<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 14, 1998 Commission File No. 33-61232
LA PETITE ACADEMY, INC.
Formerly known as La Petite Holdings Corp.
(exact name of registrant as specified in its charter)
Delaware 43-1243221
(state or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
8717 WEST 110TH STREET, SUITE 300
OVERLAND PARK, KANSAS 66210
(address of principal executive office and zip code)
(913) 345-1250
(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.
(1) Yes X No (2) Yes X No
--- --- --- ---
As of April 24, 1998, La Petite Academy, Inc. had 100 shares of common stock
outstanding.
<PAGE> 2
LA PETITE ACADEMY, INC.
INDEX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS (UNAUDITED): PAGE
----
<S> <C>
Consolidated Balance Sheets 1
Consolidated Statements of Income 2
Consolidated Statements of Cash Flows 3
Notes to Consolidated Financial Statements 4-6
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 7-8
PART II. OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS 9
ITEM 2.CHANGES IN SECURITIES 9
ITEM 3.DEFAULTS UPON SENIOR SECURITIES 9
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 9
ITEM 5.OTHER INFORMATION 9
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K 9
SIGNATURE 10
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
LA PETITE ACADEMY, INC.
CONSOLIDATED BALANCE SHEETS
28 WEEKS ENDED MARCH 14, 1998
(In thousands of dollars, except per share data)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS MARCH 14, AUGUST 30,
1998 1997
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 24,755 $ 23,971
Restricted cash investments 2,778 2,312
Accounts and notes receivable, net 4,699 5,068
Prepaid food and supplies 5,506 5,954
Other prepaid expenses 3,605 3,645
Refundable income taxes 374 559
Current deferred income taxes 1,350 1,024
-------- --------
Total current assets 43,067 42,533
Property and equipment, at cost:
Land 7,008 6,927
Buildings and leasehold improvements 67,373 64,811
Equipment 25,740 22,529
Facilities under construction 1,251 317
-------- --------
101,372 94,584
Less accumulated depreciation and amortization 40,533 33,460
-------- --------
Net property and equipment 60,839 61,124
Other assets (Note 3) 62,104 64,187
Deferred income taxes 4,469 3,408
-------- --------
$170,479 $171,252
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Overdrafts due bank $1,950 $2,356
Accounts payable 5,632 6,224
Current reserve for closed academies 1,623 1,860
Accrued salaries, wages and other payroll costs 10,830 10,717
Accrued insurance liabilities 3,990 4,156
Accrued property, sales and use tax 2,779 4,128
Accrued interest payable 970 719
Other accrued liabilities 4,260 4,883
-------- --------
Total current liabilities 32,034 35,043
Long-term debt and capital lease obligations (Note 4) 87,345 85,903
Other long-term liabilities (Note 5) 13,874 14,319
Commitments and contingencies (Note 6)
Redeemable preferred stock ($.01 par value per share; 2,000,000 shares authorized; 800,000
shares issued and outstanding at aggregate liquidation preference; per share liquidation
preference of $43.541 and $40.836, respectively) 34,698 32,521
Stockholder's equity:
Common stock ($.01 par value per share; 1,000 shares authorized; 100 shares issued and
outstanding)
Additional paid-in capital 14,106 16,284
Accumulated deficit (11,578) (12,818)
-------- --------
2,528 3,466
-------- --------
$170,479 $171,252
======== ========
</TABLE>
See notes to consolidated financial statements.
-1-
<PAGE> 4
LA PETITE ACADEMY, INC.
CONSOLIDATED STATEMENTS OF INCOME
28 WEEKS ENDED MARCH 14, 1998
(IN THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
12 WEEKS ENDED 28 WEEKS ENDED
------------------------------ -------------------------------
MARCH 14, MARCH 15, MARCH 14, MARCH 15,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Operating revenue $70,811 $67,730 $166,701 $159,983
Operating expenses:
Salaries, wages and benefits 37,384 36,558 87,772 84,077
Facility lease expense 9,129 8,934 21,328 21,143
Depreciation 3,073 3,190 7,073 7,444
Amortization of goodwill
and other intangibles 516 516 1,204 1,204
Other 17,325 16,207 41,933 40,299
-------- -------- -------- --------
67,427 65,405 159,310 154,167
-------- -------- -------- --------
Operating income 3,384 2,325 7,391 5,816
-------- -------- -------- --------
Interest expense 2,068 2,142 4,917 4,994
Interest income (266) (186) (601) (493)
-------- -------- -------- --------
Net interest costs 1,802 1,956 4,316 4,501
-------- -------- -------- --------
Income before income taxes 1,582 369 3,075 1,315
Provision for income taxes 846 364 1,835 1,051
-------- -------- -------- --------
Net income $ 736 $ 5 $ 1,240 $ 264
======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements.
