UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended April 4, 1999
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
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 Drive, Suite 200
San Antonio, Texas 78217
(Address of principal executive offices)
Telephone Number (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 of each of the issuer's classes of
common stock, as of the latest practicable date:
Class Outstanding at May 3, 1999
Common Stock 13,384,450 shares
1
TACO CABANA, INC.
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at 3
April 4, 1999 and January 3, 1999
Condensed Consolidated Statements of Income for 4
the Thirteen Weeks Ended April 4, 1999 and
March 29, 1998
Condensed Consolidated Statements of Cash Flows 5
for the Thirteen Weeks Ended April 4, 1999
and March 29, 1998
Notes to Condensed Consolidated Financial 6
Statements
Item 2. Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Items 1 through 5 have been omitted since the registrant has no reportable
events in relation to the items
Item 6. Exhibits and Reports on Form 8-K 15
Signature 16
2
TACO CABANA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
January 3, April 4,
1999 1999
---------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................. $ 719,000 $ 897,000
Receivables, net.......................... 438,000 337,000
Inventory................................. 2,273,000 2,311,000
Prepaid expenses.......................... 3,128,000 3,286,000
Federal income taxes receivable........... 200,000 200,000
---------- -----------
Total current assets...................... 6,758,000 7,031,000
PROPERTY AND EQUIPMENT, net............... 72,250,000 75,963,000
NOTES RECEIVABLE.......................... 258,000 297,000
INTANGIBLE ASSETS, net.................... 10,724,000 10,578,000
OTHER ASSETS.............................. 212,000 235,000
----------- -----------
TOTAL..................................... $90,202,000 $94,104,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................... $5,362,000 $4,692,000
Accrued liabilities....................... 5,265,000 5,629,000
Current maturities of long-term debt
and capital leases........................ 5,704,000 3,238,000
Line of credit............................ 3,550,000 1,540,000
----------- -----------
Total current liabilities................. 19,881,000 15,099,000
LONG-TERM OBLIGATIONS, net of current maturities:
Capital leases............................ 2,140,000 2,082,000
Long-term debt............................ 18,930,000 24,905,000
----------- -----------
Total long-term obligations............... 21,070,000 26,987,000
ACQUISITION AND CLOSED RESTAURANT
LIABILITIES............................... 7,713,000 7,556,000
DEFERRED LEASE PAYMENTS................... 761,000 725,000
STOCKHOLDERS' EQUITY:
Common stock.............................. 159,000 134,000
Additional paid-in capital................ 98,056,000 84,383,000
Retained deficit.......................... (43,544,000)(40,780,000)
Treasury stock, at cost (2,576,937
shares at January 3, 1999)................ (13,894,000) -
------------ -----------
Total stockholders' equity.............. 40,777,000 43,737,000
------------ -----------
TOTAL.....................................$ 90,202,000 $94,104,000
============ ===========
See Notes to Condensed Consolidated Financial Statements.
3
TACO CABANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the Thirteen Weeks Ended
----------------------------
March 29, April 4,
1998 1999
-------------- ------------
REVENUES:
Restaurant sales..........................$32,322,000 $36,836,000
Franchise fees and royalty income......... 85,000 74,000
----------- -----------
Total revenues.......................... 32,407,000 36,910,000
----------- -----------
COSTS AND EXPENSES:
Restaurant cost of sales.................. 9,792,000 10,927,000
Labor..................................... 8,672,000 10,127,000
Occupancy................................. 1,907,000 2,010,000
Other restaurant operating costs.......... 6,002,000 6,251,000
General and administrative................ 1,912,000 2,050,000
Depreciation, amortization and
restaurant opening costs.................. 1,868,000 2,229,000
----------- -----------
Total costs and expenses................ 30,153,000 33,594,000
----------- -----------
INCOME FROM OPERATIONS.................... 2,254,000 3,316,000
----------- -----------
INTEREST EXPENSE, NET..................... (397,000) (552,000)
----------- -----------
INCOME BEFORE INCOME TAXES................ 1,857,000 2,764,000
INCOME TAX EXPENSE........................ - -
----------- -----------
NET INCOME................................ $1,857,000 $2,764,000
=========== ===========
BASIC EARNINGS PER SHARE.................. $ 0.13 $ 0.21
=========== ===========
BASIC WEIGHTED SHARES OUTSTANDING......... 14,826,138 13,350,840
=========== ===========
DILUTED EARNINGS PER SHARE................ $ 0.12 $ 0.20
=========== ===========
DILUTED WEIGHTED SHARES OUTSTANDING....... 15,028,731 13,714,176
=========== ===========
See Notes to Condensed Consolidated Financial Statements.
