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 APRIL 4, 1999
__ 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 65-0427966
- ----------------------------------- ------------------------------------
(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 X NO
--- ---
CLASS OUTSTANDING AT MAY 11, 1999
----- ---------------------------
Common stock, $.01 Par value 4,454,015
<PAGE>
SHELLS SEAFOOD RESTAURANTS, INC. AND SUBSIDIARIES
INDEX
Part I - Financial Information Page Number
Item 1 - Financial Statements
Consolidated Balance Sheets as of April 4, 1999 (Unaudited)
and January 3, 1999 3
Consolidated Statements of Income (Unaudited) for the
13 weeks Ended April 4, 1999 and March 29, 1998 4
Consolidated Statements of Cash Flows (Unaudited) for
the 13 weeks Ended April 4, 1999 and March 29, 1998 5
Notes to Consolidated Financial Statements - (Unaudited) 6-7
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-11
Part Ii - Other Information 12
Signatures 13
2
<PAGE>
SHELLS SEAFOOD RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
APRIL 4, 1999 JANUARY 3, 1999
------------- ---------------
<S> <C> <C>
ASSETS
Cash $ 4,530,283 $ 4,723,121
Inventories 1,056,536 954,066
Other current assets 1,688,304 1,282,641
Receivables from related parties 129,450 35,261
Deferred tax asset, net 94,551 110,551
----------- -----------
Total current assets 7,499,124 7,105,640
Property and equipment, net 22,320,581 22,240,255
Prepaid rent 602,800 622,368
Other assets 503,968 690,571
Goodwill 3,247,642 3,299,191
Deferred tax asset, net 937,449 937,449
----------- -----------
TOTAL ASSETS $35,111,564 $34,895,474
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 4,937,652 $ 6,318,544
Accrued expenses 3,864,689 3,432,332
Sales tax payable 723,153 489,688
Income taxes payable 329,903 --
Current portion of long-term debt 914,872 912,333
----------- -----------
Total current liabilities 10,770,269 11,152,897
Deferred rent 1,674,638 1,574,092
Long-term debt, less current portion 4,954,833 5,189,481
----------- -----------
Total liabilities 17,399,740 17,916,470
Minority partner interest 453,337 519,257
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; authorized
2,000,000 shares; none issued or outstanding -- --
Common stock, $.01 par value; authorized 20,000,000
shares; 4,454,015 shares issued and outstanding 44,540 44,540
Additional paid-in-capital 14,161,010 14,161,010
Retained earnings 3,052,937 2,254,197
----------- -----------
Total stockholders' equity 17,258,487 16,459,747
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $35,111,564 $34,895,474
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
SHELLS SEAFOOD RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
13 WEEKS ENDED
-------------------------------
APRIL 4, 1999 MARCH 29, 1998
------------- --------------
<S> <C> <C>
REVENUES: $ 26,618,667 $ 21,478,175
- --------- ------------ ------------
COST AND EXPENSES:
Cost of revenues 9,254,340 7,124,584
Labor and other related expenses 7,581,150 5,860,608
Other restaurant operating expenses 5,449,543 3,961,218
General and administrative expenses 1,789,992 1,527,395
Depreciation and amortization 786,545 561,912
Pre-opening expenses 214,864 333,593
------------ ------------
25,076,434 19,369,310
------------ ------------
INCOME FROM OPERATIONS 1,542,233 2,108,865
------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (225,106) (101,736)
Interest income 38,416 70,144
Other expense, net (29,466) (9,424)
------------ ------------
(216,156) (41,016)
------------ ------------
INCOME BEFORE ELIMINATION OF MINORITY
PARTNER INTEREST AND INCOME TAXES 1,326,077 2,067,849
ELIMINATION OF MINORITY PARTNER INTEREST (63,337) (59,231)
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 1,262,740 2,008,618
PROVISION FOR INCOME TAXES (464,000) (723,000)
------------ ------------
INCOME BEFORE THE CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING PRINCIPLE 798,740 1,285,618
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE, NET OF INCOME TAX BENEFIT -- (692,000)
------------ ------------
NET INCOME 798,740 593,618
PREFERRED SHARES ACCRETION -- (14,500)
------------ ------------
NET INCOME APPLICABLE TO COMMON STOCK $ 798,740 $ 579,118
============ ============
BASIC NET INCOME PER SHARE OF COMMON STOCK
BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE $ 0.18 $ 0.30
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -- (0.16)
------------ ------------
BASIC NET INCOME PER SHARE OF COMMON STOCK $ 0.18 $ 0.14
------------ ------------
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING 4,454,015 4,229,480
============ ============
DILUTED NET INCOME PER SHARE OF COMMON STOCK
BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE $ 0.17 $ 0.26
CUMULATIVE EFFECT OF ACCOUNTING CHANGE -- (0.14)
------------ ------------
DILUTED NET INCOME PER SHARE OF COMMON STOCK $ 0.17 $ 0.12
============ ============
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING 4,602,738 4,943,225
