SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 28,1998
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 No. 0-23226
GRILL CONCEPTS, INC.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 13-3319172
- ---------------------------- -------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
11661 San Vicente Blvd., Suite 404, Los Angeles, California 90049
-----------------------------------------------------------------
(Address of principal executive offices)
(310) 820-5559
-------------------------
(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
---- ---
As of August 3,1998, 16,015,553 shares of Common Stock of the issuer were
outstanding.
<PAGE>
GRILL CONCEPTS, INC.
--------------------
INDEX
Page
Number
--------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
June 28, 1998 and December 28, 1997................ 1
Consolidated Condensed Statements of Operations -
For the six months ended June 28, 1998 and
June 29, 1997...................................... 3
Consolidated Condensed Statements of Cash Flows -
For the six months ended June 28, 1998 and
June 29, 1997...................................... 4
Notes to Consolidated Condensed Financial Statements. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 7
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders..... 9
Item 6. Exhibits and Reports on Form 8-K........................ 10
SIGNATURES........................................................ 10
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GRILL CONCEPTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS
June 28, December 28,
1998 1997
---------------- -------------
Current assets:
Cash and cash equivalents $173,194 $272,567
Inventories 349,271 302,631
Receivables 340,327 375,117
Prepaid 1,167,830 955,329
expenses
------------- --------------
Total current assets 2,030,622 1,905,644
------------- --------------
Property and equipment, at cost 12,252,277 10,340,678
Less: accumulated depreciation (4,798,188) (4,277,546)
------------- --------------
Property and equipment, net 7,454,089 6,063,132
------------- --------------
Goodwill 233,634 237,636
Liquor licenses 613,686 613,686
Other assets 366,697 190,757
------------- --------------
Total assets $10,698,728 $9,010,855
============= ==============
The accompanying notes are an integral part of these consolidated
condensed financial statements.
1
<PAGE>
GRILL CONCEPTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
June 28, December 28,
1998 1997
----------------- ----------------
<S> <C> <C>
Current liabilities:
Bank line of credit $1,000,000 $480,000
Accounts payable 1,335,452 1,359,529
Accrued expenses 981,447 858,050
Current portion of long term debt 354,300 346,208
Note payable - related party 84,500 84,500
----------------- ----------------
Total current liabilities 3,755,699 3,128,287
Long-term debt, net of current 1,315,083 699,364
----------------- ----------------
Total liabilities 5,070,782 3,827,651
----------------- ----------------
Minority interest 267,697 --
----------------- ----------------
Stockholders' equity:
Series B, Convertible Preferred Stock, $.001 par value, authorized
1,000,000 shares; shares issued and outstanding: 0 in 1998, 32
in 1997. -- 1
Series I, Convertible Preferred Stock,$.001 par value, authorized
1,000,000 shares, shares issued and outstanding: 1000 shares in
1998 and 1997 1 1
Series II, Convertible Preferred Stock, $.001 par value, authorized
1,000,000 shares, shares issued and outstanding: 500 shares in
1998 and 1997 1 1
Common stock, $.00001 par value: 30,000,000 shares authorized,
shares issued and outstanding: 16,015,553 in 1998 and
15,672,481 in 1997 160 157
Additional paid-in capital 11,053,913 11,053,913
Accumulated deficit (5,693,826) (5,870,869)
----------------- ----------------
Stockholders' equity 5,360,249 5,183,204
----------------- ----------------
Total liabilities and stockholders' equity $10,698,728 $9,010,855
----------------- ----------------
----------------- ----------------
</TABLE>
The accompanying notes are an integral part of these consolidated
condensed financial statements
2
<PAGE>
GRILL CONCEPTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
Three Months Ended Six Months Ended
--------------------------------- ----------------------------------
June 28, 1998 June 29, 1997 June 28, June 29,
1998 1997
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Sales $8,378,563 $7,306,781 $16,739,804 $14,447,501
Management fees 71,715 -- 71,715 --
-------------- --------------- -------------- ---------------
Total revenues 8,450,280 7,306,781 16,811,519 14,447,501
Cost of sales 2,322,926 1,987,026 4,525,977 3,943,243
-------------- --------------- -------------- ---------------
Gross profit 6,127,352 5,319,755 12,285,542 10,504,258
-------------- --------------- -------------- ---------------
Costs and expenses:
