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 25, 1996
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 33-66392
------------------------------------
HOULIHAN'S RESTAURANT GROUP, INC.
Incorporated pursuant to the Laws of Delaware State
------------------------------------
Internal Revenue Service - Employer Identification No. 43-0913506
Two Brush Creek Boulevard, Kansas City, Missouri 64112
(816) 756-2200
------------------------------------
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 requirements
for the past 90 days. Yes x No
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes x No
Number of shares of common stock outstanding as of May 6, 1996: 9,998,012
<PAGE>
HOULIHAN'S RESTAURANT GROUP, INC. AND SUBSIDIARY
INDEX
Page
PART I FINANCIAL INFORMATION ----
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets............................ 3
Consolidated Statements of Income...................... 4
Consolidated Statements of Cash Flows.................. 5
Notes to Consolidated Financial Statements............. 6
Item 2. Management's Discussion and Analysis of Financial Condition 8
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K........................... 12
Signature............................................................. 13
2
<PAGE>
HOULIHAN'S RESTAURANT GROUP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
March 25, Dec. 25,
1996 1995
-------- --------
(Unaudited)(Audited)
ASSETS
Current assets:
Cash and cash equivalents ............................. $ 15,563 $ 10,314
Receivables ........................................... 1,508 1,661
Inventories ........................................... 2,142 2,276
Other current assets .................................. 2,241 2,918
Deferred income taxes ................................. 1,439 1,401
-------- --------
Total current assets .............................. 22,893 18,570
Property, equipment and leaseholds, net .................. 105,245 104,521
Reorganization value in excess of amounts allocable to
identifiable assets, net .............................. 61,196 62,108
Deferred debt issuance costs, net ........................ 303 330
Other assets, net ........................................ 5,411 5,487
-------- --------
Total assets ...................................... $195,048 $191,016
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capitalized lease
obligations ....................................... $ 11,209 $ 11,202
Accounts payable ...................................... 6,869 8,811
Accrued interest ...................................... 691 676
Accrued liabilities ................................... 13,374 13,375
-------- --------
Total current liabilities ......................... 32,143 34,064
Long-term debt, including capitalized lease obligations,
less current portion .................................. 77,724 72,779
Other liabilities ........................................ 11,448 10,834
Deferred income taxes .................................... 2,869 3,147
-------- --------
Total liabilities ................................. 124,184 120,824
-------- --------
Stockholders' equity:
Common stock-par value $.01 per share, 20,000,000 shares
authorized, 9,998,012 shares issued and outstanding 100 100
Additional paid-in capital ............................ 59,900 59,900
Retained earnings ..................................... 10,864 10,192
-------- --------
Total stockholders' equity ........................ 70,864 70,192
-------- --------
Total liabilities and stockholders' equity ........ $195,048 $191,016
======== ========
See accompanying notes to consolidated financial statements.
3
<PAGE>
HOULIHAN'S RESTAURANT GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended
---------------------------
March 25, March 27,
1996 1995
----------- ------------
Net sales ........................................ $ 66,974 $ 67,407
Cost of sales:
Food and bar costs ............................ 19,528 19,435
Labor costs ................................... 21,351 21,522
Operating expenses (exclusive of depreciation
and amortization shown separately) .......... 15,829 14,628
----------- -----------
Total cost of sales ....................... 56,708 55,585
----------- -----------
Gross profit .............................. 10,266 11,822
Depreciation and amortization .................... 3,784 3,615
General and administrative expenses .............. 4,419 4,492
Loss on disposition of properties, net ........... 139 346
Other (income), net .............................. (1,279) (905)
Interest expense ................................. 1,840 2,261
----------- -----------
Income before taxes ....................... 1,363 2,013
Income tax provision ............................. 691 938
----------- -----------
Net income ................................ $ 672 $ 1,075
=========== ===========
Earnings per common and common equivalent share .. $ 0.07 $ 0.11
=========== ===========
Weighted average common and common equivalent
shares ...................................... 9,998,012 9,998,012
=========== ===========
See accompanying notes to consolidated financial statements.
