<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000.
Commission file number 000-22150
---------
LANDRY'S SEAFOOD RESTAURANTS, INC.
----------------------------------------------------------
(Exact name of the registrant as specified in its charter)
Delaware 74-0405386
----------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1400 Post Oak Blvd., Suite 1010, Houston, Texas 77056
-------------------------------------------------------------
(Address of principal executive offices)
(713) 850-1010
---------------------------------------------------
(Registrant's telephone number)
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___
---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As of May 2, 2000 there were
24,823,125 shares of $0.01 par value
common stock outstanding.
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
PART I. FINANCIAL INFORMATION NUMBER
<S> <C> <C>
Item 1. Financial Statements............................................................................ 2
Condensed Unaudited Consolidated Balance Sheets at March 31, 2000 and December
31, 1999........................................................................................ 3
Condensed Unaudited Consolidated Statements of Income for the Three Months Ended
March 31, 2000 and March 31, 1999............................................................... 4
Condensed Unaudited Consolidated Statement of Stockholders' Equity
for the Three Months Ended March 31, 2000....................................................... 5
Condensed Unaudited Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2000 and March 31, 1999......................................................... 6
Notes to Condensed Unaudited Consolidated Financial Statements.................................. 7-9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations...................................................................................... 10-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................................................... 15
Item 2. Changes in Securities........................................................................... 15
Item 3. Defaults upon Senior Securities................................................................. 15
Item 4. Submission of Matters to a Vote of Security Holders............................................. 15
Item 5. Other Information............................................................................... 15
Item 6. Exhibits and Reports on Form 8-K................................................................ 15
Signatures................................................................................................ 16
</TABLE>
1
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying condensed unaudited consolidated financial statements have
been prepared by Landry's Seafood Restaurants, Inc. (the "Company") pursuant to
the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the Company, all adjustments (consisting only of normal
recurring entries) necessary for fair presentation of the Company's results of
operations, financial position and changes therein for the periods presented
have been included.
This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
safe harbors created thereby. Stockholders are cautioned that all forward-
looking statements involve risks and uncertainty, including without limitation,
the ability of the Company to continue its expansion strategy, changes in costs
of food, labor, employee turnover and employee benefits, the ability of the
Company to acquire prime locations at acceptable lease or purchase terms,
seasonality of results, ability to make projected capital expenditures, store
unit sales and the ability to achieve projected quarterly results, as well as
general market conditions, competition, and pricing. All statements, other than
statements of historical facts, included or incorporated by reference in this
report that address activities, events or developments that the Company expects
or anticipates will or may occur in the future, including such things as future
capital expenditures (including the amount and nature thereof), business
strategy and measures to implement such strategy, competitive strengths, goals,
expansion and growth of the Company's business and operations, plans, references
to future success as well as other statements which include words such as
"anticipate," "believe," "plan," "estimate," "expect," and "intend" and other
similar expressions constitute forward-looking statements. Although the Company
believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be inaccurate and,
therefore, there can be no assurance that the forward-looking statements
included in this report will prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by the
Company or any other person that the objectives and plans of the Company will be
achieved.
2
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 2000 1999
- -------- -------------- --------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents........................................... $ 18,932,537 $ 22,977,666
Accounts receivable--trade and other................................ 7,843,319 7,065,298
Inventory........................................................... 19,153,166 18,409,523
Other current assets................................................ 9,665,324 10,258,086
------------- -------------
Total current assets........................................... 55,594,346 58,710,573
------------- -------------
PROPERTY AND EQUIPMENT, net.............................................. 444,408,602 431,378,855
GOODWILL, net of amortization of $1,317,000 and $1,283,000, respectively. 2,673,781 2,707,988
OTHER ASSETS, net........................................................ 3,725,764 3,928,436
------------- -------------
Total assets................................................... $ 506,402,493 $ 496,725,852
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable.................................................... $ 16,961,871 $ 21,416,112
Accrued liabilities................................................. 22,313,593 19,772,136
Current portion of long-term notes and other obligations (Note 3)... 75,095,270 68,092,714
------------- -------------
Total current liabilities...................................... 114,370,734 109,280,962
LONG-TERM NOTES AND OTHER OBLIGATIONS (Note 3)........................... 35,473 60,166
DEFERRED INCOME TAXES AND OTHER LIABILITIES.............................. 11,625,826 10,036,686
------------- -------------
Total liabilities.............................................. 126,032,033 119,377,814
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value, 60,000,000 shares authorized,
24,823,125 issued and outstanding, net of treasury shares......... 248,231 248,231
Additional paid-in capital.......................................... 322,605,100 322,605,100
Retained earnings................................................... 57,517,129 54,494,707
------------- -------------
Total stockholders' equity..................................... 380,370,460 377,348,038
------------- -------------
Total liabilities and stockholders' equity..................... $ 506,402,493 $ 496,725,852
============= =============
</TABLE>
The accompanying notes are an integral part of these condensed unaudited
consolidated financial statements.
