continuing,
such Net Cash Proceeds are utilized by the Borrower or such Subsidiary
within one hundred eighty (180) days of receipt of such Net Cash
Proceeds to replace or repair any of its assets damaged in connection
with the related claim or proceeding.
(c) Regular Quarterly Reductions. Commencing with the
last day of the fiscal quarter ending June 30, 2003 (the "Conversion
Date") and continuing through the Revolving Credit Termination Date,
the Aggregate Commitment shall be reduced on the last day of each
fiscal quarter in equal quarterly reduction amounts (the "Reduction
Amounts") equal to the
<PAGE> 3
amount required to reduce the Aggregate Commitment to $50,000,000 as of
September 30, 2004; provided, that each of the Reduction Amounts
remaining after any reduction pursuant to Section 2.6(b) shall be
adjusted on a pro rata basis in connection with such reduction.
(d) Repayments. Each permanent reduction permitted or
required pursuant to this Section 2.6 shall be accompanied by a payment
of principal sufficient to reduce the aggregate outstanding Extensions
of Credit of the Lenders after such reduction to the Aggregate
Commitment as so reduced and if the Aggregate Commitment as so reduced
is less than the aggregate amount of all outstanding Letters of Credit,
the Borrower shall be required to deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit. Any
reduction of the Aggregate Commitment to zero shall be accompanied by
payment of all outstanding Obligations (and furnishing of cash
collateral satisfactory to the Administrative Agent for all L/C
Obligations) and shall result in the termination of the Commitments and
Credit Facility. Such cash collateral shall be applied in accordance
with Section 11.2(b). If the reduction of the Aggregate Commitment
requires the repayment of any LIBOR Rate Loan, such repayment shall be
accompanied by any amount required to be paid pursuant to Section 4.9
hereof."
(f) Section 2.7 of the Credit Agreement is hereby deleted in its
entirety and the following Section 2.7 shall be substituted in lieu thereof:
SECTION 2.7 Termination of Credit Facility. The Credit
Facility shall terminate on the earliest of (a) September 30, 2004, (b)
the date of permanent reduction of the Aggregate Commitment in whole
pursuant to Section 2.6 and (c) the date of termination by the
Administrative Agent on behalf of the Lenders pursuant to Section
11.2(a).
(g) The initial clause of Section 2.8 of the Credit Agreement is
hereby deleted in its entirety and the following shall be substituted in lieu
thereof:
"SECTION 2.8 Increase in Aggregate Commitment. So long as no
Default or Event of Default shall have occurred and be continuing, at any time
prior to the Conversion Date,"
(h) Section 4.1(b)(iv) of the Credit Agreement is hereby deleted
in its entirety and the following Section 4.1(b)(iv) shall be substituted in
lieu thereof:
"(iv) no Interest Period shall extend beyond the Revolving
Credit Termination Date; and"
(i) Section 4.1(c)(ii) of the Credit Agreement is hereby deleted
in its entirety and the following Section 4.1(c)(ii) shall be substituted in
lieu thereof:
"(ii) upon the initial Adjustment Date and at all times
thereafter, be determined by reference to the Adjusted Leverage Ratio
in accordance with the following charts:
<TABLE>
<CAPTION>
Adjusted
Leverage Applicable Margin Per Annum
Level Ratio Prior to April 1, 2003
- ----- ----- LIBOR Rate Base Rate
------------------------------
<S> <C> <C> <C>
1 Greater than or equal to 3.0 to 1.00 2.000% 0.750%
2 Less than 3.0 to 1.0 but greater than
or equal to 2.50 to 1.0 1.875% 0.625%
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
3 Less than 2.5 to 1.0 but greater than
or equal to 2.0 to 1.0 1.750% 0.500%
4 Less than 2.0 to 1.0 but greater than
or equal to 1.50 to 1.0 1.625% 0.375%
5 Less than 1.50 to 1.0 but greater than
or equal to 1.0 to 1.0 1.500% 0.250%
6 Less than 1.0 to 1.0 1.250% 0.000%
</TABLE>
<TABLE>
<CAPTION>
Adjusted Applicable Margin Per Annum
Leverage Commencing with April 1, 2003
Level Ratio and thereafter
- ----- ----- LIBOR Rate Base Rate
----------------------------
<S> <C> <C> <C>
1 Greater than or equal to 3.0 to 1.00 2.500% 1.250%
2 Less than 3.0 to 1.0 but greater than
or equal to 2.50 to 1.0 2.375% 1.125%
3 Less than 2.5 to 1.0 but greater than
or equal to 2.0 to 1.0 2.250% 1.000%
4 Less than 2.0 to 1.0 but greater than
or equal to 1.50 to 1.0 2.125% 0.875%
5 Less than 1.50 to 1.0 but greater than
or equal to 1.0 to 1.0 2.000% 0.750%
6 Less than 1.0 to 1.0 1.750% 0.500%
</TABLE>
Adjustments, if any, in the Applicable Margin shall be made by