4
<PAGE>
HOULIHAN'S RESTAURANT GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Thirteen Weeks Ended
---------------------
March 25, March 27,
1996 1995
--------- ---------
Cash flows from operating activities:
Net income .......................................... $ 672 $ 1,075
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ................... 3,784 3,615
Amortization of deferred debt issuance costs .... 27 27
Loss on disposition of properties, net .......... 139 346
Deferred income tax provision (benefit) ......... (316) 113
Changes in operating assets and liabilities:
Receivables ................................... 153 (4,780)
Inventories ................................... 134 (44)
Other current assets .......................... 677 574
Accounts payable .............................. (1,942) (2,722)
Accrued interest .............................. 15 442
Accrued liabilities ........................... (1) (227)
Other assets .................................... 138 (508)
Other liabilities ............................... 614 242
--------- ---------
Net cash provided by (used for) operating
activities ................................. 4,094 (1,847)
--------- ---------
Cash flows from investing activities:
Capital expenditures, excluding capital leases ...... (3,863) (2,655)
Proceeds from disposition of properties ............. 66 795
--------- ---------
Net cash used for investing activities ........ (3,797) (1,860)
--------- ---------
Cash flows from financing activities:
Net proceeds from issuance of long-term debt,
excluding capitalized lease obligations ........... 5,000 5,000
Payments on long-term debt, including capitalized
lease obligations ................................. (48) (830)
--------- ---------
Net cash provided by financing activities ..... 4,952 4,170
--------- ---------
Net increase in cash and cash equivalents .............. 5,249 463
Cash and cash equivalents at beginning of period ....... 10,314 10,310
--------- ---------
Cash and cash equivalents at end of period ............. $ 15,563 $ 10,773
========= =========
Supplemental Disclosures of Cash Flow Information:
Cash paid (received) during the period for:
Interest ............................................ $ 1,798 $ 1,792
========= =========
Income taxes ........................................ $ (663) $ 96
========= =========
Disclosure of Accounting Policy:
For purposes of the consolidated statements of cash flows, the Company
considers all highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.
See accompanying notes to consolidated financial statements.
5
<PAGE>
HOULIHAN'S RESTAURANT GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended March 25, 1996
(Unaudited)
1. Basis of Presentation
The consolidated financial statements of Houlihan's Restaurant Group, Inc. and
subsidiary (the "Company") included in this Form 10-Q have been prepared without
audit (except that the balance sheet information as of December 25, 1995 has
been derived from consolidated financial statements which were audited) in
accordance with 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. The Company believes that the disclosures are adequate to make the
information presented not misleading. The accompanying consolidated financial
statements should be read in conjunction with the audited financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 25, 1995.
Company management believes that the information furnished herein reflects all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the results of the interim periods presented. The results
of operations for the interim periods presented are not necessarily indicative
of those to be expected for the full year.
The Company owns and operates full service casual dining restaurants under the
names of "Houlihan's", "Darryl's", "Bristol", "Braxton", "Chequers", "J.
Gilbert's", "Charley's Place", "Phineas" and the "Buena Vista Cafe".
2. Earnings Per Common and Common Equivalent Share
Earnings per common and common equivalent share are based on the weighted
average number of shares outstanding and the assumed exercise of outstanding
dilutive stock options issued under the Company's stock option plans less the
number of treasury shares assumed to be purchased from the proceeds using the
average market price of the Company's common stock. At March 25, 1996, warrants
to purchase up to 47,740 shares of common stock at a price of $37.92 per share
were outstanding. Additional shares of common stock issuable upon the exercise
of these warrants have not been considered in the calculation as the effect
would be antidilutive.