4
TACO CABANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Thirteen Weeks Ended
----------------------------
March 29, April 4,
1998 1999
------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...............................$ 1,857,000 $2,764,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization......... 1,668,000 2,057,000
Capitalized interest.................. (52,000) (62,000)
Changes in operating working
capital items....................... (1,666,000) (693,000)
----------- ----------
Net cash provided by operating activities 1,807,000 4,066,000
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........ (5,075,000) (5,984,000)
Proceeds from sales of property and
equipment............................... 1,251,000 459,000
----------- ----------
Net cash used for investing activities.... (3,824,000) (5,525,000)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable
and draws on line of credit............. 2,611,000 8,404,000
Principal payments under long-term debt... (639,000) (6,911,000)
Principal payments under capital leases... (44,000) (52,000)
Purchase of treasury stock................ (44,000) -
Exercise of stock options................. 153,000 196,000
----------- ----------
Net cash provided by financing activities 2,037,000 1,637,000
----------- ----------
NET INCREASE IN CASH...................... 20,000 178,000
CASH AND CASH EQUIVALENTS, beginning
of period............................... 339,000 719,000
----------- ----------
CASH AND CASH EQUIVALENTS, end of period.. $ 359,000 $897,000
=========== ==========
See Notes to Condensed Consolidated Financial Statements.
5
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
January 3, 1999.
2. Stockholders' Equity
The Company's Board of Directors previously approved plans to repurchase up
to a total of 4,000,000 shares of the Company's Common Stock. Since the
inception of the stock purchase program, the Company has repurchased a total
of 2,585,000 shares at an aggregate cost of $13.9 million. During the first
quarter of 1999, the Company retired all of the common shares held in
treasury. The cost of the reacquired shares in excess of par value has been
charged to additional paid in capital. The timing, price, quantity and manner
of any future purchases will be made at the discretion of management and will
depend upon market conditions.
3. 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.
6
The following table sets forth the computation of basic and diluted earnings
per share:
Thirteen Weeks Ended
------------------------------
March 29, 1998 April 4, 1999
--------------- -------------
(Unaudited) (Unaudited)
Numerator for basic and diluted
earnings per share - net income $1,857,000 $2,764,000
Denominator:
Denominator for basic earnings -
per share weighted-
average shares 14,826,138 13,350,840
Effect of dilutive securities -
Employee stock options 202,593 363,336
----------- -----------
Denominator for diluted earnings
per share - adjusted weighted-
average and assumed conversions 15,028,731 13,714,176
=========== ===========
Basic earnings per share $ 0.13 $ 0.21
=========== ===========
Diluted earnings per share $ 0.12 $ 0.20
=========== ===========
4. Supplemental Disclosure of Cash Flow Information
Thirteen Weeks Ended
---------------------
March 29, 1998 April 4, 1999
------------- ------------
(Unaudited) (Unaudited)
Cash paid for interest ........... $ 385,000 $ 562,000
Interest capitalized on
construction costs ............... 52,000 62,000
7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
The Company commenced operations in 1978 with the opening of the first Taco
Cabana restaurant in San Antonio, Texas. As of May 3, 1999, the Company had 106
Company-owned restaurants and 10 franchised restaurants. The Company's revenues
are derived primarily from sales by Company-owned restaurants, with franchise
fees and royalty income currently contributing less than 1% of total revenues.
The Company opened two and closed one Company-owned restaurants during the first
quarter of 1999 for a total of 103 company-owned and 10 franchised restaurants.
