<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 1997
------------------------------------------------
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 1-12692
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MORTON'S RESTAURANT GROUP, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3490149
- ------------------------------------------------------------------------------
(State or other jurisdiction of incorporation (I.R.S. employer
or organization) identification no.)
3333 New Hyde Park Road, Suite 210, New Hyde Park, New York 11042
- ------------------------------------------------------------------------------
(Address of principal executive offices) (zip code)
516-627-1515
- ------------------------------------------------------------------------------
(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
------- -------
As of May 5, 1997, the registrant had 6,472,053 Shares of its Common Stock,
$.01 par value, issued and outstanding.
1
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MORTON'S RESTAURANT GROUP, INC. AND SUBSIDIARIES
INDEX
Part I - Financial Information Page
Item 1. Financial Statements
Consolidated Balance Sheets as of March 30, 1997 and December 29, 1996 3-4
Consolidated Statements of Operations for the three month periods
ended March 30, 1997 and March 31, 1996 5
Consolidated Statements of Cash Flows for the three month periods
ended March 30, 1997 and March 31, 1996 6
Notes to Consolidated Financial Statements 7-9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10-13
Part II - Other Information
Item 1. Legal Proceedings 14
Item 4. Submission of Matters to a Vote of Stockholders 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
2
<PAGE>
Item 1. Financial Statements
MORTON'S RESTAURANT GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(amounts in thousands)
March 30, December 29,
1997 1996
--------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 2,088 $ 2,276
Accounts receivable 1,762 2,116
Inventories 4,701 4,254
Landlord construction receivables, prepaid
expenses and other current assets 2,443 2,408
Deferred income taxes 3,996 3,808
Assets held for sale 348 12,474
-------- --------
Total current assets 15,338 27,336
Property and equipment, at cost:
Furniture, fixtures and equipment 14,489 13,552
Leasehold improvements 15,842 14,188
Construction in progress 1,205 1,284
-------- --------
31,536 29,024
Less accumulated depreciation and
amortization 4,841 4,353
-------- --------
Net property and equipment 26,695 24,671
-------- --------
Intangible assets, net of accumulated
amortization of $3,155 at March 30, 1997
and $3,054 at December 29, 1996 12,840 12,941
Other assets and deferred expenses, net of
accumulated amortization of $5,250 at
March 30, 1997 and $3,963 at
December 29, 1996 7,259 5,909
Deferred income taxes 5,184 6,129
-------- --------
$ 67,316 $ 76,986
-------- --------
-------- --------
(Continued)
3
<PAGE>
MORTON'S RESTAURANT GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
(amounts in thousands, except share data)
March 30, December 29,
1997 1996
-------- -----------
(unaudited)
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 5,044 $ 4,694
Accrued expenses 7,040 7,795
Accrued income taxes 452 700
Liabilities related to assets held for sale 4,234 12,134
-------- --------
Total current liabilities 16,770 25,323
Bank debt 21,697 24,900
Other liabilities 5,608 5,676
-------- --------
Total liabilities 44,075 55,899
-------- --------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value per share.
Authorized 3,000,000 shares, no shares
issued or outstanding - -
Common stock, $.01 par value per share.
Authorized 25,000,000 shares, issued and
outstanding 6,461,113 shares at
March 30, 1997 and 6,443,673 shares at
December 29, 1996 65 64
Nonvoting common stock, $.01 par value per
share. Authorized 3,000,000 shares, no
shares issued or outstanding - -
Additional paid-in capital 61,684 61,632
Accumulated deficit (38,508) (40,609)
-------- --------
Total stockholders' equity 23,241 21,087
-------- --------
$ 67,316 $ 76,986
-------- --------
-------- --------
See accompanying notes to consolidated financial statements.
4
<PAGE>
MORTON'S RESTAURANT GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(amounts in thousands, except per share data)
Three Months Ended
March 30, March 31,
1997 1996
-------- --------
(unaudited)
Revenues $ 46,534 $ 48,869
Food and beverage costs 15,945 16,271
Restaurant operating expenses 20,284 23,534
Depreciation, amortization and other
non-cash charges 2,087 1,594
General and administrative expenses 3,690 3,702
Marketing and promotional expenses 1,107 1,139
Interest expense, net 620 570
-------- --------
Income before income taxes 2,801 2,059
Income tax expense 700 515
-------- --------
Net income $ 2,101 $ 1,544
-------- --------
-------- --------
Income per share $ 0.31 $ 0.23
-------- --------
-------- --------
Weighted average shares outstanding 6,827 6,743
-------- --------
-------- --------
See accompanying notes to consolidated financial statements.