3. Long-Term Debt
Long-term debt, including capitalized lease obligations, is comprised of the
following (in thousands):
6
<PAGE>
<TABLE>
March 25, December 25,
1996 1995
---------------- ---------------
<S> <C> <C>
Bank debt:
Term Loan $ 40,112 $ 40,112
Real Estate Loan 40,000 40,000
Revolving Credit Loan 6,000 1,000
Capitalized lease obligations 2,821 2,869
---------------- ---------------
88,933 83,981
Less: Current portion 11,209 11,202
---------------- ---------------
$ 77,724 $ 72,779
================ ===============
</TABLE>
On January 8, 1996 the Company borrowed $5,000,000 on its Revolving Credit
Facility for general corporate purposes. In addition, on March 25, 1996, the
Bank Credit Agreement was amended to revise certain covenants of the agreement
(the "Second Amendment"). The minimum interest coverage ratio specified for the
first fiscal quarter of 1996 was reduced to 3.6. The Second Amendment also
required the aggregate Revolving Credit Facility commitment be reduced to
$15,000,000 from $20,000,000. As of March 25, 1996, the Company was in
compliance with all covenants of the Bank Credit Agreement as amended.
4. Contingencies and Commitments
Severance Agreements
In prior years, the Company entered into agreements with certain officers which
provide for severance payments in the event the employment of such officers is
terminated upon a change of control of the Company, as defined in the
agreements. As of March 25, 1996, the contingent liability under the agreements
for all participants was approximately $2,300,000.
5. Subsequent Event
On May 1, 1996, the Company entered into a letter of intent with Zapata
Corporation "Zapata", relating to Zapata's proposed acquisition of the Company
for a combination of cash and stock amounting to $8.00 per share. Approximately
35% of Zapata's outstanding shares of common stock are owned by the Glazer
Group, which owns approximately 73% of the Company's outstanding stock. The
letter of intent was negotiated by representatives of special committees of the
directors of both the Company and Zapata who are not members of the Glazer
family. The proposed transaction is subject to the negotiation and execution of
a definitive merger agreement and, among other things, approval of the
transaction by the directors and stockholders of both companies.
7
<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
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" presented in the Company's Annual Report on Form 10-K for the fiscal
year ended December 25, 1995.
General
The Company operates full service casual dining restaurants in 23 states. At
March 25, 1996, it operated 98 restaurants, including 61 Houlihan's, 28
Darryl's, three upscale Seafood Grills and six Specialty Restaurants comprised
of four dinnerhouses, one upscale steakhouse and the Buena Vista Cafe. At that
date, the Company also franchised 21 Houlihan's restaurants in nine states and
the Commonwealth of Puerto Rico.
Results of Operations
The following table sets forth information derived from the Company's
Consolidated Statements of Income expressed as a percentage of net sales.
<TABLE>
Quarter Ended
-------------------------------
March 25, March 27,
1996 1995
------------- --------------
<S> <C> <C>
Net sales 100.0 % 100.0 %
Cost of sales:
Food and bar costs 29.2 28.8
Labor costs 31.9 31.9
Operating expenses 23.6 21.8
------------- --------------
Total cost of sales 84.7 82.5
------------- --------------
Gross profit 15.3 17.5
Depreciation and amortization 5.6 5.4
General and administrative expense 6.6 6.7
Loss on disposition of properties, net 0.2 0.5
Other (income), net (1.8) (1.4)
Interest expense 2.7 3.3
------------- --------------
Income before income taxes 2.0 3.0
Income tax provision 1.0 1.4
------------- --------------
Net income 1.0 % 1.6 %
============= ==============
</TABLE>
Net Sales. Net sales for the first quarter decreased to $66,974,000, 0.6% down
from $67,407,000 generated for the same quarter of 1995. The decrease was
primarily due to a 2.8% decrease in comparable restaurant sales during the first
quarter due to inclement winter weather during the first two months of the
quarter that affected sales in many of the Company's restaurants. The weather
caused 43 restaurants to close for an average of 1.7 days. The
8
<PAGE>
decrease was partially offset by additional sales generated by the seven new
Houlihan's and one J. Gilbert's restaurant opened since December 26, 1994.
