<PAGE>
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, 1996
- - ----- Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition Period from ______ to ______
Commission File No. 0-28258
SHELLS SEAFOOD RESTAURANTS, INC.
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 59-3372414
- - ------------------------------- ------------------------------------
(State or other jurisdiction of (IRS) Employer Identification Number
incorporation or organization)
16313 North Dale Mabry Highway, Suite 100, Tampa, FL 33618
----------------------------------------------------------------
(Address of principal executive offices) (zip code)
(813) 961-0944
----------------------------------------------------
(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. Yes ___ No x *
* All forms have been filed as required; the registrant has not been subject to
such filing requirements for the past 90 days.
Class Outstanding at June 6, 1996
----- ---------------------------
Common stock $.01 par value 3,297,436
<PAGE>
SHELLS SEAFOOD RESTAURANTS, INC. AND SUBSIDIARIES
Index
Part I - Financial Information Page Number
Item 1 - Financial Statements
Consolidated Balance Sheets as of March 31, 1996 and
December 31, 1995 3
Consolidated Statements of Operations for the 13 weeks
ended March 31, 1996 and April 2, 1995 4
Consolidated Statements of Stockholders' Deficiency for
the 13 weeks ended March 31, 1996 and April 2, 1995 5
Consolidated Statements of Cash Flows for the 13 weeks
ended March 31, 1996 and April 2, 1995 6
Notes to Consolidated Financial Statements 7-8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
Part II - Other Information 12
Signatures 13
2
<PAGE>
SHELLS SEAFOOD RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
ASSETS: (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $1,520,754 $776,779
Inventories 404,796 397,119
Other current assets 1,275,816 885,489
Receivables from related parties 98,933 62,994
----------- -----------
Total current assets 3,300,299 2,122,381
Property and equipment, net 3,655,206 3,577,097
Prepaid rent 412,520 425,120
Other assets 394,209 395,587
Goodwill 3,866,230 3,917,779
----------- -----------
TOTAL ASSETS $11,628,464 $10,437,964
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
CURRENT LIABILITIES:
Accounts payable $1,725,382 $2,523,173
Accrued expenses 2,751,487 1,803,203
Payable to related parties 97,355 98,927
Sales tax payable 339,788 229,531
Income taxes payable 273,000 -
Current portion of notes payable - stockholders 2,083,727 2,108,214
Current portion of long-term debt 87,219 81,499
----------- -----------
Total current liabilities 7,357,958 6,844,547
Deferred rent 686,614 651,134
Notes payable - stockholders, less current portion 1,000,000 1,000,000
Long-term debt, less current portion 697,309 705,816
----------- -----------
Total liabilities 9,741,881 9,201,497
----------- -----------
Minority partner interest 616,207 574,291
----------- -----------
Shells, Inc.. preferred shares subject to redemption,
$10 par value; authorized 10,000,000 shares; 185,312
issued and outstanding 1,580,726 1,551,476
----------- -----------
STOCKHOLDERS' DEFICIENCY:
Preferred stock, $0.01 par value; authorized
2,000,000 shares; none issued or outstanding
Common stock, $0.01 par value; authorized 20,000,000 - -
shares; 1,462,684 shares issued and outstanding
Additional paid-in capital
Accumulated deficit 14,627 14,627
552,591 581,841
(877,568) (1,485,768)
----------- -----------
Total stockholders' deficiency (310,350) (889,300)
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIENCY $11,628,464 $10,437,964
=========== ===========
See notes to consolidated financial statements.