5
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MORTON'S RESTAURANT GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(amounts in thousands)
Three Months Ended
March 30, March 31,
1997 1996
-------- --------
(unaudited)
Cash flows from operating activities:
Net income $ 2,101 $ 1,544
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and other
non-cash charges 2,087 1,594
Deferred income taxes 757 400
Change in assets and liabilities:
Accounts receivable 354 1,277
Inventories (447) (60)
Prepaid expenses and other assets (1,970) (152)
Accounts payable, accrued expenses
and other liabilities (855) (1,627)
Accrued income taxes (248) (267)
-------- --------
Net cash provided by operating activities 1,779 2,709
-------- --------
Cash flows from investing activities:
Purchases of property and equipment, net (2,384) (361)
Payments for start-up costs, licenses and
other deferred expenses (741) (1,822)
Proceeds from sale of Mick's and
Peasant restaurants 4,308 -
-------- --------
Net cash provided (used) by investing
activities 1,183 (2,183)
-------- --------
Cash flows from financing activities:
Principal reduction on bank debt (7,600) (1,000)
Proceeds from bank debt 4,397 1,550
Payments on note payable to related party - (483)
Net proceeds from issuance of stock 53 -
-------- --------
Net cash provided (used) by financing
activities (3,150) 67
-------- --------
Net increase (decrease) in cash and cash
equivalents (188) 593
Cash and cash equivalents at beginning of
period 2,276 2,351
-------- --------
Cash and cash equivalents at end of period $ 2,088 $ 2,944
-------- --------
-------- --------
See accompanying notes to consolidated financial statements.
6
<PAGE>
MORTON'S RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 30, 1997 and March 31, 1996
1) The accompanying unaudited, consolidated financial statements have been
prepared in accordance with instructions to Form 10-Q and, therefore, do not
include all information and footnotes normally included in financial
statements prepared in conformity with generally accepted accounting
principles. They should be read in conjunction with the consolidated
financial statements of Morton's Restaurant Group, Inc., formerly known as
Quantum Restaurant Group, Inc., (the "Company") for the fiscal year ended
December 29, 1996, filed by the Company on Form 10-K with the Securities and
Exchange Commission on March 27, 1997.
The accompanying financial statements are unaudited and include all
adjustments (consisting of normal recurring adjustments and accruals) that
management considers necessary for a fair presentation of its financial
position and results of operations for the interim periods presented. The
results of operations for the interim periods are not necessarily indicative
of the results that may be expected for the entire year.
On May 9, 1996, at the Company's Annual Meeting of Stockholders, the
stockholders voted to change the name of the Company from Quantum Restaurant
Group, Inc. to Morton's Restaurant Group, Inc.
The Company uses a fiscal reporting period ending on the closest Sunday
to December 31. The fiscal year consists of 52 weeks and approximately every
six or seven years, a 53rd week will be added.
2) For the purposes of the consolidated statements of cash flows, the
Company considers all highly liquid instruments purchased with a maturity of
three months or less to be cash equivalents. The Company paid cash interest
and fees, net of amounts capitalized, of approximately $555,000 and $490,000,
and income taxes of approximately $542,000 and $386,000, for the three months
ended March 30, 1997 and March 31, 1996, respectively. During the first
quarter of fiscal 1997 and 1996, the Company entered into capital lease
arrangements of approximately $140,000 and $980,000, respectively, for
restaurant equipment.
3) As described below, on February 6, 1997, the Company completed the sale
of its Atlanta-based Mick's and Peasant restaurants. Effective January 2,
1995, the Company adopted Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of " ("Statement 121").
During the second quarter of fiscal 1995, the Company approved a plan for
the sale of Mick's Restaurants, Inc. ("Mick's") and The Peasant Restaurants,
Inc. ("Peasant"). Pursuant to Statement 121, the Company discontinued
depreciating fixed assets and amortizing goodwill relating to Mick's and
Peasant in April 1995.