-2-
<PAGE> 5
LA PETITE ACADEMY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
28 WEEKS ENDED MARCH 14, 1998
(IN THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
28 WEEKS ENDED
-------------------------------
MARCH 14, MARCH 15,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,240 $ 264
Adjustments to reconcile net income to net cash from operating
activities:
Depreciation and amortization 8,731 9,109
Deferred income taxes (1,387) (2,198)
Changes in current assets and liabilities:
Accounts and notes receivable 373 (628)
Prepaid expenses and supplies 488 (130)
Accrued property, sales and use taxes (1,349) (1,115)
Accrued interest payable 251 301
Other changes in assets and liabilities, net (2,026) (2,864)
-------- ---------
Net cash from operating activities 6,321 2,739
-------- ---------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Capital expenditures (4,776) (3,061)
Proceeds from sale of assets 339 88
-------- ---------
Net cash used for investing activities (4,437) (2,973)
-------- ---------
CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES:
Repayment of long-term debt and capital lease obligations (229) (875)
Reductions in bank overdrafts (406) (1,793)
Decrease (increase) in restricted cash investments (465) 6,530
-------- ---------
Net cash from (used for) financing activities (1,100) 3,862
-------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 784 3,628
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 23,971 12,791
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $24,755 $ 16,419
======== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $ 4,211 $ 4,232
Income taxes 1,951 4,375
Cash received during the period for:
Interest $ 665 $ 470
Income taxes 204 1,141
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Capital lease obligations of $2,399 were incurred during the 28 weeks ended
March 14, 1998, when the Company entered into leases for new computer
equipment.
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE> 6
LA PETITE ACADEMY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION AND MERGER
La Petite Holdings Corp. ("Holdings") was formed in 1993 as a Delaware
corporation for the purpose of holding the capital stock of La Petite
Acquisition Corp. On July 23, 1993, Holdings acquired all of the
outstanding shares of common stock, par value $.01 (the "Common Stock"), of
La Petite Academy, Inc. ("La Petite"). The transaction was accounted for
as a purchase and the excess of purchase price over the net assets acquired
is being amortized over 30 years. On May 31, 1997, Holdings was merged
with and into its wholly-owned subsidiary La Petite, a Delaware
corporation, with La Petite as the surviving corporation.
On August 28, 1997, LPA Services, Inc. ("Services"), a wholly owned
subsidiary of La Petite, was incorporated. Services will provide third
party administrative services on insurance claims to La Petite. La Petite,
consolidated with Services, is referred to herein as the "Company".
On March 17, 1998, subsequent to the end of the second quarter of fiscal
year 1998, the parent company of the Company, Vestar/LPA Investment Corp.
("Parent") and LPA Investment LLC, a Delaware limited liability company
majority-owned by Chase Capital Partners ("Investor"), entered into an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which,
among other things, a wholly-owned subsidiary to be formed by Investor will
be merged (the "Merger") with and into Parent, and Parent will be the
surviving corporation (the "Surviving Corporation"). As a result of the
Merger, Investor will own approximately 90.6% of the voting securities of
the Surviving Corporation, with the remaining approximately 9.4% owned by
Company management and certain other remaining shareholders of Parent.
In accordance with the Merger Agreement, on March 27, 1998, subsequent to
the end of the second quarter of fiscal year 1998, the Company notified the
holders of record of the Company's Class A Cumulative Redeemable
Exchangeable Preferred Stock, par value $.01 per share (the "Preferred
Stock") that on May 1, 1998 La Petite will issue the Company's 12-1/8%
Subordinated Exchange Debentures due 2003 (the "Exchange Debentures") in
exchange for all outstanding shares of the Preferred Stock, at the exchange
rate of $1.00 principal amount of the Exchange Debentures for each $1.00 of
liquidation preference of the Preferred Stock. As of March 14, 1998, the
per share liquidation preference of the Preferred Stock was equal to
$43.541. The Merger Agreement also provides that the Senior Notes (see
Note 4 below), the Convertible Debentures (see Note 4 below), the Credit
Facility (see Note 3 to the Consolidated Financial Statements contained in
the Form 10-K for the fiscal year ended August 30, 1997), and the Exchange
Debentures will be redeemed, repaid, defeased, canceled or otherwise
provided for in connection with the Merger.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERIM FINANCIAL REPORTING - The consolidated financial statements
included herein have been prepared by the Company, without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is suggested
that these consolidated financial statements be read in conjunction with
the consolidated financial statements and the notes thereto included in the
Annual Report on Form 10-K for the fiscal year ended August 30, 1997.