</TABLE>
3
<PAGE>
SHELLS SEAFOOD RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
13 WEEKS ENDED MARCH 31, 1996 AND APRIL 2, 1995
(Unaudited)
<TABLE>
<CAPTION>
March 31, 1996 April 2, 1995
<S> <C> <C>
REVENUES:
Restaurant sales $10,506,323 $7,089,163
Management fees from related parties 106,694 94,605
----------- ----------
10,613,017 7,183,768
----------- ----------
COST AND EXPENSES:
Cost of restaurant sales 3,667,244 2,832,545
Labor and other related expenses 2,527,878 1,834,357
Other restaurant operating expenses 2,109,996 1,456,264
General and administrative expenses 812,528 535,104
Depreciation and amortization 292,148 249,981
----------- ----------
9,409,794 6,908,251
----------- ----------
INCOME FROM OPERATIONS 1,203,223 275,517
----------- ----------
OTHER INCOME (EXPENSE):
Interest expense, net (118,138) (92,876)
Other (148,483) (4,110)
----------- ----------
(266,621) (96,986)
----------- ----------
INCOME BEFORE ELIMINATION OF MINORITY PARTNER INTEREST AND
INCOME TAXES 936,602 178,531
ELIMINATION OF MINORITY PARTNER INTEREST (55,402) (29,551)
---------- ---------
INCOME BEFORE PROVISION FOR INCOME TAXES 881,200 148,980
PROVISION FOR INCOME TAXES 273,000
---------- ---------
NET INCOME 608,200 148,980
(29,250) (41,556)
---------- ---------
PREFERRED SHARES ACCRETION
NET INCOME APPLICABLE TO COMMON STOCK $ 578,950 $107,424
========= ========
PROFORMA NET INCOME PER SHARE OF COMMON STOCK $ 0.34 $0.06
========= ========
PROFORMA WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK
OUTSTANDING 1,686,511 1,715,934
========= =========
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
SHELLS SEAFOOD RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
13 WEEKS ENDED MARCH 31, 1996 AND APRIL 2, 1995
(Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL UNAMORTIZED ACCUMULATED TOTAL
PAID-IN DEFERRED DEFICIT
CAPITAL COMPENSATION
Shares Amount
------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 1,462,684 $14,627 $581,841 $ ($1,485,768) ($889,300)
Shells Inc. preferred shares
accretion (29,250) (29,250)
Net Income 608,200 608,200
--------- ------- -------- -------- ---------- ---------
Balance at March 31, 1996 1,462,684 $14,627 $552,591 $ ($877,568) ($310,350)
========= ======= ======== ======== =========== =========
Balance at January 1, 1995 1,462,684 $14,627 $748,070 ($34,125) ($1,082,326) ($353,754)
Shells Inc. preferred shares
accretion ( 41,556) (41,556)
Amortization of deferred
compensation 12,675 12,675
Net Income 148,980 148,980
--------- ------- -------- -------- ---------- ---------
Balance at April 2, 1995 1,462,684 $14,627 $706,514 ($21,450) ($933,346) ($233,655)
========= ======= ======== ======== ========== =========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
SHELLS SEAFOOD RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
13 WEEKS ENDED MARCH 31, 1996 AND APRIL 2, 1995
(Unaudited)
<TABLE>
<CAPTION>
March 31, 1996 April 2, 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $608,200 $148,980
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 292,148 249,981
Amortization of deferred compensation 12,675
Minority partners interest 41,914 29,551
Changes in assets and liabilities:
Increase in inventories (7,677) (53,040)
Decrease (increase) in receivables from related parties 35,939 (92,952)
Increase in other current assets and other assets (553,878) (216,463)
Decrease in prepaid rent 12,600 107,040
(Decrease) increase in accounts payable (797,791) 158,559
Increase in accrued expenses 948,284 116,305
Decrease in payable to related parties (1,572)
Increase in sales tax payable 110,257 93,828
Increase in income taxes payable 273,000
Increase in deferred rent 35,480 36,397
---------- ----------
Total adjustments 388,704 441,881
---------- ----------
Net cash provided by operating activities 996,904 590,861
---------- ----------
INVESTING ACTIVITIES:
Purchase of property and equipment (225,655) (433,305)
---------- ----------
Net cash used in investing activities (225,655) (433,305)
---------- ----------
FINANCING ACTIVITIES:
Proceeds from issuance of debt 1,000,000
Repayment of debt (27,274) ( 396,807)
---------- ----------
Net cash (used in) provided by financing activities (27,274) 603,193
---------- ----------
Net increase in cash 743,975 760,749
CASH AT BEGINNING OF PERIOD 776,779 472,535
---------- ----------
CASH AT END OF PERIOD $1,520,754 $1,233,284
========== ==========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 69,310 $ 93,967