"Comparable restaurants" are restaurants open throughout fiscal years 1995 and
1996. The increases (decreases) in comparable restaurant sales, by concept, for
the first quarter of 1996 versus 1995 were as follows:
<TABLE>
First Quarter
------------------------------------
Food Bar Total
---------- ---------- ----------
<S> <C> <C> <C>
Houlihan's (2.2) % (5.3) % (3.0) %
Darryl's (2.7) (1.3) (2.4)
Seafood Grills 1.1 3.3 1.6
Specialty (7.8) (5.4) (7.0)
Total Company (2.4) % (4.3) % (2.8) %
</TABLE>
Cost of Sales. Cost of sales as a percentage of net sales increased during the
first quarter of 1996 from the same period of 1995. Cost of sales are composed
of three major items: food and bar costs, labor costs and operating expenses.
Combined food and bar costs as a percentage of net sales increased to 29.2%
during the first quarter of 1996 from 28.8% for the same period in 1995. The
increase was the result of cost increases and inefficiencies caused by the
implementation of a new menu in the Darryl's concept during the first quarter.
The new menu, emphasizing quality wood-fired steaks, was implemented in
substantially all Darryl's restaurants at the end of the quarter.
Labor costs as a percentage of net sales remained flat in comparison to prior
year. Costs continue to be controlled due to the implementation of new labor
scheduling systems in the Company's restaurants. The new systems will be
rolled-out to all of the Company's restaurants by the end of the second quarter.
Operating expenses increased during the first quarter primarily due to increases
in promotional expenses. During the first quarter, the Company tested various
advertising promotions in selected markets using radio, print, billboard and
television. Additionally, promotional expenses increased due to the amortization
of costs associated with the agreement for the right to name the Tampa Bay
Buccaneer Football Stadium "Houlihan's Stadium". Operating expenses were also
affected by an increase in rent expense in the Company's restaurants.
Depreciation and Amortization Expense. Depreciation and amortization expense as
a percentage of net sales increased during the first quarter due to increased
capital expenditures from new unit construction and ongoing restaurant
renovation and replacements.
General and Administrative Expenses. General and administrative expenses as a
percent of net sales declined during the first quarter of 1996 as compared to
the same period of 1995. The
9
<PAGE>
decrease is a result of cost savings associated with the staff and procedural
restructuring that was undertaken during the first quarter of 1995 to improve
the efficiency and productivity of the overhead and support areas of the
Company. The decrease was partially offset by an increase in costs associated
with the Company's franchise program due to the continuing rapid growth of the
program.
Other Income. Other income as a percentage of net sales increased primarily as a
result of an increase in franchise revenues over the prior period. As of the end
of the quarter, the Company franchised 21 restaurants and had signed agreements
with 14 franchise development groups providing for the development of an
aggregate of 57 additional Houlihan's over a five-year period.
Interest Expense. Interest expense decreased in the 1996 first quarter compared
to the 1995 first quarter due to lower average interest rates during the period,
as well as a lower outstanding debt balance. The average interest rate on the
Company's outstanding bank debt was 7.6% for the first quarter of 1996 as
compared to 8.9% for the first quarter of 1995.
Income Taxes. The Company's effective income tax rate was 50.7% for the 1996
first quarter, compared to 46.6% for the same period of 1995. The higher
effective rate was a result of the effect of amortization of the reorganization
value in excess of amounts allocable to identifiable assets in relation to a
smaller pretax income.
Net Income. Net income for the first quarter of 1996 decreased to $672,000, or
$0.07 per share, from $1,075,000, or $0.11 per share, from the first quarter of
1995. The decrease is attributable to the decline in comparable restaurant sales
and the increases in certain expenses mentioned above.
Liquidity and Capital Resources
At March 25, 1996, the Company had cash and cash equivalents of $15,563,000 and
a working capital deficiency of $9,250,000. The Company historically has relied
principally upon internally generated funds to finance its restaurant operations
and to fund working capital expenditures and has operated with working capital
deficiencies. The Company's ability to operate with such deficiencies is due to
the nature of the restaurant business, which does not require significant
investments in accounts receivable or inventories and which generally allows the
procurement of food and supplies on trade credit.