-4-
<PAGE> 7
The Company utilizes a 52-week fiscal year ending on the last Saturday in
August composed of 13 four-week periods. The first quarter contains four
such periods or 16 weeks and each remaining quarter contains 3 periods or 12
weeks.
The information included in these interim consolidated financial statements
reflect all normal recurring adjustments which are, in the opinion of
management, necessary to fairly state the Company's financial position and
the results of its operations for the periods presented.
3. OTHER ASSETS
(in thousands of dollars)
<TABLE>
<CAPTION>
MARCH 14, AUGUST 30,
1998 1997
<S> <C> <C>
Intangible assets:
Excess purchase price over net assets acquired $64,277 $64,277
Curriculum 1,497 1,497
Workforce 3,248 3,248
Accumulated amortization (13,962) (12,714)
------- -------
55,060 56,308
Deferred financing costs 12,754 12,752
Accumulated amortization (9,240) (8,176)
Other assets 3,530 3,303
------- -------
$62,104 $64,187
======= =======
</TABLE>
4. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
(in thousands of dollars)
<TABLE>
<CAPTION>
MARCH 14, AUGUST 30,
1998 1997
<S> <C> <C>
Convertible Debentures, 6.5% payable through June
1, 2011 $ 850 $ 850
Senior Notes, 9.625% payable through August 1, 2001 85,000 85,000
Capital lease obligations 2,536 366
------- -------
88,386 86,216
Less unamortized discount (184) (191)
------- -------
88,202 86,025
Less current maturities of capital lease obligations (857) (122)
------- -------
$87,345 $85,903
======= =======
</TABLE>
5. OTHER LONG-TERM LIABILITIES
(in thousands of dollars)
<TABLE>
<CAPTION>
MARCH 14, AUGUST 30,
1998 1997
<S> <C> <C>
Unfavorable leases, net of accumulated amortization $ 5,419 $ 6,085
Non-current reserve for closed Academies 4,919 5,609
Long-term insurance liabilities 3,536 2,625
------- -------
$13,874 $14,319
======= =======
</TABLE>
-5-
<PAGE> 8
6. COMMITMENTS AND CONTINGENCIES
The Company has litigation pending which arose in the ordinary course of
business. Litigation is subject to many uncertainties and the outcome of
the individual matters is not presently determinable. It is management's
opinion that this litigation will not result in liabilities that would
have a material adverse effect on the Company's financial position or
results of operations.
******
-6-
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS
The Company's operating results for the 12 and 28 weeks ended March 14, 1998
are consistent and comparable with the 12 and 28 weeks ended March 15, 1997.
Historically, the Company's operating revenue has followed the seasonality of
the school year. The number of new children attending the Academies is highest
in September-October and January-February, generally referred to as the Fall
and Winter enrollment periods. Revenues tend to decline during the calendar
year-end holiday period and during the Summer. As a result of this
seasonality, results for one quarter are not necessarily indicative of results
for an entire year.
Nine Academies in operation at the end of the second quarter of fiscal year
1997 were closed prior to the end of the second quarter of fiscal year 1998.
Two new Academies were opened during this same period. As a result, the
Company operated 744 Academies at the end of the second quarter of fiscal year
1998, seven less than at the end of the same quarter of fiscal year 1997. The
closures resulted from management decisions to not renew the leases of certain
Academies at lease expiration.
Operating revenue increased 4.5% during the 12 weeks and 4.2% during the 28
weeks ended March 14, 1998. Excluding closed Academies from both years,
operating revenue increased 5.4% during the 12 weeks and 5.1% during the 28
weeks, full time equivalent ("FTE") attendance grew 1.1% during the 12 weeks
and 0.5% during the 28 weeks and average weekly FTE tuition increased 4.3%
during the 12 weeks and 4.6% during the 28 weeks. The increase in average
weekly FTE tuition was principally due to selective price increases which were
put into place in the second quarter of fiscal year 1998, based on geographic
market conditions and class capacity utilization.