========== ==========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
SHELLS SEAFOOD RESTAURANTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions for Form 10-Q and, therefore, these
statements do not include all of the information and footnotes required by
generally accepted accounting principles for annual financial statements. In the
opinion of management, all material adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
The financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto contained in the initial
public offering prospectus dated April 23, 1996 which is part of the Company's
registration statement on Form S-1, as amended (Registration Number 333-1600).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Initial Public Offering - The Company has raised capital through an initial
public offering (the "Offering") effective April 23, 1996. On May 13, 1996, the
Company obtained additional capital as the underwriter's overallotment option
and the Lenders option were exercised (See Note 5 "Subsequent Events"). A
portion of these proceeds were used to partially repay outstanding indebtedness
and will be used to partially finance the Company's proposed expansion, complete
the remodeling of existing restaurants and purchase and install point-of-sale
accounting systems. The Company believes that the proceeds of the Offering,
together with projected cash flow from operations, will be sufficient to satisfy
its contemplated cash requirements for at least 12 months. The Company's
expansion strategy, however, is significantly dependent upon obtaining third
party financing ("Third Party Financing") and/or achieving projected cash flow
from operations. Third Party Financing may include, but is not limited to,
traditional lending sources such as bank lines of credit, equipment leasing,
and/or restaurant sales/lease back arrangements that may be available to the
Company. The Company is seeking to obtain Third Party Financing as required from
time to time to fully implement its expansion strategy. In the event the
Company's plans change or its assumptions prove to be inaccurate (due to
unanticipated expenses or construction or other delays or otherwise) or, if
Third Party Financing or projected cash flows prove to be insufficient to fund
operations and fully implement the Company's expansion strategy, the Company
could be required to seek additional financing from sources not currently
anticipated.
Going Concern from Fiscal 1995 Financial Statements - The Company's annual
consolidated financial statements as of and for the period ended December 31,
1995 had been prepared assuming that the Company would continue as a going
concern which contemplated the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company incurred net losses
for the period from April 29, 1993 (date of inception) through January 2, 1994
and the years (52 weeks) ended January 1, 1995 and December 31, 1995.
Additionally, the Company had a deficiency in working capital of $4,722,166 and
a total stockholders' deficiency of $889,300 at December 31, 1995 (deficiency
in working capital of $4,057,659 and a total stockholders' deficiency of
$310,350 at March 31, 1996). These factors among others raised substantial
doubt about the Company's ability to continue as a going concern for a
reasonable period of time. The consolidated financial statements as of and for
the year ended December 31, 1995 did not include any adjustments that might
result from the outcome of this uncertainty. Subsequent to the first quarter of
1996, the Company successfully completed its Offering as discussed above.
Pro forma Net Income Per Common Share - Pro forma net income per common share is
computed by dividing net income applicable to common stock by the weighted
average number of shares of common stock and common equivalent shares
outstanding during the year, including the pro forma effects of the conversion
of related party notes and minority partner interest for the Company's common
stock and warrants which occurred April 23, 1996 concurrently with the offering.
In connection with the offering, the Company retired $2,060,000 in debt from the
proceeds thereof. After consideration of the additional shares necessary to be
issued to fund the retirement of such debt and the interest savings thereon, the
supplemental pro forma earnings per share for the quarter ended March 31, 1996
would have been $0.30 per share.