Restaurant operating expenses 5,167,635 4,535,844 10,213,003 8,876,711
General and administrative 620,005 539,641 1,242,599 1,063,124
Depreciation and amortization 277,370 224,978 520,640 424,656
Amortization of preopening expenses 31,500 85,300 77,100 135,600
-------------- --------------- -------------- ---------------
Total operating expenses 6,096,510 5,385,763 12,053,342 10,500,091
-------------- --------------- -------------- ---------------
Income (loss) from operations 30,842 (66,008) 232,200 4,167
Non-recurring credit 43,714 93,000
Interest expense, net (45,642) (29,567) (84,760) (73,614)
-------------- --------------- ---------------
--------------
Income (loss) before taxes on income
and minority interest (14,800) (51,861) 147,440 23,553
Provision for taxes on income (1,200) -- (2,400) (800)
Minority interest 32,003 -- 32,003 --
-------------- --------------- -------------- ---------------
Net income (loss) 16,003 ($51,861) 177,043 $22,753
-------------- --------------- -------------- ---------------
Preferred stock:
Dividends accrued (12,222) (417) (34,550) (417)
Accounting deemed dividends (40,744) (126,389) (82,877) (126,389)
-------------- --------------- -------------- ---------------
(52,966) (126,806) (117,427) (126,806)
-------------- --------------- -------------- ---------------
Net income (loss)applicable to ($36,963) ($178,667) $59,616 ($104,053)
common stock
============== =============== ============== ===============
Net income (loss) per share
Basic net income (loss) $0.00 ($0.00) $0.01 $0.00
-------------- --------------- -------------- ---------------
Preferred stock
Dividends ($0.00) ($0.00) ($0.00) ($0.00)
Accounting deemed dividends ($0.00) ($0.01) ($0.01) ($0.01)
-------------- --------------- -------------- ---------------
($0.00) ($0.01) ($0.01) ($0.01)
-------------- --------------- -------------- ---------------
Net loss applicable to common stocks ($0.00) ($0.01) ($0.00) ($0.01)
============== =============== ============== ===============
Average weighted shares outstanding 15,802,514 14,708,761 15,753,658 14,518,749
============== =============== ============== ===============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE>
GRILL CONCEPTS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
Six Months Ended
-------------------------------
June 28, June 29,
1998 1997
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $177,043 $22,753
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 597,740 560,256
Changes in operating assets and liabilities
Inventories (46,640) (60,024)
Receivables 34,790
Prepaid expenses (212,501) 80,808
Other assets (281,037) (206,510)
Accounts payable (24,077) 122,769
Accrued liabilities 123,397 123,097
------------- --------------
Net cash provided by operating activities 368,715 643,149
------------- --------------
Cash flows from investing activities:
Additions to furniture, equipment and improvements (1,911,599) (1,653,565)
------------- --------------
Net cash used in investing activities (1,911,599) (1,653,565)
------------- --------------
Cash flows from financing activities:
Proceeds from note payable 800,000 --
Proceeds from investment in L.L.C. 299,700 --
Proceeds from issue of Common and Preferred Stock -- 1,456,630
Proceeds from line of credit 520,000 --
Payments on long-term debt (176,189) (173,374)
------------- --------------
Net cash provided by financial activities 1,443,511 1,283,250
------------- --------------
Net increase (decrease) in cash and cash equivalents (99,373) 272,834
Cash and cash equivalents, beginning of period 272,567 372,317
------------- --------------
Cash and cash equivalents, end of period $173,194 $645,151
------------- --------------
------------- --------------
Supplemental cash flow information:
Cash paid during the period for:
Interest $101,850 $53,598
Income taxes 3,400 --
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
<PAGE>
GRILL CONCEPTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL PRESENTATION
The interim consolidated financial statements are prepared pursuant to the
requirements for reporting on Form 10-QSB. These financial statements have
not been audited by independent accountants. The December 28, 1997 balance
sheet data was derived from audited financial statements but does not
include all disclosures required by generally accepted accounting
principles. The interim financial statements and notes thereto should be
read in conjunction with the financial statements and notes included in the
Company's Form 10-KSB dated December 28, 1997. In the opinion of
management, these interim financial statements reflect all adjustments of a
normal recurring nature necessary for a fair statement of the results for
the interim periods presented. The current period results of operations are
not necessarily indicative of results which ultimately will be reported for
the full year ending December 27, 1998.