Coincident with the Company's approval of the plan of sale, the assets
held for sale and related liabilities for Mick's and Peasant have been
reclassified as "Assets held for sale" and "Liabilities related to assets
held for sale" when the Company reports its financial position. The
accompanying consolidated balance sheets include the following components:
7
<PAGE>
March 30, December 29,
1997 (1) 1996
--------- ------------
(amounts in thousands, unaudited)
Current assets $ 348 $ 2,166
Net property and equipment 2,028 10,704
Unamortized goodwill - 8,077
Other assets 928 2,143
Write-down of carrying values (2,956) (10,616)
--------- ---------
Assets held for sale 348 12,474
--------- ---------
Current liabilities 462 3,495
Other liabilities - 1,612
Lease exit and other transaction costs 3,772 7,027
--------- ---------
Liabilities related to assets held for sale 4,234 12,134
--------- ---------
Net assets (liabilities related to
assets) held for sale $ (3,886) $ 340
--------- ---------
--------- ---------
(1) Includes the five remaining non-Atlanta Mick's restaurants.
The following represents the combined results of Mick's and Peasant for
the periods ended March 30, 1997 and March 31, 1996. Interest expense was not
allocated.
Three Months Ended
March 30, 1997 (2) March 31, 1996
------------------ ---------------
(amounts in thousands,unaudited)
Revenues $ 5,723 $ 15,301
Food and beverage costs 1,702 4,477
Restaurant operating expense 3,449 9,623
Depreciation, amortization and other
non-cash charges 6 65
General and administrative expenses 432 1,044
Marketing and promotional expenses 101 287
--------- ---------
Income (loss) before income taxes $ 33 $ (195)
--------- ---------
--------- ---------
(2) Includes the Atlanta-based Mick's and Peasant restaurants through
February 6, 1997, the date of sale, as discussed below, and the five
remaining non-Atlanta Mick's restaurants which the Company intends to sell or
otherwise dispose of.
Management had been actively seeking potential buyers for the sale of all
Mick's and Peasant restaurants and in the fourth quarter of fiscal 1995
engaged an investment banking firm to assist with the sale. Although
marketing efforts concentrated on selling all of the Mick's and Peasant
restaurants, sales materials indicated that a partial sale would be
considered. Most of the interest received related to the majority of the
restaurants located mainly in the Atlanta area. No meaningful offers were
received for the remaining restaurants (the "Remaining Restaurants"). Cash
flow analyses prepared by management for the Remaining
8
<PAGE>
Restaurants indicated that it would be less costly to close such restaurants
in an orderly fashion, rather than continue to operate them through the end
of their respective lease terms. Accordingly, assets of $8,300,000 related
to the Remaining Restaurants were written off and expenses of $7,200,000,
representing management's estimate of the expected costs to terminate related
leases, were accrued at December 31, 1995. During fiscal 1996 and the first
quarter of 1997, restaurant occupancy expense of approximately $1,498,000 and
$343,000 for the Remaining Restaurants has been charged against the accrual
for lease exit costs, respectively. During fiscal 1996, seven Mick's
restaurants and two Peasant restaurants were closed. During January 1997,
two more Mick's restaurants were closed.
On February 6, 1997, the Company completed the sale of its Atlanta-based
Mick's and Peasant restaurants. In connection with the sale, the Remaining
Restaurants were transferred to another subsidiary of the Company. Pursuant
to these agreements, MRI Acquisition Corporation acquired an 80.1% interest
in Mick's and PRI Acquisition Corporation acquired an 80.1% interest in
Peasant for an aggregate of $6,800,000, consisting of $4,300,000 in cash and
$2,500,000 in the form of two unsecured promissory notes. The Company
retained a 19.9% interest in Mick's and Peasant. In conjunction with the
sale, the Company had recorded a fiscal 1996 fourth quarter charge of
$11,500,000 to write-down the Atlanta-based restaurants to their net
realizable values based on the fair value of the consideration received,
accrue for the various expenses related to the closing of such sale and to
write-off two restaurants which are not part of the sale, one of which was
closed in January 1997. As of April 1997, the Company continues to operate
five Mick's restaurants which the Company intends to sell or otherwise
dispose of.
The write-down and related charges for net assets held for sale reflect
management's best estimate of the costs expected to be incurred in connection
with the disposition of Mick's and Peasant. As a result of the numerous
uncertainties which may impact the actual costs to be incurred by the
Company, such costs may differ from the current estimates used by management.
4) The Company is involved in various legal actions. See "Part II - Other
Information, Item 1. Legal Proceedings" on page 14 of this Form 10-Q for a
discussion of these legal actions.