3
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
-------------------
March 31,
2000 1999
----------- ------------
REVENUES................................... $110,951,278 $101,265,669
OPERATING COSTS AND EXPENSES:
Cost of sales............................ 34,281,781 31,693,385
Restaurant labor......................... 31,683,027 30,161,439
Other restaurant operating expenses...... 26,180,366 24,330,420
Depreciation and amortization............ 6,345,776 5,242,025
General and administrative expenses...... 5,640,939 4,639,802
Pre-opening expenses..................... 952,891 1,041,412
Special charge........................... -- 3,675,000
------------ ------------
Total operating costs and expenses..... 105,084,780 100,783,483
------------ ------------
OPERATING INCOME........................... 5,866,498 482,186
OTHER (INCOME) EXPENSE:
Interest (income) expense, net........... 1,259,752 (42,122)
Other, net............................... (7,639) 160,537
------------ ------------
Total other (income) expense........... 1,252,113 118,415
------------ ------------
INCOME BEFORE INCOME TAXES................. 4,614,385 363,771
PROVISION FOR INCOME TAXES................. 1,591,963 125,729
------------ ------------
NET INCOME................................. $ 3,022,422 $ 238,042
============ ============
EARNINGS PER SHARE INFORMATION:
BASIC--
Net income per common share.............. $0.12 $0.01
Weighted average number of common shares
outstanding............................. 24,823,125 29,700,000
DILUTED--
Net income per common share.............. $0.12 $0.01
Weighted average number of common share
equivalents outstanding................. 25,000,000 29,800,000
The accompanying notes are an integral part of these condensed unaudited
consolidated financial statements.
4
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
CONDENSED UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Additional
------------ Paid-In Retained
Shares Amount Capital Earnings Total
-------------------- ------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1999....... 24,823,125 $248,231 $322,605,100 $54,494,707 $377,348,038
Net income....................... ---- ---- ---- 3,022,422 3,022,422
Balance, March 31, 2000.......... 24,823,125 $248,231 $322,605,100 $57,517,129 $380,370,460
========== ======== ============ =========== ============
</TABLE>
The accompanying notes are an integral part of these condensed unaudited
consolidated financial statements.
5
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
----------------------------
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................... $ 3,022,422 $ 238,042
Adjustments to reconcile net income to
net cash provided by operating activities--
Depreciation and amortization.. 6,345,776 5,242,025
Change in assets and liabilities-net
and other........................ (1,283,337) 1,650,568
---------- ----------
Total adjustments........... 5,062,439 6,892,593
---------- ----------
Net cash provided by operating
activities....................... 8,084,861 7,130,635
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment additions......... (19,107,853) (15,452,977)
Other assets, including goodwill......... --- (107,202)
---------- ----------
Net cash used in investing
activities....................... (19,107,853) (15,560,179)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (payments) on notes payable
and other long-term obligations......... 6,977,863 39,980,450
Net amounts from sale (repurchase) of
common stock............................ --- (9,270,621)
---------- ----------
Net cash provided by (used in)
financing activities............... 6,977,863 30,709,829
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS............................... (4,045,129) 22,280,285
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD ............................... 22,977,666 35,183,405
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,932,537 $ 57,463,690
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash payments during the period for--
Income taxes............................ $ 1,047,000 $ 139,000
Interest................................ $ 1,521,000 $ 572,000
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
6
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The consolidated financial statements included herein have been prepared by
the Company without audit, except for the consolidated balance sheet as of
December 31, 1999. The financial statements include all adjustments, consisting
of normal, recurring adjustments and accruals, which the Company considers
necessary for fair presentation of its financial position and results of
operations. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. This information is contained in the
Company's December 31, 1999, consolidated financial statements filed with the
Securities and Exchange Commission on Form 10-K.