Long-term debt outstanding at March 25, 1996 consisted of a Term Loan, a Real
Estate Loan, a Revolving Credit Facility and obligations under capital leases.
The bank credit agreement requires semi-annual payments on the Term Loan of
$5,500,000 on March 31, 1996 and September 30, 1996, increasing over time to
$6,750,000, with the balance due at maturity on September 30, 1999. At March 25,
1996, the Company had $4,952,000 available to it under the Revolving Credit
Facility. By means of an interest rate cap, the Company has effectively
10
<PAGE>
protected itself against increases in LIBOR above 10% on a notional amount of
$30,000,000 of its indebtedness through March 1997.
Capital expenditures totalled $3,863,000 for the quarter as compared to
$2,655,000 for the same period in 1995. The increase was attributable to costs
incurred for two new Houlihan's that were opened during the quarter, as well as
ongoing remodeling projects, normal restaurant renovations and replacements and
the continuing installation of new management information systems in the
Company's restaurants. The Company expects to incur capital expenditures of
$10,637,000 for the remainder of 1996 in connection with opening three
additional restaurants and for normal renovations and replacements.
The Company intends to continue to operate with working capital deficiencies and
to rely upon internally generated funds to finance its restaurant operations and
to fund working capital expenditures, including its expansion plans. Management
believes that cash on hand, funds to be generated internally from operations and
the use of working capital changes, lease financing and funds available to the
Company under its credit facility will be adequate to meet the Company's debt
service and capital expenditure requirements for the foreseeable future.
Impact of Inflation
In the past, the Company has been able to recover inflationary cost increases
through increased food and beverage menu prices. There have been, and there may
be in the future, delays in implementing such menu price increases, and
competitive pressures may limit the Company's ability to recover such cost
increases in their entirety. Historically, the effects of inflation on the
Company's net income have not been materially adverse.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The Exhibits listed on the accompanying Exhibit Index are filed as part
of this report.
(b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
12
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
HOULIHAN'S RESTAURANT GROUP, INC.
(Registrant)
Date: May 7, 1996 By: /s/ William W. Moreton
------------------------- -----------------------------
William W. Moreton
Executive Vice President/
Chief Financial Officer
(Principal Financial and
Accounting Officer)
13
<PAGE>
HOULIHAN'S RESTAURANT GROUP, INC.
EXHIBIT INDEX
Exhibit
No. Description of Exhibit
- - --------- ----------------------------------------------------------------------
10.1 Second Amendment and Consent to Credit Agreement among Houlihan's
Restaurants, Inc. and Caisse Nationale De Credit Agricole, New York
Branch, as agent, dated March 25, 1996.
27 Financial Data Schedule
14
<PAGE>
SECOND AMENDMENT AND CONSENT
SECOND AMENDMENT AND CONSENT dated as of March 25, 1996 (this "Amendment"),
with respect to the Credit Agreement dated as of December 28, 1992 (the "Loan
Agreement"), among HOULIHAN'S RESTAURANTS, INC., a Delaware corporation (the
Borrower"), the financial institutions listed on Schedule A to the Loan
Agreement, which on the date of this Agreement consist solely of Caisse
Nationale de Credit Agricole (the "Banks"), and CAISSE NATIONALE DE CREDIT
AGRICOLE, NEW YORK BRANCH, as Agent, (the "Agent"), as such Loan Agreement has
been amended by that certain First Amendment and Consent dated as of December
14, 1993 by and among the Borrower, the Banks and the Agent.
The Borrower has requested that the Banks and the Agent amend certain
covenants of the Loan Agreement, and the Banks and the Agent have agreed to
amend the Loan Agreement, all upon the terms and conditions set forth in this
Amendment.
It is therefore agreed, effective as of the Effective Date (as
hereinafter defined), as follows:
1. Capitalized terms used herein without definition have the meanings
specified in the Loan Agreement.