Subsequent to April 4, 1999, three Company-owned restaurants were opened for a
current systemwide total of 116 restaurants.
8
The following table sets forth for the periods indicated the percentage
relationship to total revenues, unless otherwise indicated, of certain income
statement data. The table also sets forth certain restaurant data for the
periods indicated.
Thirteen Weeks Ended
------------------------
March 29, April 4,
1998 1999
--------- ---------
Income Statement Data:
REVENUES:
Restaurant sales 99.7% 99.8%
Franchise fees and
royalty income 0.3 0.2
----- -----
Total revenues 100.0% 100.0%
===== =====
COSTS AND EXPENSES:
Restaurant cost of sales (1) 30.3 29.7
Labor (1) 26.8 27.5
Occupancy (1) 5.9 5.5
Other restaurant
operating costs (1) 18.6 17.0
General and administrative
costs 5.9 5.6
Depreciation, amortization
and restaurant opening costs 5.8 6.0
----- -----
INCOME FROM OPERATIONS 7.0 9.0
INTEREST EXPENSE (1.2) (1.5)
----- -----
INCOME BEFORE INCOME TAXES 5.7 7.5
INCOME TAX EXPENSE - -
----- -----
NET INCOME 5.7% 7.5%
===== =====
Restaurant Data:
COMPANY OWNED RESTAURANTS:
Beginning of period 98 102
Opened 3 2
Closed (2) (1)
---- ----
End of period 99 103
FRANCHISED RESTAURANTS (2): 11 10
---- ----
TOTAL RESTAURANTS: 110 113
==== ====
(1) Percentage is calculated based upon restaurant sales.
(2) Excludes Two Pesos licensed restaurants.
9
The Thirteen Weeks Ended April 4, 1999 Compared to the Thirteen Weeks Ended
March 29, 1998
Restaurant Sales. Restaurant sales increased by $4.5 million, or 14%, to $36.8
million for the first quarter of 1999 from $32.3 million for the first quarter
in 1998. The increase is due primarily to an increase in sales at existing
restaurants. Comparable store sales, defined as Taco Cabana restaurants that
have been open 18 months or more at the beginning of the quarter, increased
6.5%. Management attributes the increase to several factors including a more
consistent marketing program, increased media expenditures, a commitment to
increased staffing levels at existing restaurants, the ongoing reimage program
and the continued opening of higher than average volume restaurants. Sales from
restaurants opened after March 29, 1998 accounted for an increase of $2.5
million. This increase was offset by sales from restaurants which were closed
after March 29, 1998 of $626,000.
Restaurant Cost of Sales. Restaurant cost of sales, calculated as a percentage
of restaurant sales, decreased to 29.7% in the first quarter of 1999 from 30.3%
for the first quarter of 1998. The decrease was due primarily to a price
increase of approximately 2% taken in December 1998 and continued improvements
in the management of food costs through utilizing increased controls and
improved purchasing programs. The Company recently completed negotiation of
favorable fajita meat and cheese purchase contracts. Management expects the
favorable cost of sales trends to continue during 1999.
Labor. Labor costs calculated as a percentage of restaurant sales increased to
27.5% during the first quarter of 1999 from 26.8% for the same period in 1998.
The increase in labor costs is due to management's continued commitment to
increase staffing levels at the restaurant level in order to provide a
consistent guest experience as well as higher than normal labor costs at newer
restaurants. New restaurants generally have higher than normal labor costs for
the first four to six months of operations. Management expects labor costs as a
percentage of sales to be flat to slightly up during all of 1999.
Occupancy. Occupancy costs increased by $103,000 during the first quarter of
1999 compared to the first quarter of 1998. The increase is primarily due to
the opening of new restaurants. As a percentage of restaurant sales, occupancy
costs decreased to 5.5% in the first quarter of 1999 compared to 5.9% in the
first quarter of 1998. Management expects the dollar amount to increase in 1999
due to new openings, although it should continue to show improvement as a
percentage of sales.