2. Accrued Liabilities
Accrued liabilities are comprised of the following:
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
<S> <C> <C>
Payroll and related costs.................. $ 6,570,573 $ 4,145,220
Taxes, other than payroll and income taxes. 5,953,935 6,294,954
Store closings and special charges......... 1,587,882 1,705,027
Other...................................... 8,201,203 7,626,935
----------- -----------
$22,313,593 $19,772,136
=========== ===========
</TABLE>
3. Debt
The Company has a $110.0 million unsecured credit facility from a syndicate
of banks which matures in June 2000, and is available for expansion,
acquisitions, and other general corporate purposes. At March 31, 2000, the
Company had $75 million outstanding under this credit facility at an approximate
interest rate of 8.2%. Amounts outstanding under the credit facility are
classified as a current liability as the facility matures in less than one year.
The Company is currently in the process of finalizing a new three year bank
credit facility.
7
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
4. Contingencies
Class Action Litigation
-----------------------
Class action lawsuits were filed in June and July of 1999 against the
Company in the United States District Court for the Southern District of Texas,
Houston Division. These actions name the Company, all of its current executive
officers and directors, E.A. "Al" Jaksa, Jr. (a former executive officer and
director) and underwriters that participated in the Company's offering of Common
Stock in March 1998. Such lawsuits allege that the defendants violated Federal
securities laws during certain periods while individually selling the Company's
common stock. The plaintiffs in these actions seek unspecified monetary damages.
Although the ultimate outcome of this matter cannot be determined at this time,
the Company believes these claims are without merit and intends to defend these
claims vigorously.
General Litigation
------------------
The Company is subject to other legal proceedings and claims that arise in
the ordinary course of business. Management does not believe that the outcome of
any of those matters will have a material adverse effect on the Company's
financial position, results of operations or cash flows.
5. Stockholders' Equity
The costs associated with 6,422,165 shares of treasury stock, aggregating
$53,002,875, are netted into the stockholders' equity on a pro rata basis.
On April 12, 2000, the Company's Board of Directors authorized a renewal of
the Company's open market stock buy back program for $36,000,000.
On April 4, 2000, the Company declared its first quarterly dividend
of $0.025 payable to shareholders on May 3, 2000.
On February 9, 2000, the Company announced the signing of a
definitive merger agreement to acquire another restaurant company. The merger
agreement was subsequently cancelled. The costs associated with the cancelled
acquisition will be expensed in the second quarter of 2000.
8
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
A reconciliation of the amounts used to compute net income per common share
diluted is as follows:
<TABLE>
<CAPTION> Three Months Ended March 31,
----------------------------
2000 1999
---- ----
<S> <C> <C>
Net Income............................................. $ 3,022,422 $ 238,042
========== ==========
Weighted Average Common Shares Outstanding............. 24,823,125 29,700,000
Dilutive Common Stock Equivalents -- Stock Options..... 176,875 100,000
---------- ----------
Weighted Average Common and Common Equivalent
Shares Outstanding -- Diluted.......................... 25,000,000 29,800,000
========== ==========
Net Income Per Share -- Diluted........................ $ 0.12 $ 0.01
====== ======
Net Income Per Share, Before Special Charge............ $ 0.12 $ 0.09
====== ======
</TABLE>
9
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Introduction
The Company owns and operates full-service, casual dining seafood
restaurants. As of March 31, 2000, the Company operated 153 restaurants. In
addition, the Company operates three limited-menu take-out service units.