Salaries, wages, and benefits increased $0.8 million or 2.3% during the 12
weeks and $3.7 million or 4.4% during the 28 weeks ended March 14, 1998 as
compared to the same periods of fiscal year 1997. The increase was principally
due to increased average hourly wage rates as staff hours worked were
relatively stable. As a percentage of revenue, labor costs were 52.7% for the
28 weeks ended March 14, 1998 as compared to 52.6% during the same period of
fiscal year 1997.
Many of the Company s operating costs are relatively fixed and do not decline
or increase directly with small changes in attendance. Facility lease expense,
depreciation, amortization, and other operating costs all declined or remained
unchanged as a percentage of revenue during the 28 weeks ended March 14, 1998
as compared to the same period of fiscal year 1997. In September 1997, the
Company held a special conference to which all Academy Directors were invited
at which the Company articulated its future business strategy for the growth of
the Company. Total operating expenses for the 28 weeks ended March 14, 1998
include $0.6 million related to this conference.
Interest expense for the 28 weeks ended March 14, 1998 decreased $0.1 million
or 1.5% from the same period of fiscal year 1997
After adding back to pre-tax income the nondeductible goodwill amortization and
other permanent differences, the effective income tax rate for the 12 and 28
weeks ended March 14, 1998 was approximately 40 %, unchanged from the same
periods of fiscal year 1997. State income taxes accounted for the other
difference between the effective and statutory Federal rate.
As a result of the foregoing, operating income was $3.4 million for the 12
weeks ended March 14, 1998, up $1.1 million or 45.5% from the same period of
fiscal year 1997. Operating income for the 28 weeks
-7-
<PAGE> 10
ended March 14, 1998, was $7.4 million, up $1.6 million or 27.1% from the same
period of fiscal year 1997. Earnings before interest, taxes, depreciation and
amortization (EBITDA) was $7.0 million for the 12 weeks ended March 14, 1998 as
compared to $6.0 million for the same period of fiscal year 1997, an increase of
15.6%. EBITDA for the 28 weeks ended March 14, 1998, was $15.7 million as
compared to $14.5 million for the same period of fiscal year 1997, an increase
of 8.3%.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operating activities were $6.3 million through the second
quarter of fiscal year 1998 compared to cash flows of $2.7 million during the
same period of fiscal year 1997. The increase in cash flows from operations of
$3.6 million came principally from a $1.0 million increase of net income, a
$1.5 million reduction in net income tax payments and a $1.1 million reduction
in working capital requirements and other items.
Cash flows used for investing activities were $4.4 million through the second
quarter of fiscal year 1998 compared to $3.0 million during the same period of
fiscal year 1997. The increase in cash flows used for investing activities of
$1.4 million was principally due to a $1.3 million increase in capital
expenditures for new academies, a $0.4 million increase in leasehold
improvements and other equipment, offset by a $0.3 million increase in proceeds
from sale of assets.
Cash flows used for financing activities were $1.1 million through the second
quarter of fiscal year 1998 compared to cash flows from financing of $3.9
million during the same period of fiscal year 1997. The $5.0 million decrease
in cash flow from financing activities was principally due to the prior year
$7.0 million reduction of restricted cash requirements, offset by a reduction
in bank overdrafts of $1.4 million and reduction of debt payments of $0.6
million. Restricted cash investments represent cash deposited in escrow
accounts as collateral for the self-insured portion of the Company's workers'
compensation and automobile insurance coverage. During fiscal year 1997, a $5.0
million Letter of Credit was issued in exchange for a return of restricted cash
in the same amount. In addition, $2.5 million dollars was returned as a
reduction of collateral requirements less increases of $0.5 million for funding
requirements.
The Senior Notes, Preferred Stock and the Credit Agreement (see Notes to the
Consolidated Financial Statements contained in the Form 10-K for the fiscal
year ended August 30, 1997) contain certain covenants that, among other things,
set a maximum on the Company s leverage ratio. As of March 14, 1998, the
Company was in compliance with all of its debt covenants.