9
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MORTON'S RESTAURANT GROUP, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Revenues decreased $2.3 million, or 4.8%, to $46.5 million for the three
month period ended March 30, 1997, from $48.9 million during the comparable
1996 period. Revenues from Morton's and Bertolini's increased $7.2 million,
or 21.6%, to $40.8 million for the three month period ended March 30, 1997,
from $33.6 million during the comparable 1996 period. Of the increase in
Morton's and Bertolini's revenues, $5.0 million was attributable to
incremental restaurant revenues from six new restaurants opened after January
1, 1996 and $1.7 million, or 5.6%, was attributable to additional comparable
revenues from restaurants open all of both periods. Average Morton's and
Bertolini's revenues per restaurant open for a full period increased 7.2%.
Included in 1997 first quarter revenues is approximately $0.5 million of
investment income. As stated in Note 3, the Company completed the sale of
its Atlanta-based Mick's and Peasant restaurants on February 6, 1997, and
eleven other Mick's and Peasant restaurants have been closed during fiscal
1996 and January 1997. As a result, revenues for the Mick's and Peasant
restaurants decreased approximately $9.5 million in the first quarter of
fiscal 1997 verses the comparable period of 1996. As of April 1997, the
Company continues to operate five Mick's restaurants which the Company
intends to sell or otherwise dispose of.
Percentage changes in comparable restaurant revenues for the three
month period ended March 30, 1997 versus March 31, 1996 for restaurants open
all of both periods are as follows:
Three Months
Ended March 30, 1997
Percentage Change
---------------------
Morton's 7.7%
Bertolini's -4.1%
Total 5.6%
The Company believes that revenues for the first quarter of 1996 were
adversely affected by severe winter storms in January 1996.
Food and beverage costs decreased from $16.3 million for the three month
period ended March 31, 1996 to $15.9 million for the three month period ended
March 30, 1997. Food and beverage costs excluding all Mick's and Peasant
restaurants increased by $2.4 million to $14.2 million for the three month
period ended March 30, 1997 from $11.8 million recorded for the three month
period ended March 31, 1996. These costs as a percentage of revenues
decreased 0.2% for the three month period. As a result of the sale and
closings of the Mick's and Peasant restaurants as discussed in Note 3, there
was a reduction of approximately $2.8 million in the three month period ended
March 30, 1997 compared to the corresponding 1996 period.
Restaurant operating expenses which include labor, occupancy and other
operating expenses decreased from $23.5 million for the three month period
ended March 31, 1996 to $20.3 million for the three month period ended March
30, 1997, a decrease of $3.2 million. Restaurant operating expenses
excluding all Mick's and Peasant restaurants increased from $13.9 million for
the three month period ended March 31, 1996 to $16.8 million for the
comparable 1997 period. Those costs as a percentage of revenues decreased
10
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0.2% from 41.4% for the three month period ended March 31, 1996 to 41.2% for
the three month period ended March 30, 1997. Offsetting the increase in
total restaurant operating expenses was a reduction of approximately $6.1
million during the three month period ended March 30, 1997 verses the
comparable 1996 period due to the sale and closings of Mick's and Peasant
restaurants as discussed in Note 3.
Depreciation, amortization and other non-cash charges increased from $1.6
million for the three month period ended March 31, 1996 to $2.1 million for
the three month period ended March 30, 1997 and increased from 3.3% of
revenues to 4.5%, respectively. The 1997 period increase is due to increased
startup amortization.
General and administrative expenses for the three month period ended
March 30, 1997 were $3.7 million, which remained flat as compared with the
three month period ended March 31, 1996. General and administrative expenses
excluding all Mick's and Peasant restaurants increased $0.6 million from $2.7
million for the three month period ended March 31, 1996 to $3.3 million for
the comparable 1997 period. Such costs as a percentage of revenues were 8.0%
for the three month period ended March 31, 1997, an increase of 0.1% from the
three month period ended March 30, 1996. The increase in such expense is
driven by incremental costs associated with increased restaurant development.
General and administrative expenses relating to the Mick's and Peasant
restaurant groups decreased $0.6 million during the three month period ended
March 31, 1997 verses the comparable 1996 period as a result of the sale and
closings of Mick's and Peasant restaurants as discussed in Note 3.