7
<PAGE>
3. OTHER CURRENT ASSETS
Other current assets consist of the following:
March 31, 1996 December 31, 1995
Preopening costs $ 150,147 $ 35,946
Organizational costs 438,366 316,129
Prepaid insurance 167,834 131,344
Accounts receivable 400,230 179,451
Other current assets 119,239 22,619
---------- --------
$1,275,816 $885,489
========== ========
4. ACCRUED EXPENSES
Accrued expenses consist of the following:
March 31, 1996 December 31, 1995
Accrued payroll $1,156,521 $760,930
Accrued interest 354,332 330,161
Accrued rent 170,323 157,891
Unearned revenue 221,074 172,302
Other 849,237 381,919
---------- ----------
$2,751,487 $1,803,203
========== ==========
5. SUBSEQUENT EVENTS
The Company completed an initial public offering of 1,400,000 shares of common
stock and 700,000 warrants on April 29, 1996 raising net proceeds of $5,270,000.
Concurrent with the Offering, the Company converted $750,000 in outstanding debt
and $159,000 in minority partner interest into 200,000 shares of common stock
and 100,000 warrants at $4.50 per share and $0.09 per warrant which represents
the initial public offering price net of underwriter's discount. In connection
with the conversion of debt, the lender was also granted an option (the "Lenders
option") to purchase an additional 24,752 shares and 12,376 warrants at $4.50
per share and $0.09 per warrant simultaneously with and in the same proportion
to which the Underwriter exercised their overallotment option. The Underwriter
exercised its overallotment option effective May 13, 1996 resulting in the
issuance of an additional 210,000 shares of common stock and 105,000 warrants,
plus the issuance of 24,752 shares and the 12,376 warrants through the Lenders
option generating an additional $1,035,000 in net proceeds. Upon completion of
the Offering, the Company repaid a $1,310,000 principal amount loan and accrued
and unpaid interest thereon of $307,000 to a stockholder with a portion of the
proceeds.
The effect of these transactions is to increase the pro forma weighted average
number of shares to 3,286,511 at the time of the offering and 3,521,263 after
the exercise of the underwriter's overallotment and the Lenders option. The
weighted average number of shares assumes the additional shares issued were
outstanding for the entire period. The pro forma earnings per share reflecting
the increased pro forma weighted average number of outstanding shares through
the Offering and the underwriter's overallotment and Lenders option would have
been $0.18 and $0.16, respectively.
6. RECAPITALIZATION
Prior to the effective date of the Offering of the Company's common stock, the
Company was reincorporated under the laws of the State of Delaware. The
Company's common stock, at a par value of $0.001 with 50,000,000 shares
authorized, were converted into shares of the Company's common stock registered
under the laws of the State of Delaware, at a par value of $0.01 with 20,000,000
shares authorized, on a share-for-share basis. At March 31, 1996, 1,462,684
shares of the Company's common stock were issued and outstanding. In addition,
the certificate of incorporation authorizes 2,000,000 shares of preferred stock,
$0.01 par value per share, none of which were issued or outstanding at March 31,
1996.
The accompanying balance sheet gives retroactive effect to the recapitalization.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following table sets forth, for the periods indicated, the percentages which
the items in the Company's Consolidated Statements of Operations bear to total
revenues or, where indicated, restaurant sales. The subsequent table sets forth,
for the periods indicated, certain operating data:
<TABLE>
<CAPTION>
13 Weeks Ended
---------------
March 31, 1996 April 2, 1995
<S> <C> <C>
Statement of Operations Data:
Revenues
Restaurant sales 99.0% 98.7%
Management fees from related parties 1.0 1.3
----- -----
Total Revenues 100.0% 100.0%
===== =====
Cost and expenses
Cost of restaurant sales (1) 34.9 40.0
Labor and other related expenses (1) 24.1 25.9
Other restaurant operating expenses (1) 20.1 20.5
----- -----
Total restaurant costs and expenses (1) 79.1% 86.4%
----- -----
General and administrative expenses 7.7 7.4
Depreciation and amortization 2.8 3.5
Income from operations 11.3 3.8
Interest expense, net (1.1) (1.3)
Other expenses, net (1.4) (0.1)
----- -----
Income before elimination of minority partner
interest and provision for Income taxes 8.8 2.4
Elimination of minority partner interest (0.5) (0.4)
----- -----
Income before provision for income taxes 8.3 2.0
Provision for Income taxes (2.6)
----- -----
Net income 5.7% 2.0%
Operating Data:
System-wide sales:
Company-owned restaurants(2) 16 13
Joint venture restaurant 1 1
Licensed restaurants 4 4
----- -----
Total 21 18
===== =====
</TABLE>
(1) As a percentage of restaurant sales.