the Administrative Agent on the tenth (10th) Business Day (the
"Adjustment Date") after receipt by the Administrative Agent of
financial statements for the Borrower and its Subsidiaries delivered
under Section 7.1(a) or (b), as applicable, and the accompanying
Officer's Compliance Certificate setting forth the Adjusted Leverage
Ratio of the Borrower and its Subsidiaries as of the most recent fiscal
quarter end. The Administrative Agent agrees to give the Borrower and
the Lenders notice of any adjustment in the Applicable Margin within
two (2) Business Days of such adjustment; provided, that the
Administrative Agent's failure to give such notice shall not result in
any liability to the Administrative Agent or in any way affect the
validity of any such adjustment. In the event the Borrower fails to
deliver such financial statements and certificate within the time
required by Sections 7.1(a) and 7.2 hereof, the Applicable Margin shall
be the highest Applicable Margin set forth above until the delivery of
such financial statements and certificate unless at such time the
outstanding principal balance of the Loans are bearing interest at the
"default rate" set forth in Section 4.1(d) below in which case the
Applicable Margin shall not be increased pursuant to this sentence."
(j) Section 9.4 of the Credit Agreement is hereby deleted in its
entirety and the following Section 9.4 shall be substituted in lieu thereof:
<PAGE> 5
SECTION 9.4 Capital Expenditures. Permit Capital Expenditures plus the
aggregate investments permitted by Sections 10.4(d) and (f) made by the
Borrower and its Subsidiaries after the Closing Date (excluding any
investment to the extent funded with the capital stock of the Borrower)
to be greater than the following amounts in the aggregate during the
following Fiscal Years:
<TABLE>
<CAPTION>
Fiscal Year Capital Expenditures
----------- --------------------
<S> <C>
1998 (including only the
portion thereof remaining
after the Closing Date) $ 35,000,000
1999 $ 75,000,000
2000 $ 90,000,000
2001 $100,000,000
2002 $ 80,000,000
2003 and thereafter $ 80,000,000
</TABLE>
provided, that (a) investments in any single restaurant unit owned by a
Non-Controlled Joint Venture shall not exceed $1,500,000, (b)
investments in Non-Controlled Joint Ventures shall not exceed
$22,500,000 in the aggregate on any date of determination and (c) in no
event shall more than forty percent (40%) of aggregate Capital
Expenditures permitted in any Fiscal Year be used for Capital
Expenditures with respect to The Capital Grille and Bugaboo Creek Steak
House restaurants, on a combined basis. For the purposes of this
Section 9.4 "Non-Controlled Joint Venture" shall mean a joint venture
in which the Borrower and its Subsidiaries do not own more than fifty
percent (50%) of the outstanding capital stock or other ownership
interests having ordinary voting power to elect a majority of the board
of directors or other managers of such Person.
(k) Section 10.1(d) of the Credit Agreement is hereby amended by
deleting the number "$20,000,000" set forth therein and substituting therefore
the number "$40,000,000".
(l) Section 10.7(d) of the Credit Agreement is hereby deleted in
its entirety and the following Section 10.7(d) shall be substituted in lieu
thereof:
"(d) the Borrower may purchase, redeem, retire or
otherwise acquire shares of its capital stock in an aggregate amount
not to exceed $10,000,000 for the period from and including the date of
the Second Amendment through and including the Revolving Credit
Termination Date (plus, up to $10,000,000 of the Net Cash Proceeds
received by the Borrower or any of its Subsidiaries prior to the
Conversion Date from any sale of assets permitted pursuant to Section
10.6(f) above); and"
4. Waivers of Credit Agreement. The Borrower and its Subsidiaries
intend to enter into a corporate restructuring (the "Corporate Restructuring")
pursuant to which, among other things, (a) certain assets will be transferred to
Bugaboo Creek Steakhouse, Inc. ("Bugaboo"), (b) the entities owning
substantially all of the operations of The Capital Grille restaurants will be
merged into The Capital Grille of Charlotte, Inc., which entity will change its
name to Capital Grille Holdings, Inc. ("Capital Grille Holdings"), (c) the
entities owning substantially all of the operations of Bugaboo Creek Steak House
restaurants will be merged into Bugaboo Creek of Newark, Inc., which entity will
change its name to Bugaboo Creek Holdings, Inc. ("Bugaboo Creek Holdings") (d)
the operations of Old Grist Mill and Hemenways restaurants will each be
consolidated into separate holding companies named Grist Mill Holdings, Inc.