Marketing and promotional expenses were $1.1 million for the three month
periods ended March 30, 1997 and March 31, 1996. Marketing and promotional
expenses excluding Mick's and Peasant were $1.0 million, or 2.5% of revenues
for the three months ended March 31, 1997, as compared to $0.9 million, or
2.5% of revenues, for the comparable 1996 period. The increase is driven by
incremental costs associated with increased restaurant development. Mick's
and Peasant marketing and promotional expenses decreased $0.2 million during
the three month period ended March 30, 1997 verses the comparable 1996 period.
Interest expense, net of interest income, remained constant at $0.6
million for the three month periods ended March 30, 1997 and March 31, 1996.
Income tax expense of $0.7 million for the three month period ended March
30, 1997 represents Federal income taxes, which were partially offset by the
establishment of additional deferred tax assets relating to FICA and other
tax credits that were generated during fiscal 1997, as well as state income
taxes.
Liquidity and Capital Resources
In the past, the Company has had, and may have in the future, negative
working capital balances. The Company does not have significant receivables
or inventories and receives trade credit based upon negotiated terms in
purchasing food and supplies. Funds available from cash sales not needed
immediately to pay for food and supplies or to finance receivables or
inventories were used for noncurrent capital expenditures and/or payments of
long-term debt balances under revolving credit agreements.
The Company and BankBoston, N.A. (formerly The First National Bank of
Boston) entered into the Second Amended and Restated Revolving Credit and
Term Loan Agreement dated as of June 19, 1995, as amended from time to time
(collectively the "Credit Agreement"), pursuant to which the Company's credit
facility is $30,000,000, consisting of a $15,000,000 term loan (the "Term
Loan") and a $15,000,000 revolving credit facility (the "Revolving Credit
Facility"). The final maturity date is December 31, 2001. Loans made
pursuant to the Credit Agreement bear interest at a rate equal to the
lender's base rate (plus applicable margin)
11
<PAGE>
or, at the Company's option, the Eurodollar Rate (plus applicable margin).
At March 30, 1997, the Company's applicable margin, calculated pursuant to
the Credit Agreement, was 0.00% on base rate loans and 2.0% on Eurodollar
Rate loans. The Company has no outstanding futures contracts or interest
rate hedge agreements.
During fiscal 1996, BankBoston syndicated portions of the Term Loan and
Revolving Credit Facility of the Credit Agreement to two additional lenders,
Imperial Bank and Heller Financial. BankBoston, as agent for the Lenders,
receives an annual fee of $10,000 paid by the Company.
As of March 30, 1997 and December 29, 1996, the Company had outstanding
borrowings of $19,350,000 and $24,900,000, respectively, under the Credit
Agreement. At March 30, 1997 $221,000 was restricted for letters of credit
issued by the lender on behalf of the Company. Unrestricted and undrawn
funds available to the Company under the Credit Agreement were $10,429,000.
The weighted average interest rate on all bank borrowings on March 30, 1997
was 7.51%. In addition, the Company is obligated to pay fees of 0.25% on
unused loan commitments less than $10,000,000, 0.375% on unused loan
commitments greater than $10,000,000 and a per annum letter of credit fee
(based on the face amount thereof) equal to the applicable margin on the
Eurodollar Rate loans.
The availability under the Credit Agreement is scheduled to reduce by
$800,000 on September 30, 1997 and thereafter principal installments on the
Term Loan of $800,000 each will be due at the end of each calendar quarter
through December 31, 2001. The Revolving Credit Facility will be payable in
full on December 31, 2001. Borrowings under the Credit Agreement are secured
by all tangible and intangible assets of the Company. Total amounts of
principal payable by the Company under the Credit Agreement during the five
years subsequent to March 30, 1997 amount to $1,600,000 in 1997, $3,200,000
in 1998, $3,200,000 in 1999, $3,200,000 in 2000 and $8,150,000 in 2001. The
borrowings under the Company's Credit Agreement have been classified as
long-term on the Company's consolidated balance sheet since the Company may
borrow amounts due under the Term Loan from the Revolving Credit Facility,
including the Term Loan Principal payments due in September 1997. As stated
in Note 3 to the accompanying consolidated financial statements, the Company
has completed the sale of its Atlanta-based Mick's and Peasant restaurants.
Net cash proceeds from the sale were used to reduce the Company's Revolving
Credit Facility.