(2) Includes for each period one Company-owned restaurant which until July
14, 1995 was owned by a joint venture.
9
<PAGE>
13 weeks ended March 31, 1996 and April 2, 1995
Revenues. Total revenues for the 13 weeks ended March 31, 1996 were $10,613,000
as compared to $7,184,000 for the 13 weeks ended April 2, 1995. The increase was
due to the opening of four new restaurants and the relocation of one existing
restaurant during 1995 as well as the 16.6% increase in same store sales during
the 13 weeks ended March 31, 1996. The increase in same store sales was
primarily attributable to an increase in the number of customers served,
resulting from expanded advertising which began in the fourth quarter of 1995,
remodeling of certain of these restaurants, and, to a lesser extent, from
selected menu price adjustments. To the extent that the Company has already
recognized significant gains from improved operating efficiencies, the Company
may not experience same-store sales increases at the same rate in the future.
Cost of restaurant sales. The cost of restaurant sales as a percentage of
restaurant sales improved to 34.9% for the first quarter of 1996 as compared to
40.0% for the first quarter in 1995. This improvement resulted primarily from
commodity cost savings on food purchases, primarily shrimp. The availability of
certain types of seafood fluctuates from time to time, resulting in
corresponding fluctuations in prices. While the Company has benefited from a
favorable fluctuation in prices during the first quarter of 1996, the Company
may not experience the same prices in the future. The Company has been able to
anticipate and react to fluctuations in food costs through purchasing seafood
directly from numerous suppliers, promoting certain alternative menu selections
in response to price and availability of supply and adjusting its menu prices,
accordingly.
Labor and other related expenses. Labor and other related expenses, as a
percentage of restaurant sales, improved to 24.1% during the first quarter of
1996 as compared to 25.9% for the first quarter in 1995. This improvement was
primarily attributable to efficiencies realized through higher sales volume and
the continuing implementation of operations management procedures and controls.
Other expenses. The other expenses were $148,000 for the first quarter of 1996
as compared to $4,000 for the first quarter in 1995. The increase was primarily
attributable to non-recurring compensatory expense related to stock warrants
issued during the first quarter of 1996.
Provision for income taxes. A provision for income taxes of $273,000 was
recognized for 1996 based on an effective rate of 31%. The 1996 effective rate
is based on federal statutory rates and state income tax rates coupled with the
utilization of the available net operating loss carryforward. This tax provision
is based on current tax law and is subject to change. There was no income tax
provision for the first quarter in 1995 as the net operating loss carryforward
offset taxable income.
Income from operations and net income. As a result of the increase in revenues
and the decrease in food and labor costs as a percentage of restaurant sales,
the income from operations increased $927,000 or 336% to $1,203,000 for the
first quarter of 1996 as compared to $276,000 for the first quarter in 1995. Net
income increased $459,000 or 308% to $608,000 for the first quarter 1996 as
compared to $149,000 for the first quarter in 1995.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1996, the Company's current liabilities of $7,358,000 exceeded
its current assets of $3,300,000 resulting In a working capital deficiency of
$4,058,000. The working capital deficiency was eliminated upon the Company's
initial public offering completed April 29, 1996. As is customary in the
restaurant industry, the Company has generally operated with negative working
capital as a result of pre-opening expenses associated with new restaurants, and
the turnover of restaurant inventory relative to more favorable vendor terms in
accounts payable. The deficiency as of March 31, 1996 was also attributed to the
Company refurbishing locations for new restaurants and remodeling existing
restaurants prior to obtaining the long-term financing to pay for such
expenditures.