Other Restaurant Operating Costs. Other restaurant operating costs increased to
$6.3 million in the first quarter of 1999 compared to $6.0 million in the first
quarter of 1998. As a percentage of restaurant sales, other restaurant operating
costs decreased to 17.0% for the first quarter of 1999 compared to 18.6% for the
first quarter of 1998. The decrease is due to the leverage from higher average
sales as the dollar amount of other operating costs per store open remained
relatively flat. Management expects this amount, as a percentage of sales, to
be slightly lower during the remainder of 1999.
10
General and Administrative. General and administrative expenses increased to
$2.1 million for the first quarter of 1999 from $1.9 million in the comparable
period of 1998. As a percentage of sales, general and administrative expenses
decreased to 5.6% for the first quarter of 1999 compared to 5.9% for the
comparable period in 1998. Management expects this amount to be flat or
increase slightly, as a dollar amount, but continue to decrease as a percentage
of sales during 1999.
Depreciation, Amortization and Restaurant Opening Costs. Depreciation,
amortization and restaurant opening costs consisted of the following:
Thirteen Weeks Ended
----------------------
March 29, 1998 April 4, 1999
-------------- -------------
(Unaudited) (Unaudited)
Depreciation of property and
equipment .......................$ 1,531,000 $ 1,911,000
Amortization of intangible
assets .......................... 137,000 146,000
Restaurant opening costs ........ 200,000 172,000
Depreciation expense increased by approximately $380,000 for the quarter ended
April 4, 1999 compared to the quarter ended March 29, 1998. The increase was
due to the addition of new restaurants since March 28, 1999, which accounted for
$125,000 of the increase, as well as continued capital improvements to existing
restaurants.
Interest Expense, net. Interest expense, net of interest capitalized on
construction costs, increased to $552,000 in the first quarter of 1999 from
$397,000 in the first quarter of 1998, primarily as a result of additional
borrowings under the Company's debt facilities, offset by a lower borrowing
rate. In addition, the Company capitalized $62,000 of interest related to new
restaurant construction in the most recent quarter compared to $52,000 during
the first quarter of 1998.
Income Taxes. Income tax expense was zero for the first quarter of 1999 and
1998 due to the recognition of previously reserved deferred tax assets.
Net Income and Earnings Per Share. Net income increased to $2,764,000 for the
first quarter of 1999 from $1,857,000 for the same period in 1998. Net income
was 7.5% of total revenues for the first quarter in 1999 compared to 5.7% in the
first quarter of 1998. Diluted earnings per share was $0.20 for the first
quarter of 1999 compared to $0.12 in the same period of 1998. The increase in
net income recorded during the first quarter of fiscal 1999 compared to the same
quarter last year is due to higher sales at existing restaurants, the opening of
nine new restaurants during 1998 and continued strong cost controls.
Year 2000 Issue
Description. The Company relies to a large extent on computer technology to
carry out its day-to-day operations. Many software products in the marketplace
are only able to recognize a two digit year date and therefore will recognize a
date using "00" as the year 1900 instead of the year 2000 (the "Year 2000
Issue"). This problem could result in a system failure or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions or engage in similar normal business
activities.
11
State Of Readiness. The Company has established a plan to prepare its systems
for the Year 2000 Issue as well as to reasonably assure that its critical
business partners are prepared. To date, the Company has completed its
assessment of all internal systems that could be significantly affected by the
Year 2000 Issue. Based upon its assessment, the Company determined that it was
required to modify or replace portions of its software supporting Human
Resources, Payroll, Accounting, Labor Analysis and the Point of Sale. The
Company believes that with modifications or replacements of the identified
software programs, the Year 2000 Issue can be mitigated. However, if all
additional phases of the Year 2000 plan are not completed on time, the Year 2000
Issue could have a material impact on the operations of the Company.
As of May 3, 1999, the Company has substantially completed the remediation of
the identified systems and expects to complete software reprogramming and
replacement no later than October 1, 1999. Systems continue to be tested for
integration with all significant systems scheduled to be completed by June 30,
1999. Many hardware upgrades were made as part of the Company's continued
efforts to upgrade its technology, but no further hardware replacement has been
identified as a result of the Year 2000 Issue. As such, the Company is not
currently remediating additional hardware. However, the existence of embedded
technology is by nature more difficult to identify. While the Company believes
that all significant systems are Year 2000 compliant, the Company plans to
continue testing its operating equipment.