2. The Loan Agreement is hereby amended as follows:
(a) The following provision is hereby added to section 7.13 of the Loan
Agreement as the last sentence thereof:
"Notwithstanding the terms of this Section 7.13, the minimum
interest coverage ratio specified for the first fiscal quarter
of the fiscal year 1996 shall not be less than 3.6:1".
(b) As a material inducement for the Banks and the Agent to enter into this
Amendment, the Borrower hereby permanently reduces the aggregate Revolving
Credit Commitments by Five Million and No/100 Dollars ($5,000,000.00) pursuant
to Section 2.9(f) of the Loan Agreement.
3. The Borrower hereby represents and warrants to the Banks and the Agent
that:
(a) it has full corporate power and authority to execute, deliver and
perform this Amendment;
(b) the execution, delivery and performance by the Borrower of this
Amendment have been duly authorized by the Borrower by all requisite corporate
action and will not (i) violate any provision of law, any order, rule or
regulation of any court or other governmental agency, authority or regulatory
body or other person, or The Certificate of Incorporation or Bylaws of the
Borrower, (ii) violate any provision of any material indenture,
<PAGE>
agreement, mortgage, contract or other instrument to which the Borrower is a
party or by which any of its property, assets or revenues are bound, or be in
conflict with, result in a breach of or constitute (with or without notice of
lapse of time or both) a default under, any such material indenture, agreement,
mortgage, contract or other instrument, or (iii) result in the creation or
imposition of any Lien of any nature whatsoever upon any of the property, assets
or revenues of the Borrower;
(c) this amendment constitutes the legal, valid and binding obligation of
the Borrower, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, moratorium or other similar
laws affecting creditor's rights generally and that enforceability may be
subject to general principles of equity;
(d) no registration with or consent or approval of, or other action by
stockholders or any Federal, state or other governmental agency, authority or
regulatory body or other person is required in connection with the execution,
delivery and performance of this Amendment;
(e) each Credit Party is now in compliance with all the terms, provisions
and covenants set forth in each of the Loan Documents on its part to be observed
or performed;
(f) no Default or Event of Default has occurred and is continuing;
(g) upon the effectiveness of the amendments contained in this Amendment,
(i) each Credit Party will be in compliance with all the terms, provisions and
covenants set forth in each of the Loan Documents on its part to be observed or
performed and (ii) no Default or Event of Default will have occurred and be
continuing;
(h) all of the representations and warranties contained in the Loan
Agreement are true and correct in all material respects as of the date hereof as
if made on and as of the date hereof; and
(i) the parties to the consent attached hereto as Exhibit A include all the
Borrower's existing Subsidiaries.
4. This Amendment shall become effective on the date (the "Effective Date")
of the receipt by the Agent of the following documents, in each case in form and
substance satisfactory to the Agent and its legal counsel:
(a) counterparts of this Amendment, duly executed by each of the Borrower
and the Required Banks; and
(b) certified copies of resolutions of the Board of Directors of the
Borrower approving the execution, delivery and performance of this Amendment and
the documents contemplated hereby; and
(c) a consent in the form of Exhibit A hereto shall have been executed and
<PAGE>
delivered by each other Credit Party.
5. The Borrower agrees to pay all reasonable out-of-pockets costs and
expenses incurred by the Agent in connection with the preparation of this
Amendment including, without limitation, the reasonable fees and disbursements
of legal counsel for the Agent.
6. This Amendment shall be construed in accordance with and shall be
governed by the laws of the State of New York applicable to agreements made and
to be performed in New York and shall be construed without regard to any
presumption or any other rule requiring construction against the party causing
the agreement to be drafted.
7. If any provision of this Amendment is invalid or unenforceable, the
balance of this Amendment shall remain in effect.
8. This Amendment may be executed in two or more counterparts, each of
which shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective as of the Effective
Date when copies hereof, when taken together, bear the signature of each of the
parties hereto.