2. STOCKHOLDERS' EQUITY
During the quarter ended June 28, 1998, 22 shares of Series B Convertible
Preferred Stock were converted resulting in the issuance of an aggregate of
225,425 shares of common stock including 24,512 shares paid in lieu of
dividends at an average price of $.80 per share.
3. DEEMED DIVIDEND
In accordance with the position of the Securities and Exchange Commission
regarding accounting for Preferred Stock which is convertible at a discount from
market price for common stock, the Company has reflected an accounting "deemed
dividend." This accounting deemed dividend, which relates to the issuance of the
Preferred Stock, is a non-cash accounting entry for determining income (loss)
applicable to common stock and income (loss) per share.
4. MINORITY INTEREST
In connection with the building of a new restaurant, in January 1998, a
limited liability company was formed for the operation of "The Grill"
restaurant in San Jose, California, of which the Company owns 50.05%.
Construction of the restaurant has been funded by a capital contribution
from the Company of $350,350 and by a capital contribution of $299,700 and
a $800,000 loan from the other minority interest member of the limited
liability company. The consolidated condensed financial statements include
the accounts of the limited liability company.
5. NET INCOME PER SHARE
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share", was adopted in the fourth quarter of 1997 and supersedes the
Company's previous standards for computing net income per share under
Accounting Principles Board No. 15. The new standard requires dual
presentation of net income per common share and net income per common
share, assuming dilution, on the face of the income statement. Net income
per share data has been restated for 1997 in accordance with the new
standard. Dilutive net income (loss) per share is not presented since all
of the dilutive shares are antidilutive for the periods presented.
5
<PAGE>
6. COMPREHENSIVE INCOME
SFAS No. 130, "Reporting Comprehensive Income", was adopted during the
first quarter of 1998. The standard establishes guidelines for the
reporting and display of comprehensive income and its components in
financial statements. Companies are required to report total comprehensive
income for interim periods beginning first quarter of 1998. Disclosure of
comprehensive income and its components will be required beginning fiscal
year end 1998. The adoption of the new standard did not have an impact on
the Company's financial statements since the Company had no comprehensive
income components as defined in SFAS No. 130 for the periods presented.
7. FUTURE ACCOUNTING REQUIREMENTS
In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of
an Enterprise and Related Information". The standard establishes guidelines
for reporting information on operating segments in interim and annual
financial statements. The new standard will be effective for the 1998
fiscal year. Abbreviated quarterly disclosure will be required beginning
first quarter of 1999, and will include both 1999 and 1998 information. The
Company does not believe that the new standard will have a material impact
on the reporting of its segments.
Consistent with practices in the restaurant industry, the Company defers
its restaurant preopening costs and amortizes them over a twelve-month
period following the opening of the respective restaurant. In April 1998,
The American Institute of Certified Public Accountants ("AICPA") issued
Statement of Position ("SOP") 98-5 "Reporting on the Costs of Start-Up
Activities". The SOP requires entities to expense as incurred all start-up
and preopening costs that are not otherwise capitalizable as long-lived
assets. The SOP is effective for fiscal years beginning after December 15,
1998, with earlier adoption encouraged. Restatement of previously issued
financial statements is not permitted by the SOP, and entities are not
required to report the pro forma effects of the retroactive application of
the new accounting standard. The Company's adoption of the required new
accounting principal at January 1, 1999 will involve the recognition of the
cumulative effect of the change in accounting principle required by the SOP
as a one-time charge against earnings, net of any related income tax
effect, retroactive to that date. Net deferred preopening costs were
approximately $218,160 at June 30, 1998.
In June 1998, the FASB issued SFAS No 133, "Accounting for Derivative
Instruments and Hedging Activities". This Statement requires that all
derivative instruments be recorded on the balance sheet at their fair
value. Changes in the fair value of dertivatives will be recorded each
period in current earnings or other comprehensive income, depending on
whether a derivative is designated as part of a hedge transaction and, if
it is, the type of hedge transaction. The new rules will be effective the
first quarter of 2000. The Company does not believe that the new standard
will have a material impact on the Company's financial statements.