("Grist Mill Holdings") and Hemenway Holdings, Inc. ("Hemenway Holdings"),
respectively, and (e) Bugaboo will enter into transactions with certain
Affiliates to manage the operations of restaurants they own. The Administrative
Agent and the Lenders hereby agree to waive the provisions of Sections 10.4,
10.5, 10.6 and 10.8 solely to permit the Corporate Restructuring; provided, that
(i) each of the Borrower and Bugaboo shall survive the Corporate Restructuring;
provided, that Bugaboo shall be permitted to change its name to Rare Hospitality
Management, Inc., (ii) each of Capital Grille Holdings, Bugaboo Creek Holdings,
Grist Mill Holdings and Hemenway Holdings shall be Wholly-Owned Subsidiaries of
Bugaboo, (iii) neither the Borrower nor Bugaboo shall make
<PAGE> 6
any sale or transfer of assets in connection with the Corporate Restructuring
except for a sale or transfer of assets to their respective Wholly-Owned
Subsidiaries, (iv) neither the Borrower nor Bugaboo shall make any investments
in connection with the Corporate Restructuring except investments in their
respective Wholly-Owned Subsidiaries and (v) the Borrower and Bugaboo shall
provide such documents reasonably requested by the Administrative Agent
reflecting the name change of Bugaboo to Rare Hospitality Management, Inc.,
including without limitation, new stock certificates and stock powers pledged
pursuant to the Pledge Agreement.
5. Representations and Warranties/No Default. By its execution
hereof, the Borrower hereby certifies that (giving effect to this Second
Amendment) each of the representations and warranties set forth in the Credit
Agreement and the other Loan Documents is true and correct in all material
respects as of the date hereof as if fully set forth herein, except to the
extent that such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date), and that as of
the date hereof no Default or Event of Default has occurred and is continuing.
6. Fees. The Borrower shall pay (a) to each of the Lenders party
to this Second Amendment an amendment fee in an amount equal to the product of
(i) .10% multiplied by (ii) the commitment of such Lender under the Credit
Agreement and (b) to the Administrative Agent, the fees set forth in a separate
fee letter of even date herewith.
7. Expenses. The Borrower shall pay all reasonable out-of-pocket
expenses of the Administrative Agent in connection with the preparation,
execution and delivery of this Second Amendment, including without limitation,
the reasonable fees and disbursements of counsel for the Administrative Agent.
8. Governing Law. This Second Amendment shall be governed by and
construed in accordance with the laws of the State of North Carolina.
9. Counterparts. This Second Amendment may be executed in
separate counterparts, each of which when executed and delivered is an original
but all of which taken together constitute one and the same instrument.
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed as of the date and year first above written.
[CORPORATE SEAL] RARE HOSPITALITY INTERNATIONAL, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
FIRST UNION NATIONAL BANK,
as Administrative Agent, Lender, Swingline Lender
and Issuing Lender
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
BANKBOSTON, N.A., as Co-Agent and as Lender
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
FLEET NATIONAL BANK, as Co-Agent and as
Lender
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
SOUTHTRUST BANK, N.A., as Lender
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
THE FUJI BANK, LIMITED, as Lender
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
AMSOUTH BANK, as Lender
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
WACHOVIA BANK, N.A., as Lender
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
<PAGE> 1
EXHIBIT 10(b)
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Third Amendment") is
made and entered into as of this 3rd day of March, 2000 by and among RARE
HOSPITALITY INTERNATIONAL, INC., a corporation organized under the laws of
Georgia (the "Borrower"), the Lenders who are or may become a party to the
Credit Agreement referred to below, FIRST UNION NATIONAL, as Administrative
Agent for the Lenders (the "Administrative Agent) and BANKBOSTON, N.A. and FLEET
NATIONAL BANK, as Co-Agents (collectively, the "Co-Agents").