In accordance with the Merger Agreement, on March 27, 1998, subsequent to the
end of the second quarter of fiscal year 1998, the Company notified the holders
of record of the Company's Preferred Stock that on May 1, 1998 it will issue
the Company's Exchange Debentures in exchange for all outstanding shares of the
Preferred Stock, at the exchange rate of $1.00 principal amount of the Exchange
Debentures for each $1.00 of liquidation preference of the Preferred Stock. As
of March 14, 1998, the per share liquidation preference of the Preferred Stock
was equal to $43.541. The Merger Agreement also provides that the Senior
Notes, the Convertible Debentures, the Credit Facility, and the Exchange
Debentures will be redeemed, repaid, defeased, canceled or otherwise provided
for in connection with the merger.
INFLATION AND GENERAL ECONOMIC CONDITIONS
The Company has historically been able to increase tuition to offset increases
in its costs. During the past two years, a period of low to moderate
inflation, the Company implemented selective increases in tuition rates, based
on geographic market conditions and class capacity utilization. The Company did
not experience a material decline in attendance as a result of these increases.
-8-
<PAGE> 11
PART II - OTHER INFORMATION
- --------------------------------------------------------------------------------
ITEM 1. LEGAL PROCEEDINGS.
The Company has litigation pending which arose in the ordinary course of
business. In management s opinion, none of such litigation in which the
Company is currently involved will result in liabilities that will have a
material adverse effect on its financial condition or results of operations.
ITEM 2. CHANGES IN SECURITIES.
On March 27, 1998, subsequent to the end of the second quarter of fiscal year
1998, the Company notified the holders of record of the company's Preferred
Stock that on May 1, 1998 it will issue the Company's Exchange Debentures in
exchange for all outstanding shares of the Preferred Stock, at the exchange
rate of $1.00 principal amount of the Exchange Debentures for each $1.00 of
liquidation preference of the Preferred Stock. As of March 14, 1998, the per
share liquidation preference of the Preferred Stock was equal to $43.541.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 5. OTHER INFORMATION.
On March 17, 1998, subsequent to the end of the second quarter of fiscal year
1998, Parent and Investor entered into the Merger Agreement, pursuant to which,
among other things, a wholly-owned subsidiary to be formed by Investor will be
merged with and into Parent, and Parent will be the Surviving Corporation. As
a result of the Merger, Investor will own approximately 90.6% of the voting
securities of the Surviving Corporation, with the remaining approximately 9.4%
owned by Company management and certain other remaining shareholders of Parent.
The Merger Agreement also provides that the Senior Notes, the Convertible
Debentures, the Credit Facility, and the Exchange Debentures will be redeemed,
repaid, defeased, canceled or otherwise provided for in connection with the
Merger.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits required by Item 601 of Regulation S-K:
Exhibit 27 - Financial Data Schedule
b. Reports on Form 8-K:
Item 5 reporting the March 19, 1998 announcement by Vestar Capital Partners
that it had entered into an Agreement and Plan of Merger with an affiliate
of Chase Capital Partners, and (ii) the March 27, 1998 announcement by the
Company that on May 1, 1998 it would issue its Exchange Debentures in
exchange for all outstanding Preferred Stock.
-9-
<PAGE> 12
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.
LA PETITE ACADEMY, INC.
Dated: April 24, 1998
/s/ Phillip M. Kane
-----------------------------------------------
By: Phillip M. Kane
Senior Vice-President, Chief Financial Officer
and duly authorized representative of the
registrant
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
CONSOLIDATED BALANCE SHEET AS OF MARCH 14, 1998 AND THE CONSOLIDATED STATEMENT
OF INCOME FOR THE 28 WEEKS ENDED MARCH 14, 1998. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH (B) CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> AUG-29-1998
<PERIOD-END> MAR-14-1998
<CASH> 24755
<SECURITIES> 0
<RECEIVABLES> 4699
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 43067
<PP&E> 101372
<DEPRECIATION> 40533
<TOTAL-ASSETS> 170479
<CURRENT-LIABILITIES> 32034
<BONDS> 87345
0
34698
<COMMON> 0
<OTHER-SE> 2528
<TOTAL-LIABILITY-AND-EQUITY> 170479
<SALES> 0
<TOTAL-REVENUES> 166701
<CGS> 0
<TOTAL-COSTS> 159310
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4917
<INCOME-PRETAX> 3075
<INCOME-TAX> 1835
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1240
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