8. BANK BORROWING
In July, 1998 the Company renewed its credit facilities with a bank,
increasing its term loan to $1,500,000, payable in sixty equal monthly
installments of $25,000 beginning September 1, 1998. Interest at Bank's
Reference Rate plus 0.25% (8.75% at July 31, 1998) is payable monthly.
The previous $1,000,000 revolving line of credit was reduced to $600,000
with interest at the same rate as noted above.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion and analysis should be read in conjunction with the
Company's financial statements and notes thereto included elsewhere in this Form
10-QSB. Except for the historical information contained herein, the discussion
in this Form 10-QSB contains certain forward looking statements that involve
risks and uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. The cautionary statements made in this Form 10-QSB
should be read as being applicable to all related forward statements wherever
they appear in this Form 10-QSB. The Company's actual results could differ
materially from those discussed here. For a discussion of certain factors that
could cause actual results to be materially different, refer to the Company's
Annual Report on Form 10-KSB for the year ended December 28, 1997.
Material Changes in Results of Operations for the Six Months Ended June 28, 1998
as Compared to the Six Months Ended June 29, 1997.
The results of operations for the 26 week period ended June 28, 1998 include the
operations of eight Daily Grill restaurants; three Pizzeria Uno units; The Grill
restaurant and seven weeks operation of the San Jose Grill restaurant. The first
half of 1997 includes seven Daily Grill restaurants for the full quarter plus
the Washington, D.C. Daily Grill for sixteen weeks, three Pizzeria Uno stores
and The Grill.
The Company's sales for the six month period increased 15.9% to $16,740,000 from
$14,448,000 for the same period in 1997. The increase of $2.3 million is
primarily a result of added sales by the inclusion of the Washington, D.C. Daily
Grill, for a full six months ($1.0 million), and a sales contribution of $0.5
million from the San Jose Grill. Additionally, same store sales increased 6.0%.
Total revenues included $72,000 of management fees from a newly implemented
hotel restaurant management service.
While sales increased by 15.9% in the 1998 six month period when compared with
the similar period in 1997, cost of sales increased 14.8% and decreased as a
percentage of sales from 27.3% to 27.0%. This decrease in cost of sales as a
percentage of sales during the 1998 period is attributable principally to a new
buying program begun in late 1997 which has reduced net food costs.
As a result, gross profit increased 16.3% from $10,504,000 (72.7% of sales) in
1997 to $12,285,000 (73.4% of sales) in 1998.
Restaurant operating expenses increased 15.1% to $10,213,000 (61.0% of sales) in
1998 from $8,877,000 (61.4% of sales) in 1997. The dollar increase in restaurant
operating expenses was primarily attributable to the operation of the new
Washington, D.C. restaurant for a full six months, and the opening of the new
San Jose Grill restaurant during the 1998 period.
General and administrative expenses increased 16.9% to represent 7.4% of sales
in the 1998 six months while amounting to a similar 7.4% of sales in the 1997
period. The dollar increase in the corporate overhead category amounted to
$179,000 and resulted primarily from added corporate personnel, merit increases
and related payroll costs. Also, the office space was expanded with increased
rent during the second quarter of 1997.
Depreciation and amortization expense, excluding amortization of pre-opening
expenses, increased by $96,000 during the 1998 six month period reflecting the
operation of the Washington, D.C. and San Jose restaurants. Amortization of
preopening expenses for these new restaurants totaled $77,000 during the 1998
period. The Company had amortization of preopening expenses of $136,000 during
the similar period in 1997.
The quarter and six month operations also reflect a minority interest from the
inclusion of the results of the San Jose Grill L.L.C.
In accordance with the position of the Securities and Exchange Commission
relating to accounting for Preferred Stock which is convertible into common
stock at a discount from the market price of the common stock, the Company
reported a "deemed dividend" of approximately $83,000 during the current six
month period. Additionally, the Company reported accrued or paid dividends on
preferred stock of $35,000 during the similar period. The "deemed dividend,"
which relates to the issuance of convertible preferred stock during 1997, is a
non-cash, non-recurring accounting entry which, along with the accrued dividends
on preferred stock, is a deduction from net income in calculating income (loss)
applicable to common stock.