On February 9, 2000, the Company announced it had entered into a merger
agreement to acquire all of the outstanding shares of Rainforest Cafe, Inc. The
merger agreement was subsequently cancelled. The costs associated with the
cancelled acquisition merger will be expensed in the second quarter of 2000.
The Company's operations may be impacted by changes in federal and state
taxes and other federal and state governmental policies which include many
possible factors such as the level of minimum wages, the deductibility of
business and entertainment expenses, levels of disposable income and national
and regional economic growth. Increases to the federally mandated minimum wage
have increased the Company's labor costs.
The restaurant industry is intensely competitive and is affected by changes
in consumer tastes and by national, regional, and local economic conditions and
demographic trends. The performance of individual restaurants, including new
restaurants the Company may open or acquire, may be affected by factors such as
traffic patterns, demographic considerations, weather conditions, and the type,
number, and location of competing restaurants. The Company has many well-
established competitors with greater financial resources and longer histories of
operation than the Company, including competitors already established in regions
where the Company is planning to expand, as well as competitors planning to
expand in the same regions or into regions where the Company currently operates.
The Company faces significant competition from mid-priced, full-service, casual
dining restaurants offering seafood and other types and varieties of cuisine.
The Company's competitors include national, regional, and local chains as well
as local owner-operated restaurants. The Company also competes with other
restaurants and retail establishments for restaurant sites.
10
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
safe harbors created thereby. Stockholders are cautioned that all forward-
looking statements involve risks and uncertainty, including without limitation,
the ability of the Company to continue its expansion strategy, changes in costs
of food, labor, employee turnover and employee benefits, the ability of the
Company to acquire prime locations at acceptable lease or purchase terms,
seasonality of results, ability to make projected capital expenditures, store
unit sales and the ability to achieve projected quarterly results, as well as
general market conditions, competition, and pricing. All statements, other than
statements of historical facts, included or incorporated by reference in this
report that address activities, events or developments that the Company expects
or anticipates will or may occur in the future, including such things as future
capital expenditures (including the amount and nature thereof), business
strategy and measures to implement such strategy, competitive strengths, goals,
expansion and growth of the Company's business and operations, plans, references
to future success as well as other statements which include words such as
"anticipate," "believe," "plan," "estimate," "expect," and "intend" and other
similar expressions constitute forward-looking statements. Although the Company
believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be inaccurate and,
therefore, there can be no assurance that the forward-looking statements
included in this report will prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by the
Company or any other person that the objectives and plans of the Company will be
achieved.
11
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
RESULTS OF OPERATIONS
Restaurant Profitability
The following table sets forth the percentage relationship to revenues of
certain operating data for the periods indicated:
THREE MONTHS ENDED
------------------
MARCH 31,
---------
2000 1999
---- ----
Revenues................................... 100.0% 100.0%
Cost of sales.............................. 30.9 31.3
Restaurant labor........................... 28.6 29.8
Other restaurant operating expenses........ 23.6 24.0
----- -----
Restaurant level profit (1)................ 16.9% 14.9%
===== =====
(1) Excludes depreciation, amortization and pre-opening expenses.
_____________________
Three Months Ended March 31, 2000 Compared to the Three Months Ended March 31,
1999
Revenues increased $9,685,609, or 9.6%, from $101,265,669 to $110,951,278
for the three months ended March 31, 2000, compared to the three months ended
March 31, 1999. The increase in revenues was primarily attributable to revenues
from new restaurant openings. Same store sales for the three months ended March
31, 2000 were up approximately 2.5%.
As a primary result of increased revenues, cost of sales increased
$2,588,396, or 8.2%, from $31,693,385 to $34,281,781 in the three months ended
March 31, 2000, compared to the same period in the prior year. Cost of sales as
a percentage of revenues for the three months ended March 31, 2000 decreased to
30.9%, from 31.3% in 1999. The decrease in cost of sales as a percentage of
revenues reflects the increased efficiencies and favorable product costs in 2000
as compared to 1999.
