UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
FORM 10-Q/A
Amendment No. 1 to Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 27, 1998
Commission File Number: 0-20716
TACO CABANA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 74-2201241
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8918 Tesoro Dr., Suite 200
San Antonio, Texas 78217
(Address of principal executive offices)
(210) 804-0990
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days:
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Class Outstanding at October 30, 1998
Common Stock 13,633,150 shares<PAGE>
TACO CABANA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 28, September 27,
1997 1998
------------ -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................. $ 339,000 $ 803,000
Receivables, net.......................... 502,000 316,000
Inventory................................. 2,105,000 2,287,000
Prepaid expenses.......................... 1,704,000 3,616,000
Federal income taxes receivable........... 200,000 200,000
----------- -----------
Total current assets...................... 4,850,000 7,222,000
PROPERTY AND EQUIPMENT, net............... 59,540,000 68,784,000
NOTES RECEIVABLE.......................... 344,000 292,000
INTANGIBLE ASSETS, net.................... 11,293,000 10,864,000
OTHER ASSETS.............................. 233,000 204,000
----------- -----------
TOTAL.....................................$76,260,000 $87,366,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................... $4,430,000 $3,838,000
Accrued liabilities....................... 6,266,000 6,046,000
Current maturities of long-term debt
and capital leases........................ 1,573,000 2,105,000
Line of credit............................ 4,223,000 4,270,000
----------- -----------
Total current liabilities................. 16,492,000 16,259,000
LONG-TERM OBLIGATIONS, net of current maturities:
Capital leases............................ 2,357,000 2,196,000
Long-term debt............................ 11,170,000 19,774,000
----------- -----------
Total long-term obligations............... 13,527,000 21,970,000
ACQUISITION AND CLOSED RESTAURANT
LIABILITIES............................... 9,126,000 9,433,000
DEFERRED LEASE PAYMENTS................... 702,000 771,000
STOCKHOLDERS' EQUITY:
Common stock.............................. 157,000 157,000
Additional paid-in capital................ 97,095,000 97,315,000
Retained deficit..........................(57,278,000)(49,230,000)
Treasury stock, at cost (871,937 shares
at December 28, 1997 and 1,862,437
shares at September 27, 1998)........... (3,561,000) (9,309,000)
----------- -----------
Total stockholders' equity.............. 36,413,000 38,933,000
----------- -----------
TOTAL.....................................$76,260,000 $87,366,000
=========== ===========
See Notes to Condensed Consolidated Financial Statements.
TACO CABANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Thirteen Weeks Ended
----------------------------
September 28,September 27,
1997 1998
------------- -------------
REVENUES:
Restaurant sales.......................... $34,967,000 $36,176,000
Franchise fees and royalty income......... 84,000 94,000
----------- -----------
Total revenues............................ 35,051,000 36,270,000
----------- -----------
COSTS AND EXPENSES:
Restaurant cost of sales.................. 10,873,000 11,102,000
Labor..................................... 9,794,000 9,599,000
Occupancy................................. 2,123,000 1,966,000
Other restaurant operating costs.......... 6,899,000 6,259,000
General and administrative................ 1,515,000 1,911,000
Depreciation, amortization and restaurant
opening costs............................. 2,698,000 1,995,000
----------- -----------
Total costs and expenses.................. 33,902,000 32,832,000
----------- -----------
INCOME FROM OPERATIONS.................... 1,149,000 3,438,000
----------- -----------
INTEREST EXPENSE, NET..................... (256,000) (543,000)
----------- -----------
INCOME BEFORE INCOME TAXES................ 893,000 2,895,000
PROVISION FOR INCOME TAXES................ (331,000) -
----------- -----------
NET INCOME................................ $562,000 $2,895,000
=========== ===========
BASIC EARNINGS PER SHARE.................. $ 0.04 $ 0.20
=========== ===========
BASIC WEIGHTED SHARES OUTSTANDING......... 15,036,811 14,186,259
=========== ===========
DILUTED EARNINGS PER SHARE................ $ 0.04 $ 0.20
=========== ===========
DILUTED WEIGHTED SHARES OUTSTANDING....... 15,108,018 14,305,200
=========== ===========
See Notes to Condensed Consolidated Financial Statements.
