UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report: December 17, 1999
THE QUIZNO'S CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 000-23174 84-1169286
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1415 Larimer Street, Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 291-0999
None
(Former name or former address, if changes since last report)
Item 5. Other Events. Press Release Announcing Fiscal Year-End Results and
Charge to Earnings Reflecting Change in an Accounting
Principle.
Exhibits
Exhibit 99.1 Press Release, dated December 17, 1999.
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.
THE QUIZNO'S CORPORATION
Date: December 17, 1999 By: /s/ John L. Gallivan
John L. Gallivan
Chief Financial Officer
Exhibit 99.1
QUIZNO'S(R) Reports Year-End Results
DENVER, Colo. - December 17, 1999 - The Quizno's Corporation (Nasdaq:
QUIZ) today reported a net loss applicable to shareholders of $1.5 million, or
$.55 per diluted share, in the nine-month period ended September 30, 1999. The
shortened fiscal year reflects a change in the Company's year-end from December
31st to September 30th, which was previously announced by the Company. The loss
was attributed to a one-time charge to earnings of $2.8 million net of taxes
taken as a cumulative effect of a change in an accounting principle. The
principle change was mandated by the Securities and Exchange Commission in the
last two weeks.
QUIZNO'S posted a net income of $1.3 million, or $.35 per share diluted,
before the cumulative effect of the change in accounting principle, compared to
a profit of $502,891, or $.15 per diluted share in the same period in 1998.
"QUIZNO'S growth in revenue, franchises sold, units open and its cash flow
remain excellent," said Rick Schaden, QUIZNO'S President and CEO. "The loss
reflects a requirement to defer area director fees, which we had previously been
permitted to take to income at the time of the sale."
Total revenue for the 1999 period was $20.7 million, an increase of 47%
over the $14.2 million in the same period in 1998. Continuing fees more than
doubled from $4.1 million to $8.7 million, and revenue from Company stores
increased to $6.4 million from $5 million in the same period from 1998 to 1999.
System wide sales grew to $121 million in the 9-month 1999 period from
$71.4 million in that period of 1998. Same store sales were up 7.1 percent for
the nine-month period over the same period the year before.
A total of 395 new franchises were sold in the U.S. and 39 internationally
in the period ended September 30, 1999. In addition, Master Franchises for
Australia and Central America were awarded.
QUIZNO'S, which franchises and owns and operates QUIZNO'S Classic Subs
restaurants, opened 197 new restaurants in the nine-month period, including 37
in Canada and one in Japan.
The SEC change in the accounting principle affects the financial reporting
of all franchisors that have area director programs similar to the Company's.
Application of the new accounting principle resulted in QUIZNO'S taking the
one-time charge and an additional deferral of $4.7 million in net area director
fees, along with a deferred tax asset of $1.9 million. The deferred fees will be
amortized back into income beginning in the year 1999 and every year thereafter
based on the remaining years in individual area director contracts.
Certain information in this release are forward-looking statements (as
defined in the Private Securities Litigation Reform Act of 1995) that involve
risks and uncertainties that might adversely affect the Company's operating
results in the future in a material way or that could cause actual results to
differ materially from those set forth in the forward looking statement. Such
risks and uncertainties include, without limitation, the effect of national and
regional economic and market conditions in the United States and in other
countries in which franchises are sold, costs of labor and employee benefits,
costs of marketing and of food and non-food items used in the operation of the
restaurants, intensity of competition for locations and franchisees, as well as
customers, perception of food safety, legal claims, and the availability of
financing for the Company and its franchisees. Many of these risks are beyond
the control of the Company. Such risks are detailed from time to time in the
Company's reports filed with the SEC, including the report on Form 10-KSB for
the year ended December 31, 1998.
FOR INFORMATION CONTACT:
Sue Hoover or Patrick Meyers
The Quizno's Corporation
720-350-3300