Restaurant labor expenses increased $1,521,588 or 5.0%, from $30,161,439
to $31,683,027 in the three months ended March 31, 2000, compared to the same
period in the prior year. Restaurant labor expenses as a percentage of revenues
for the three months ended March 31, 2000 decreased to 28.6% from 29.8%. The
decrease in restaurant labor expenses is primarily the result of a decline in
hourly labor expenses. The reduced general manager turnover experienced by the
Company has enabled the Company to better manage hourly labor expenses.
12
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
Other restaurant operating expenses increased $1,849,946, or 7.6%, from
$24,330,420 to $26,180,366 in the three months ended March 31, 2000, compared to
the same period in the prior year, primarily as a result of increased revenues.
Such expenses decreased as a percentage of revenues to 23.6% in 2000 from 24.0%
in 1999, as a primary result of more effective expense management.
Depreciation and amortization expense increased $1,103,751, or 21.1%, from
$5,242,025 to $6,345,776 in the three months ended March 31, 2000, compared to
the same period in the prior year. The dollar and percentage increase was
primarily due to the addition of new restaurants and purchases of new equipment.
General and administrative expenses increased $1,001,137, or 21.6%, from
$4,639,802 to $5,640,939 in the three months ended March 31, 2000, compared to
the same period in the prior year, and increased as a percentage of revenues to
5.1% from 4.6%. The dollar increase resulted primarily from increased personnel,
particularly field operations support staff, and salaries and travel costs to
support the Company's operations.
Pre-opening expenses in the three months ended March 31, 2000 were $952,891
as compared to $1,041,412 in the three months ended March 31, 1999. The Company
opened five units during the three months ended March 31, 2000, at an average
pre-opening expense of approximately $200,000 per unit.
The special charge of $3,675,000 ($2,370,000 net of tax) for the three
months ended March 31, 1999, was incurred in connection with the termination of
a proposed acquisition.
The increase in net interest expense in the three months ended March 31,
2000 is related to the interest expense incurred on borrowings under the
Company's line of credit in connection with the Company's stock buy back
program. The change in other income in the three months ended March 31, 2000,
as compared to the same period in the prior year, was not deemed significant.
Provision for income taxes increased by $1,466,234 from $125,729 in 1999 to
$1,591,963 in 2000 primarily due to the change in the Company's income. The
provision for income taxes as a percentage of income before income taxes
remained constant at 34.5%.
Liquidity and Capital Resources
For the three months ended March 31, 2000 the capital expenditures of the
Company were approximately $19.1 million, which were funded out of existing cash
balances, cash flow from operations and borrowings.
13
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
The Company has a $110.0 million credit facility from a syndicate of banks
which expires in June 2000, and is available for expansion, acquisitions and
general corporate purposes. At March 31, 2000, the Company had $75.0 million
outstanding under this credit facility at an approximate interest rate of 8.2%
and had cash and cash equivalent balances approximating $18.9 million. The
Company is currently in the process of finalizing a new three year bank credit
facility.
The Company's current development plans are to open 15 to 16 restaurants
during each of 2000 and 2001, 5 of which were open as of March 31, 2000.
Due to the Company's growth and increasing office space needs, the Company
is in the process of constructing a multistory office building for the
Company's corporate headquarters, meeting and training facilities and a research
and development test kitchen. Capital expenditures related to the office
building are anticipated to be $12 million.
On April 12, 2000, the Company's Board of Directors authorized a renewal of
the Company's stock buy back program for $36 million. During the 1999 stock buy
back program, the Company purchased approximately 6.4 million shares of common
stock for approximately $53 million.
On April 4, 2000, the Company declared its first quarterly dividend of
$0.025 payable to shareholders on May 3, 2000.
Seasonality and Quarterly Results
The Company's business is seasonal in nature, with revenues and, to a
greater degree, operating profits being lower in the first and fourth quarters
than in other quarters due to the Company's reduced winter volumes. The Company
has and continues to open restaurants in highly seasonal tourist markets and has
further noted that the Joe's Crab Shack concept restaurants tend to experience
even greater seasonality and sensitivity to weather. The Company anticipates a
decline in revenues from the initial ("honeymoon") volumes of new units.