The Company has deferred other information technology projects due to the Year
2000 Issue. The deferral of these projects is not expected to have a material
effect on the Company's financial position or results of operations.
Significant Third Parties. The Company's significant third party business
partners consist of suppliers, banks, and service providers. The Company has
significant system interfaces with banks, credit card processors and tax filing
services. An initial inventory of significant third party business partners has
been completed and letters mailed requesting information regarding each parties'
Year 2000 compliance status. Additionally, the Company has identified key
suppliers and distributors which it intends to meet with and discuss their Year
2000 readiness. The Company is currently developing contingency plans for third
party business partners that appear to have substantial Year 2000 operational
risks, which may include the change of some suppliers to minimize such risks.
12
Costs. The Company will use both internal and external resources to reprogram,
or replace, and test software for Year 2000 Issue modifications. The total cost
of the Year 2000 Issue project is estimated to be approximately $600,000, of
which the Company has incurred $500,000 relating to the purchase of new
software. The costs relating to the Year 2000 Issue are being financed through
operating cash flows and borrowings from the Company's available credit
facilities. Of the total project cost, the majority is attributable to the
purchase of new software, which will be capitalized. The remaining amount,
which will be expensed as incurred over the next year, is not expected to have a
material effect on the results of operations. To date, the costs the Company
has incurred and expensed relating to the assessment of, and preliminary efforts
in connection with, its Year 2000 Issue and the development of a remediation
plan have not had a material effect on the results of operations.
Risks And Contingency Plans. Management believes it has an effective plan in
place to resolve the Year 2000 Issue in a timely manner. However, due to the
forward-looking nature and lack of historical experience with Year 2000 Issues,
it is difficult to predict with certainty what will happen after December 31,
1999. Despite the Year 2000 remediation efforts being made, it is likely that
there will be disruptions and unexpected business problems during the early
months of 2000. The Company plans to make diligent efforts to assess the Year
2000 readiness of its significant business partners and will develop contingency
plans for all critical systems where it believes its exposure to Year 2000 risk
is the greatest. However, despite the Company's efforts, it may encounter
unanticipated third party failures, public infrastructure failures or a failure
to successfully conclude its remediation efforts as planned. If the remaining
Year 2000 plan is not completed timely, in addition to the implications noted
above, the Company may be required to utilize manual processing of certain
otherwise automated processes. Any one of these unforeseen events could have a
material adverse impact on the Company's results of operations, financial
condition, or cash flows in 1999 and beyond.
Liquidity and Capital Resources
Historically, the Company has financed business and expansion activities by
using funds generated from operating activities, build-to-suit leases, equity
financing, short and long-term debt and capital leases. The Company maintains
credit facilities totaling $40.0 million, including a $5.0 million unsecured
revolving line of credit. As of May 3, 1999, $32.4 million had been used under
these commitments.
Net cash provided by operating activities was $4.1 million for the thirteen
weeks ended April 4, 1999, and $1.8 million for the thirteen weeks ended March
29, 1998. Management attributes much of the increase to higher net income and
less cash being utilized in the reduction of accrued, acquisition and store
closure liabilities.
Net cash used in investing activities was $5.5 million for the thirteen weeks
ended April 4, 1999, representing primarily capital expenditures of $6.0 million
for the construction of new restaurants and improvements to existing
restaurants. This was offset by the sale of assets generating $459,000 in
proceeds. This compares to $3.8 million in net cash used in investing activities
for the thirteen weeks ended March 29, 1998, representing primarily capital
expenditures for the construction of new restaurants and improvements to
existing restaurants, offset by the sale of assets generating $1.3 million in
proceeds.
13
Net cash provided by financing activities was $1.6 million for the thirteen
weeks ended April 4, 1999, and $2.0 million for the thirteen weeks ended March
29, 1998, representing primarily net borrowings under the Company's debt
facilities.