7
<PAGE>
Material Changes in Financial Condition, Liquidity and Capital Resources.
At June 28, 1998 the Company had negative working capital of $1.7 million and a
cash balance of $0.2 million compared to negative working capital of $1.2
million and a cash balance of $0.3 million at December 28, 1997. The change in
working capital and cash was primarily attributable to the added borrowing for
investment in the San Jose Grill and the new Daily Grill under construction in
Virginia.
The Company's need for capital resources has resulted from, and for the
foreseeable future is expected to relate primarily to, the construction of
restaurants. Historically, the Company has funded its day-to-day operations
through its operating cash flow, while funding growth through a combination of
bank borrowing, loans from stockholders/officers, the sale of Debentures, the
sale of Preferred Stock, the issuance of warrants, and loans and tenant
allowances from certain of its landlords. At June 28,1998, the Company had
existing bank borrowing of $1.6 million, a loan from a San Jose Grill L.L.C.
member of $0.8 million, an SBA loan of $0.1 million, loans from
stockholders/officers of $0.1 million and loans/advances from a landlord and
others of $0.1 million.
In July, 1998 the Company increased its bank credit availability from $1.6
million to $2.1 million.
Construction of The Grill at the San Jose Fairmont Hotel was completed and the
restaurant opened on May 13, 1998. A Daily Grill restaurant in Tyson's Corner,
Virginia is under construction and is expected to open in October, 1998. This
restaurant will be its second Washington, D.C. area Daily Grill restaurant.
The Grill at the San Jose Fairmont Hotel was built and is owned and
operated by a limited liability company of which the Company owns 50.05%.
Construction of the restaurant has been funded by a capital contribution from
the Company of $350,350 and by a capital contribution of $299,700 and a $800,000
loan from the other member of the limited liability company. Substantially all
operating cash flows from the limited liability company will be used to pay down
the $800,000 loan prior to the distribution of funds to the members. The Company
will, however, receive a management fee of 5% of sales.
The cost to build new Daily Grill restaurants is anticipated to range from $1
million to $2 million per site depending upon the location and available tenant
allowances. The Company has budgeted $1.2 million to build the Tyson's Corner
Daily Grill. Construction and opening of the Tyson's Corner Daily Grill is
expected to be funded by a combination of operating cash flow and bank
borrowing. The Company recently increased the amount available under its lines
of credit with a portion of the increased bank line expected to be used to fund
part of the Tyson's Corner Daily Grill opening.
Other than for the opening of new restaurants, management believes that the
Company has adequate resources on hand and through cash flow to sustain
operations for at least the following 12 months.
Future Accounting Requirements
In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information". The standard establishes guidelines for
reporting information on operating segments in interim and annual financial
statements. The new standard will be effective for the 1998 fiscal year.
Abbreviated quarterly disclosure will be required beginning first quarter of
1999, and will include both 1999 and 1998 information. The Company does not
believe that the new standard will have a material impact on the reporting of
its segments.
Consistent with practices in the restaurant industry, the Company defers its
restaurant preopening costs and amortizes them over a twelve-month period
following the opening of the respective restaurant. In April 1998, The American
Institute of Certified Public Accountants ("AICPA") issued Statement of Position
("SOP") 98-5 "Reporting on the Costs of Start-Up Activities". The SOP requires
entities to expense as incurred all start-up and preopening costs that are not
otherwise capitalizable as long-lived assets. The SOP is effective for fiscal
years beginning after December 15, 1998, with earlier adoption encouraged.
Restatement of previously issued financial statements is not permitted by the
SOP, and entities are not required to report the pro forma effects of the
retroactive application of the new accounting standard. The Company's adoption
of the required new accounting principal at January 1, 1999 will involve the
recognition of the cumulative effect of the change in accounting principle
required by the SOP as a one-time charge against earnings, net of any related
income tax effect, retroactive to that date. Net deferred preopening costs were
approximately $218,160 at June 30, 1998.
In June 1998, the FASB issued SFAS No 133, "Accounting for Derivative
Instruments and Hedging Activities". This Statement requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in the
fair value of dertivatives will be recorded each period in current earnings or
other comprehensive income, depending on whether a derivative is designated as
part of a hedge transaction and, if it is, the type of hedge transaction. The
new rules will be effective the first quarter of 2000. The Company does not
believe that the new standard will have a material impact on the Company's
financial statements.