The Credit Agreement contains certain restrictive covenants with respect
to the Company that, among other things, create limitations (subject to
certain exceptions) on: (i) the incurrence or existence of additional
indebtedness or the granting of liens on assets or contingent obligations;
(ii) the making of investments in any person; (iii) mergers, dispositions of
assets or consolidations; (iv) prepayment of certain other indebtedness; (v)
making capital expenditures above specified amounts; and (vi) the ability to
make certain fundamental changes or to change materially the present method
of conducting the Company's business. The Credit Agreement also requires the
Company to satisfy certain financial ratios and tests. As of March 30, 1997,
the Company believes it was in compliance with such covenants.
In March 1997, a subsidiary of the Company and CNL Financial I, Inc.
("CNL") entered into a $2,500,000 loan agreement (the "CNL Loan"), which
matures on April 1, 2007 and has a 10.02% per annum interest rate. Principle
and interest payments will be made over the term of the loan. Proceeds from
the CNL loan were used to reduce the Company's Revolving Credit Facility.
During the first three months of fiscal 1997, the Company's net
investment in fixed assets and related investment costs, net of capitalized
leases approximated $3.1 million. The Company estimates that it will expend
up to an aggregate of $12.0 million in 1997 to finance ordinary refurbishment
of existing restaurants and pre-opening costs and capital expenditures, net
of landlord development and rent allowances and net of
12
<PAGE>
equipment lease financing, for new restaurants. The Company has entered into
various equipment lease financing agreements with several financial
institutions of which approximately $8.5 million in the aggregate has been
funded from February 1994 through April 1997 and $5.6 million in the
aggregate is available for future fundings. The Company anticipates that
funds generated through operations and funds available through equipment
lease commitments as well as those available under the Credit Agreement will
be sufficient to fund planned expansion.
Forward-Looking Statements
Except for the historical information contained in this Form 10-Q,
certain statements made herein are forward-looking statements that involve
risks and uncertainties and are subject to important factors that could cause
actual results to differ materially from these forward-looking statements,
including without limitation, the effect of economic and market conditions,
the impact of competitive activities, the Company's expansion plans,
restaurant profitability levels and other risks detailed in the Company's
public reports and SEC filings.
13
<PAGE>
MORTON'S RESTAURANT GROUP, INC. AND SUBSIDIARIES
Part II - Other Information
Item 1. Legal Proceedings
The Company is involved in various legal actions incidental to the normal
conduct of its business. Management does not believe that the ultimate
resolution of these actions will have a material adverse effect on the
Company's consolidated financial position, equity, results of operations,
liquidity and capital resources.
Item 4. Submission of Matters to a Vote of Stockholders
No matters were submitted to a vote of stockholders during the quarter for
which this report was filed.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
27.00 Financial Data Schedule
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter for which this
report was filed.
14
<PAGE>
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.
MORTON'S RESTAURANT GROUP, INC.
----------------------------------------
(Registrant)
Date May 12, 1997
-------------------- By: /s/ ALLEN J. BERNSTEIN
------------------------------------
Allen J. Bernstein
Chairman of the Board and
Chief Executive Officer
Date May 12, 1997 By: /s/ THOMAS J. BALDWIN
-------------------- ------------------------------------
Thomas J. Baldwin
Executive Vice President
and Chief Financial Officer
15
<PAGE>
INDEX TO EXHIBITS
The following is a list of all exhibits filed as part of this report.
Exhibit
Number Page Document
- ------- ---- ---------
27.00 Financial Data Schedule
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
30, 1997 FORM 10-Q 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-28-1997
<PERIOD-START> DEC-30-1996
<PERIOD-END> MAR-30-1997
<CASH> 2,088
<SECURITIES> 0
<RECEIVABLES> 1,762
<ALLOWANCES> 0
<INVENTORY> 4,701
<CURRENT-ASSETS> 15,338<F1>
<PP&E> 31,536
<DEPRECIATION> 4,841
<TOTAL-ASSETS> 67,316
<CURRENT-LIABILITIES> 16,770<F2>
<BONDS> 21,697
0
0
<COMMON> 65
<OTHER-SE> 23,176
<TOTAL-LIABILITY-AND-EQUITY> 67,316
<SALES> 46,534
<TOTAL-REVENUES> 46,534
<CGS> 15,945
<TOTAL-COSTS> 38,316
<OTHER-EXPENSES> 4,797
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 620
<INCOME-PRETAX> 2,801
<INCOME-TAX> 700
<INCOME-CONTINUING> 2,101
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,101
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0.31
<FN>
<F1>15.) Current assets include $348 of assets held for sale.
<F2>19.) Current liabilities include $4,234 of liabilities related to assets
held for sale.
</FN>
</TABLE>