9. Except as amended hereby, the Loan Agreement and each of the other Loan
Documents shall continue in full force and effect on the date of execution and
delivery of this Amendment. As used in the Loan Agreement, all references to the
terms "Loan Agreement" "this Agreement," "hereof," "hereby," or the like shall
mean the Loan Agreement, as amended by this Amendment, unless the context
otherwise specifically requires.
IN WITNESS WHEREOF, the Borrower, the Banks and the Agent have caused this
Amendment to be duly executed, all as of the day and year first above written.
HOULIHAN'S RESTAURANTS, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Executive Vice President
CAISSE NATIONALE DE CREDIT
AGRICOLE
By: /s/ Richard Manix
-------------------------
Name: Richard Manix
Title: First Vice President
CAISSE NATIONALE DE CREDIT
AGRICOLE, NEW YORK BRANCH,
as Agent
By: /s/ Richard Manix
-------------------------
Name: Richard Manix
Title: First Vice President
<PAGE>
CONSENT
Reference is made to that Credit Agreement dated as of December 28,
1992 (the "Loan Agreement") among Gilbert/Robinson, Inc., now known as
Houlihan's Restaurants, Inc. (the "Borrower"), the Banks referred to therein
(the "Banks") and Caisse Nationale de Credit Agricole, New York Branch, as agent
(the "Agent"), as such Loan Agreement has been amended by that certain First
Amendment and Consent dated as of December 14, 1993 by and among the Borrower,
the Banks and the Agent. Each of the undersigned, collectively with the Borrower
constituting all of the Credit Parties, hereby (a) acknowledges receipt of and
consents to the execution, delivery and performance of the Second Amendment and
Consent dated as of March 25, 1996 (the "Second Amendment") among the Borrower,
the Banks and the Agent, (b) ratifies and affirms each of the Loan Documents and
(c) acknowledges and agrees that each of the Loan Documents remains in full
force and effect and constitutes its valid and binding obligation, which
obligation shall not be impaired or affected in any way by the execution,
delivery or performance of the Second Amendment, except to incorporate
modifications effected by the Second Amendment. Capitalized terms used herein
will have the meanings specified in the Loan Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Consent to be duly
executed this March 25, 1996.
HOULIHAN'S RESTAURANTS, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Executive Vice President
DARRYL'S OF KISSIMMEE, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
DARRYL'S OF OVERLAND PARK, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
<PAGE>
DARRYL'S OF ST. LOUIS COUNTY, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
G/R TEXAS ENTERPRISES, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
S&H BEVERAGE CO., INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
HOULIHAN'S/BERGEN COUNTY, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
HOULIHAN'S OF CALIFORNIA, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
HOULIHAN'S OF FARMINGDALE, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
HOULIHAN'S OF INDIANAPOLIS, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
<PAGE>
HOULIHAN'S/MARYLAND, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
HOULIHAN'S/MILWAUKEE, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
HOULIHAN'S/SAN FRANCISCO, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
RED STEER, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
RESTAURANT SUPPLY, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
SAM WILSON'S/KANSAS, INC.
By: /s/ William W. Moreton
-------------------------
Name: William W. Moreton
Title: Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's first quarter Form 10-Q and is qualified in its entirety by reference
to such Form 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1996
<PERIOD-END> MAR-25-1996
<CASH> 15,563
<SECURITIES> 0
<RECEIVABLES> 1,508
<ALLOWANCES> 0
<INVENTORY> 2,142
<CURRENT-ASSETS> 22,893
<PP&E> 144,086
<DEPRECIATION> 38,841
<TOTAL-ASSETS> 195,048
<CURRENT-LIABILITIES> 32,143
<BONDS> 77,724
0
0
<COMMON> 100
<OTHER-SE> 70,764
<TOTAL-LIABILITY-AND-EQUITY> 195,048
<SALES> 66,974
<TOTAL-REVENUES> 66,974
<CGS> 56,708
<TOTAL-COSTS> 64,911
<OTHER-EXPENSES> 139
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,840
<INCOME-PRETAX> 1,363
<INCOME-TAX> 691
<INCOME-CONTINUING> 672
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 672
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