TACO CABANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Thirty-Nine weeks Ended
-------------------------------
September 28,September 27,
1997 1998
------------- ------------
REVENUES:
Restaurant sales.......................... $99,171,000 $104,704,000
Franchise fees and royalty income......... 267,000 265,000
----------- ------------
Total revenues............................ 99,438,000 104,969,000
----------- ------------
COSTS AND EXPENSES:
Restaurant cost of sales.................. 30,607,000 31,723,000
Labor..................................... 27,173,000 28,009,000
Occupancy................................. 6,222,000 5,830,000
Other restaurant operating costs.......... 18,650,000 18,355,000
General and administrative................ 5,089,000 5,777,000
Depreciation, amortization and restaurant
opening costs............................. 7,758,000 5,837,000
----------- -----------
Total costs and expenses.................. 95,499,000 95,531,000
----------- -----------
INCOME FROM OPERATIONS.................... 3,939,000 9,438,000
----------- -----------
INTEREST EXPENSE, NET..................... (772,000) (1,389,000)
----------- -----------
INCOME BEFORE FOR INCOME TAXES............ 3,167,000 8,049,000
PROVISION FOR INCOME TAXES................ (1,172,000) -
----------- -----------
NET INCOME................................ $1,995,000 $8,049,000
=========== ===========
BASIC EARNINGS PER SHARE.................. $ 0.13 $ 0.55
=========== ===========
BASIC WEIGHTED SHARES OUTSTANDING......... 15,474,687 14,593,555
=========== ===========
DILUTED EARNINS PER SHARE................. $ 0.13 $ 0.55
=========== ===========
DILUTED WEIGHTED SHARES OUTSTANDING....... 15,555,680 14,746,499
=========== ===========
See Notes to Condensed Consolidated Financial Statements
TACO CABANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Thirty-Nine weeks Ended
-------------------------------
September 28,September 27,
1997 1998
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................ $1,995,000 $8,049,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization......... 7,758,000 5,375,000
Deferred income taxes................. 2,313,000 -
Capitalized interest.................. (88,000) (94,000)
Deferred lease payments............... (114,000) 69,000
Changes in operating working capital
items............................... (2,188,000) (2,637,000)
---------- -----------
Net cash provided by operating activities. 9,676,000 10,762,000
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........(12,838,000)(16,987,000)
Proceeds from the sale of property and
equipment............................... 1,379,000 3,195,000
---------- -----------
Net cash used for investing activities....(11,459,000)(13,792,000)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable
and draws on line of credit............. 13,173,000 11,130,000
Principal payments under long-term debt
and line of credit...................... (8,213,000) (1,967,000)
Principal payments under capital leases... (146,000) (141,000)
Purchase of treasury stock................ (3,561,000) (5,748,000)
Exercise of stock options................. - 220,000
---------- -----------
Net cash provided by financing activities. 1,253,000 3,494,000
---------- -----------
NET (DECREASE) INCREASE IN CASH........... (530,000) 464,000
CASH AND CASH EQUIVALENTS, beginning of
period.................................. 748,000 339,000
---------- -----------
CASH AND CASH EQUIVALENTS, end of period.. $218,000 $803,000
========== ===========
See Notes to Condensed Consolidated Financial Statements.
TACO CABANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Principles of Consolidation - The consolidated financial statements include all
accounts of Taco Cabana, Inc. and its wholly-owned subsidiaries (the Company).
All significant intercompany balances and transactions have been eliminated.
The unaudited Condensed Consolidated Financial Statements include all
adjustments, consisting of normal, recurring adjustments and accruals,
which the Company considers necessary for fair presentation of financial
position and the results of operations for the periods presented. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted. The interim financial statements should be
read in conjunction with the Company's Annual Report on Form 10-K for the
year ended December 28, 1997.
Recently Issued Accounting Pronouncements: In April 1998, the Accounting
Standards Executive Committee of the American Institute of Certified Public
Accountants (AICPA) issued Statement of Position 98-5, "Reporting on the
Costs of Start-Up Activities". The accounting standard requires entities to
expense as incurred all start-up and preopening costs that are not otherwise
capitalizable as long-lived assets. The accounting standard is effective
for fiscal years beginning after December 15, 1998, with earlier application
encouraged. The Company adopted the accounting standard during the first
quarter of 1998. The cumulative effect of the change in the accounting principle
is not material to the results of operations or financial position of the
Company.
2. Earnings per Share
Basic earnings per share was computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for the
reporting period. Diluted earnings per share reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock. Outstanding stock options issued by
the Company represent the only dilutive effect reflected in diluted weighted
average shares. All earnings per share amounts for all periods have been
presented, and where necessary, restated to conform to the Statement of
Financial Accounting Standards No. 128, Earnings per Share.
The following table sets forth the computation of basic and diluted earnings per
share:
13 Weeks Ended 39 Weeks Ended
-------------- --------------
September 28, September 27, September 28, September 27,
1997 1998 1997 1998
------------ ------------ ------------ ------------
Numerator for basic and
diluted earnings per
share - net income... $562,000 $2,895,000 $1,995,000 $8,049,000
Denominator for basic
earnings per share:
Weighted-average
shares.......... 15,036,811 14,186,259 15,474,687 14,593,555
Effect of dilutive
securities:
Employee stock options 71,207 118,941 80,993 152,944
---------- ---------- ---------- ----------
Denominator for diluted
earnings per share: Adjusted
weighted-average and assumed
conversions.......... 15,108,018 14,305,200 15,555,680 14,746,499
========== ========== ========== ==========
Basic earnings
per share............ $ 0.04 $ 0.20 $ 0.13 $ 0.55
========== ========== ========== ==========
Diluted earnings
per share............ $ 0.04 $ 0.20 $ 0.13 $ 0.55
========== ========== ========== ==========
3. Supplemental Disclosure of Cash Flow Information
Thirty-nine weeks Ended
-----------------------
September 28, September 27,
------------ -------------
1997 1998
------------ -------------
(Unaudited) (Unaudited)
Cash paid for interest ......... $ 890,000 $1,313,000
Interest capitalized on
construction costs ........... 88,000 94,000
Cash paid for income taxes ..... 74,000 -
Cash received for income taxes . 4,000 -
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 Financial Data Schedule. Filed with EDGAR version.*
Amended Financial Statements.**
No reports on Form 8-K were filed during the period covered by this report.
- --------------------
* Filed previously.
** Filed herewith.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: November 18, 1998 Taco Cabana, Inc.
/s/David G. Lloyd
----------------------------------------------
David G. Lloyd
Senior Vice President, Chief Financial Officer,
Secretary and Treasurer
Signing on behalf of the registrant and as the
principal financial and accounting officer