The special charges recorded in 1997 and 1995 included accruals of approximately
$10.2 million to record the estimated monthly lease payments, net of expected
sublease receipts, associated with certain restaurants which have been closed.
Cash requirements for this accrual were approximately $182,000 during the first
quarter of 1999. During the first quarter of 1999, the Company sold one
property relating to the special charges which resulted in proceeds of $459,000,
and approximated the carrying value of the assets sold. The Company currently
has two closed restaurant properties for sale which were covered by the special
charges. Although there can be no assurance of the particular price at which
such properties will be sold, the Company expects to receive funds equal to or
in excess of the carrying value upon the actual disposition of these properties.
In addition, certain acquisition and accrued liabilities related to the Two
Pesos acquisition were reduced by payments of approximately $72,000 during the
first quarter of 1999.
The Company believes that existing cash balances, funds generated from
operations, its ability to borrow, and the possible use of lease financing will
be sufficient to meet the Company's capital requirements through 1999, including
the planned opening of ten restaurants and the reimaging of 30 to 35
restaurants. Total capital expenditures related to new restaurants are
estimated to be $12.0 to $15.0 million. The total for other capital
expenditures, including the cost of the reimagings, is estimated to be $6.0 to
$8.0 million. Total capital expenditures for 1999 are expected to approximate
$18.0 to $23.0 million.
Impact of Inflation
Although increases in labor, food or other operating costs could adversely
affect the Company's operations, management does not believe that inflation has
had a material adverse effect on the Company's operations to date.
Seasonality and Quarterly Results
The Company's sales fluctuate seasonally. Historically, the Company's highest
sales and earnings occur in the second and third quarters. In addition,
quarterly results are affected by the timing of the opening and closing of
stores. Therefore, quarterly results cannot be used to indicate the results for
the entire year.
14
Forward-Looking Statements
Statements in this quarterly report, including those contained in the foregoing
discussion and other items herein concerning the Company which are (a)
projections of revenues, costs, capital expenditures or other financial items,
(b) statements of plans and objectives for future operations, (c) statements of
future economic performance, or (d) statements of assumptions or estimates
underlying or supporting the foregoing are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Act of 1934. The ultimate accuracy of forward-looking statements is
subject to a wide range of business risks and changes in circumstances, and
actual results and outcomes often differ from expectations. Any number of
important factors could cause actual results to differ materially from those in
the forward-looking statements herein, including the following: the timing and
extent of changes in prices; actions of our customers and competitors; state and
federal environmental, economic, safety and other policies and regulations, any
changes therein, and any legal or regulatory delays or other factors beyond the
Company's control; execution of planned capital projects; weather conditions
affecting the Company's operations or the areas in which the Company's products
are marketed; natural disasters affecting operations; and adverse rulings,
judgments, or settlements in litigations or other legal matters. The Company
undertakes no obligation to publicly release the result of any revisions to any
such forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company has filed the following exhibits with this report:
27. Financial Data Schedules
No reports on Form 8-K were filed during the period covered by this report.
15
Signature
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.
Dated: May 18, 1999 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
16
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-2-2000
<PERIOD-END> APR-4-1999
<CASH> 897,000
<SECURITIES> 0
<RECEIVABLES> 739,000
<ALLOWANCES> 105,000
<INVENTORY> 2,311,000
<CURRENT-ASSETS> 7,031,000
<PP&E> 110,439,000
<DEPRECIATION> 34,476,000
<TOTAL-ASSETS> 94,104,000
<CURRENT-LIABILITIES> 15,099,000
<BONDS> 0
0
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<COMMON> 134,000
<OTHER-SE> 43,603,000
<TOTAL-LIABILITY-AND-EQUITY> 94,104,000
<SALES> 36,836,000
<TOTAL-REVENUES> 36,910,000
<CGS> 10,927,000
<TOTAL-COSTS> 27,305,000
<OTHER-EXPENSES> 6,289,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 552,000
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<EPS-PRIMARY> .21
<EPS-DILUTED> .20
</TABLE>