Impact of Inflation
Management does not believe that inflation has had a significant effect on
the Company's operations during the past several years. Management believes the
Company has historically been able to pass on increased costs through menu price
increases, but there can be no assurance that it will be able to do so in the
future. Future increases in restaurant labor costs, including expected future
increases in federal minimum wages, land and construction costs could adversely
affect the Company's profitability and ability to expand.
14
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Class Action Litigation
-----------------------
Class action lawsuits were filed in June and July of 1999 against the
Company in the United States District Court for the Southern District of Texas,
Houston Division. These actions name the Company, all of its current executive
officers and directors, E.A. "Al" Jaksa, Jr. (a former executive officer and
director) and underwriters that participated in the Company's offering of Common
Stock in March 1998. Such lawsuits allege.that the defendants violated Federal
securities laws during certain periods while individually selling the Company's
common stock. The plaintiffs in these actions seek unspecified monetary
damages. Although the ultimate outcome of this matter cannot be determined at
this time, the Company believes these claims are without merit and intends to
defend these claims vigorously.
General Litigation
------------------
The Company is subject to other legal proceedings and claims that arise in
the ordinary course of business. Management does not believe that the outcome
of any of those matters will have a material adverse effect on the Company's
financial position, results of operations or cash flows.
Item 2. Changes in Securities Not Applicable
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 Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits --27. Financial Data Schedule
(b) Reports on Form 8-K
. The Company filed a Form 8-K on February 18, 2000, disclosing the
merger agreement with Rainforest Cafe, Inc.
. The Company filed a Form 8-K on May 4, 2000, terminating the merger
agreement with Rainforest Cafe, Inc.
15
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LANDRY'S SEAFOOD RESTAURANTS, INC.
(Registrant)
/s/ Tilman J. Fertitta
------------------------------------------------------
Tilman J. Fertitta
Chairman of the Board of Directors,
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Paul S. West
------------------------------------------------------
Paul S. West
Vice President-Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)
Dated: May 15, 2000
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-2000 DEC-31-1999
<PERIOD-START> JAN-01-2000 JAN-01-1999
<PERIOD-END> MAR-31-2000 MAR-31-1999
<CASH> 18,932,537 57,463,950
<SECURITIES> 0 0
<RECEIVABLES> 7,843,319 18,511,997
<ALLOWANCES> 0 0
<INVENTORY> 19,153,166 17,664,336
<CURRENT-ASSETS> 55,594,346 104,768,410
<PP&E> 516,940,587 459,095,090
<DEPRECIATION> (72,531,985) (50,281,625)
<TOTAL-ASSETS> 506,402,493 520,188,826
<CURRENT-LIABILITIES> 114,370,734<F1> 40,179,267
<BONDS> 35,473 76,130,365
0 0
0 0
<COMMON> 248,231 288,423
<OTHER-SE> 380,122,229 399,351,073
<TOTAL-LIABILITY-AND-EQUITY> 506,402,493 520,188,826
<SALES> 110,951,278 101,265,669
<TOTAL-REVENUES> 110,951,278 101,265,669
<CGS> 34,281,781 31,693,385
<TOTAL-COSTS> 105,084,780 100,783,483<F2>
<OTHER-EXPENSES> (7,639) 160,537
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,259,752 (42,122)
<INCOME-PRETAX> 4,614,385 363,771
<INCOME-TAX> 1,591,963 125,729
<INCOME-CONTINUING> 3,022,422 238,042
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,022,422 238,042
<EPS-BASIC> 0.12 0.01
<EPS-DILUTED> 0.12 0.01
<FN>
<F1>THE COMPANY'S BANK LINE OF CREDIT FACILITY IS CLASSIFIED AS A CURRENT
LIABILITY AT MARCH 31, 2000 AS THE EXISTING CREDIT FACILITY MATURES IN JUNE
2000. A NEW THREE YEAR CREDIT FACILITY IS CURRENTLY BEING NEGOTIATED WHICH
WILL RESULT IN THE RECLASSIFICATION OF $75 MILLION TO LONG-TERM.
<F2>TOTAL COSTS INCLUDE A SPECIAL CHARGE OF $3,675,000 INCURRED IN CONNECTION
WITH A TERMINATED MERGER TRANSACTION.
</FN>
</TABLE>