Cash provided by operating activities for the first quarter of 1996 was $997,000
as compared with $591,000 for the first quarter in 1995. The increase of
$406,000 was attributable to improved operating results for the quarter as
reflected in the quarterly net income.
10
<PAGE>
The cash used in investing activities was $226,000 for the first quarter of 1996
as compared with the $433,000 for the first quarter of 1995. The decrease of
$207,000 was attributable to the Company engaging in one remodeling in the first
quarter of 1996 compared to two new store openings during the first quarter of
1995.
Cash used in financing activities was $27,000 for the first quarter of 1996
compared to cash provided by financing activities of $603,000 for the first
quarter of 1995. The source of funds during 1995 related to a $1,000,000 bridge
loan from stockholders, less the scheduled paydown of existing debt.
Through its initial public offering, completed on April 29, 1996, the Company
raised net proceeds of $5,270,000. The Company repaid a $1,310,000 principal
amount loan and accrued and unpaid interest thereon of $307,000 to a
stockholder. Effective May 13, 1996, the underwriter also exercised its
over-allotment option purchasing 210,000 shares of common stock and 105,000
warrants which, coupled with the exercise of the Lenders option for 24,752
shares and 12,376 warrants, generated an additional $1,035,000 in net proceeds.
SEASONALITY
The restaurant industry in general is seasonal depending on the location and
type of food served. Seasonality at the Company's restaurants is magnified due
to its present exclusivity to Florida and, in many cases, locations which are in
coastal cities, where sales are partially dependent on tourism and its
seasonality patterns. Historically, the largest sales volumes of the Company's
restaurants occur during the first and second quarters, the peak tourist seasons
in Florida.
11
<PAGE>
Part II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
During the 13 weeks period ended March 31, 1996, a vote was submitted to
the stockholders in lieu of a special or annual meeting to approve the
reincorporation of the Company in the State of Delaware as well as to vote on
the 1995 and 1996 Employee Stock Option plans. The aforementioned matters were
submitted to the stockholders with 1,460,208 shares consenting, no dissenting
votes and 2,476 shares without response.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
None
12
<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 thereunto duly authorized.
SHELLS SEAFOOD RESTAURANTS, INC.
(Registrant)
June 5, 1996 /s/ WILLIAM E. HATTAWAY
- - ---------------------------- --------------------------------------------
Date William E. Hattaway
President and Chief Executive Officer
June 5, 1996 /s/ WARREN R. NELSON
- - ---------------------------- --------------------------------------------
Date Warren R. Nelson
Vice President and Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets and the Consolidated Statements of Operations
and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,520,754
<SECURITIES> 0
<RECEIVABLES> 98,933
<ALLOWANCES> 0
<INVENTORY> 404,796
<CURRENT-ASSETS> 3,300,299
<PP&E> 5,716,469
<DEPRECIATION> 2,061,263
<TOTAL-ASSETS> 11,628,464
<CURRENT-LIABILITIES> 7,357,958
<BONDS> 0
0
1,580,726
<COMMON> 14,627
<OTHER-SE> (324,977)
<TOTAL-LIABILITY-AND-EQUITY> 11,628,464
<SALES> 10,506,323
<TOTAL-REVENUES> 10,613,017
<CGS> 3,667,244
<TOTAL-COSTS> 9,409,794
<OTHER-EXPENSES> 203,885
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 118,138
<INCOME-PRETAX> 881,200
<INCOME-TAX> 273,000
<INCOME-CONTINUING> 608,200
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 608,200
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
</TABLE>