8
<PAGE>
Certain Factors Affecting Future Operating Results
In addition to the opening of new restaurants during 1998, as described above,
and the various factors described in the Company's Annual Report on Form 10-KSB
for the year ended December 28, 1997, the following developments during the
first half of this year may impact future operating results.
In March 1998, the Company initiated a pilot program to provide management of
the food service operations at the San Jose Hilton Hotel, for which it receives
a performance based fee which began in May, 1998. A similar arrangement was
begun at the Burbank Hilton in Burbank, California, also in May. The
arrangements are part of a test project developed by the Company to provide
hotel restaurant management services. The program will require minimal
investment and risk. This project is still in the early stages and further
implementation will depend upon results.
The Company continues in its efforts to sell its Pizza Restaurants.
Additionally, the Company was continuing in its negotiations with CA One
Services to modify the terms of the operating agreement for the LAX Daily Grill.
There can be no assurance that the Company will be successful in opening new
restaurants in accordance with its anticipated opening schedule; that sufficient
capital resources will be available to fund scheduled restaurant openings and
start-up costs; that new restaurants can be operated profitably; that hotel
restaurant management services will produce satisfactory cash flow and operating
results to support such operations; that additional hotels will elect to retain
the Company's hotel restaurant management services; that the Pizza Restaurants
can be sold on terms satisfactory to the Company; that proceeds, if any, from
the sale of the Pizza Restaurants can be deployed in a manner so as to replace
the cash flows, revenues and operating profits from the Pizza Restaurants; or,
that the operating agreement relating to the LAX Daily Grill can, or will, be
modified on terms deemed acceptable to the Company.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) On June 12, 1998, an annual meeting of shareholders of Grill Concepts, Inc.
was held.
(b) The following directors were elected (by the vote indicated) at such
meeting:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Robert Wechsler 9,243,214 For 15,000 Against 22,089 Abstain
Robert Spivak 9,257,314 For 900 Against 22,089 Abstain
Michael Weinstock 9,258,214 For 0 Against 22,089 Abstain
Richard Shapiro 9,258,214 For 0 Against 22,089 Abstain
Charles Frank 9,258,214 For 0 Against 22,089 Abstain
Glenn Golenberg 9,243,214 For 15,000 Against 22,089 Abstain
Peter Balas 9,243,214 For 15,000 Against 22,089 Abstain
</TABLE>
(c) In addition to the election of directors as noted above, the following
matters were voted upon at such meeting:
(i) Approval of adoption of the Grill Concepts, Inc. 1998 Comprehensive
Stock Option and Award Plan (8,938,773 For, 310,797 Against, 30,653
Abstain)
(ii) Ratification of appointment of PriceWaterhouseCoopers LLP as the
Company's independent certifying accountants (9,168,077 For, 23,044
Against, 89,102 Abstain) Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GRILL CONCEPTS, INC.
Dated: August 10, 1998 By: /s/ ROBERT SPIVAK
------------------------------
Robert Spivak, President
and C.E.O
Dated: August 10, 1998 By: /s/ BEN SUMNER
------------------------------
Ben Sumner, Chief Financial
Officer and Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> DEC-27-1998
<PERIOD-START> DEC-29-1997
<PERIOD-END> JUN-28-1998
<CASH> 173,194
<SECURITIES> 0
<RECEIVABLES> 340,327
<ALLOWANCES> 0
<INVENTORY> 349,271
<CURRENT-ASSETS> 2,030,622
<PP&E> 12,252,277
<DEPRECIATION> 4,798,188
<TOTAL-ASSETS> 10,698,728
<CURRENT-LIABILITIES> 3,755,609
<BONDS> 1,315,083
0
2
<COMMON> 160
<OTHER-SE> 5,360,087
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<TOTAL-REVENUES> 16,811,519
<CGS> 4,525,977
<TOTAL-COSTS> 4,525,977
<OTHER-EXPENSES> 12,053,342
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 84,760
<INCOME-PRETAX> 147,440
<INCOME-TAX> 2,400
<INCOME-CONTINUING> 177,043
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 177,043
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