Statement of Purpose
The Lenders agreed to extend certain extensions of credit to the
Borrower pursuant to the Amended and Restated Credit Agreement dated as of
August 26, 1998 by and among the Borrower, the Lenders, the Administrative Agent
and the Co-Agents (as amended by the First Amendment to Credit Agreement dated
as of December 31, 1998, the Second Amendment to Credit Agreement dated as of
November 4, 1999 and as further amended or supplemented from time to time, the
"Credit Agreement").
The parties now desire to amend the Credit Agreement in certain
respects, all on the terms and conditions set forth below.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Effect of Amendments. Except as expressly amended hereby, the
Credit Agreement and Loan Documents shall be and remain in full force and
effect.
2. Capitalized Terms. All capitalized undefined terms used in
this Third Amendment shall have the meanings assigned thereto in the Credit
Agreement.
3. Modification of Credit Agreement. The Credit Agreement is
hereby amended as follows:
(a) Section 9.4 of the Credit Agreement is hereby amended by
inserting the following sentence at the end thereof:
"Notwithstanding anything to the contrary set forth herein, each of the
amounts set forth in the chart above shall be reduced by an amount
equal to the amount of cash and cash equivalents used by the Borrower
in connection with stock repurchases and redemptions permitted pursuant
to Section 10.7(d) below."
(b) Section 10.7(d) of the Credit Agreement is hereby deleted in
its entirety and the following Section 10.7(d) shall be substituted in lieu
thereof:
"(d) the Borrower may purchase, redeem, retire or
otherwise acquire shares of its capital stock in an aggregate amount
not to exceed $25,000,000 for the period from and including the date of
the Second Amendment through and including the Revolving Credit
Termination Date (plus, up to $10,000,000 of the Net Cash Proceeds
received by the Borrower or any of its Subsidiaries prior to the
Conversion Date from any sale of assets permitted pursuant to Section
10.6(f) above); and"
4. Representations and Warranties/No Default. By its execution
hereof, the Borrower hereby certifies that (giving effect to this Third
Amendment) each of the representations and warranties set forth in the Credit
Agreement and the other Loan Documents is true and correct in all material
respects as of the date hereof as if fully set forth herein, except to the
extent that such representations and warranties expressly relate to an earlier
date (in which
<PAGE> 2
case such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date), and that as of the date
hereof no Default or Event of Default has occurred and is continuing.
5. Expenses. The Borrower shall pay all reasonable out-of-pocket
expenses of the Administrative Agent in connection with the preparation,
execution and delivery of this Third Amendment, including without limitation,
the reasonable fees and disbursements of counsel for the Administrative Agent.
6. Governing Law. This Third Amendment shall be governed by and
construed in accordance with the laws of the State of North Carolina.
7. Counterparts. This Third Amendment may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be duly executed as of the date and year first above written.
[CORPORATE SEAL] RARE HOSPITALITY INTERNATIONAL, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
FIRST UNION NATIONAL BANK,
as Administrative Agent, Lender, Swingline Lender
and Issuing Lender
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
BANKBOSTON, N.A., as Co-Agent and as Lender
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLEET NATIONAL BANK, as Co-Agent and as
Lender
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
SOUTHTRUST BANK, N.A., as Lender
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
THE FUJI BANK, LIMITED, as Lender
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
WACHOVIA BANK, N.A., as Lender
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q OF
RARE HOSPITALITY INTERNATIONAL, INC. FOR THE THREE MONTH PERIOD ENDED APRIL 2,
2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> DEC-27-1999
<PERIOD-END> APR-02-2000
<CASH> 4,136
<SECURITIES> 0
<RECEIVABLES> 4,089
<ALLOWANCES> 0
<INVENTORY> 10,101
<CURRENT-ASSETS> 27,132
<PP&E> 192,132<F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 234,983
<CURRENT-LIABILITIES> 41,046
<BONDS> 52,732
0
0
<COMMON> 110,790
<OTHER-SE> 25,681
<TOTAL-LIABILITY-AND-EQUITY> 234,983
<SALES> 120,518
<TOTAL-REVENUES> 120,612
<CGS> 43,071
<TOTAL-COSTS> 98,406
<OTHER-EXPENSES> 9,235
<LOSS-PROVISION> 1,000
<INTEREST-EXPENSE> 1,021
<INCOME-PRETAX> 9,297
<INCOME-TAX> 3,070
<INCOME-CONTINUING> 6,227
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,227
<EPS-BASIC> 0.52
<EPS-DILUTED> 0.50
<FN>
<F1>ASSET VALUES REPRESENT NET AMOUNTS.
</FN>
</TABLE>