============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
SHELLS SEAFOOD RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
13 WEEKS ENDED
--------------------------------
April 4, 1999 March 29, 1998
------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 798,740 $ 593,618
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 786,545 561,912
Cumulative effect of accounting change -- 692,000
Minority partner interest (65,920) (64,816)
Changes in assets and liabilities:
Increase in inventories (102,470) (13,002)
(Increase) decrease in receivables from related parties (94,189) 88,930
Increase in other assets (219,060) (20,901)
Decrease in prepaid rent 19,568 12,600
Decrease in deferred tax asset 16,000 --
Decrease in accounts payable (1,380,892) (1,157,799)
Increase in accrued expenses 432,357 232,442
Increase in sales tax payable 233,465 168,484
Increase in income taxes payable 329,903 263,920
Increase in deferred rent 100,546 48,587
----------- -----------
Total adjustments 55,853 812,357
----------- -----------
Net cash provided by operating activities 854,593 1,405,975
----------- -----------
INVESTING ACTIVITIES:
Purchase of property and equipment (815,322) (3,740,678)
----------- -----------
Net cash used in investing activities (815,322) (3,740,678)
----------- -----------
FINANCING ACTIVITIES:
Proceeds from debt financing -- 1,850,000
Repayment of debt (232,109) (89,824)
Proceeds from the exercise of warrants to purchase common stock -- 161,101
----------- -----------
Net cash (used in) provided by financing activities (232,109) 1,921,277
----------- -----------
Net decrease in cash (192,838) (413,426)
CASH AT BEGINNING OF PERIOD 4,723,121 5,314,771
----------- -----------
CASH AT END OF PERIOD $ 4,530,283 $ 4,901,345
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 183,106 $ 104,726
Cash paid for income taxes $ 7,500 $ 70,000
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
5
<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 of Shells Seafood Restaurants, Inc. (the "Company")
should be read in conjunction with the audited consolidated financial statements
and notes thereto contained in the Form 10-K for the year ended January 3, 1999
filed with the Securities and Exchange Commission. Company management believes
that the disclosures are sufficient for interim financial reporting purposes.
Certain prior year amounts have been reclassified in the accompanying condensed
consolidated financial statements to conform with the current year presentation.
2. PRE-OPENING COSTS
In 1998, the Accounting Standards Executive Committee of the American Institute
of Certified Public Accountants (AICPA) issued Statement of Position 98-5
("SOP98-5") entitled "Reporting on the Costs of Start-up Activities." The SOP
98-5 requires companies to expense as incurred all start-up and pre-opening
costs that are not otherwise capitalizable as long lived assets. This new
accounting standard is effective for fiscal years beginning after December 15,
1998 with early adoption encouraged. The Company has elected early adoption of
the accounting standard retroactive to the beginning of fiscal 1998. The
cumulative effect of this change in accounting principle was $692,000, net of
income taxes.
3. EARNINGS PER SHARE
The following table represents the computation of basic and diluted earnings per
share of common stock as required by Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings Per Share":
13 WEEKS ENDED
-------------------------------
April 4, 1999 March 29, 1998
------------- --------------
Net Income $ 798,840 $ 593,618
Preferred share accretion -- (14,500)
----------- -----------
Net income applicable to common stock $ 798,840 $ 579,118
=========== ===========
Weighted common shares outstanding 4,454,015 4,229,480
Basic net income per share of common stock $ 0.18 $ 0.14
Effect of dilutive securities:
Warrants 148,298 606,560
Stock options 425 107,185
----------- -----------
Diluted weighted common shares outstanding 4,602,738 4,943,225
----------- -----------
Diluted net income per share of common stock $ 0.17 $ 0.12
----------- -----------
The earnings per share calculations excluded 604,460 options and warrants and
89,000 options and warrants during the first quarter of 1999 and 1998,
respectively, as they were anti-dilutive.
6
<PAGE>
4. NEW ACCOUNTING PRONOUNCEMENT
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
establishes accounting and reporting standards for derivative instruments and
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. This statement is effective for the Company for
periods beginning in fiscal year 2000. The Company believes that the adoption of
the provisions of SFAS No. 133 will not have a material effect on its financial
statements, based on current activities.
7
<PAGE>
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 Income bear to total
revenues.
<TABLE>
<CAPTION>
13 WEEKS ENDED
------------------------------------
April 4, 1999 March 29, 1998
---------------- --------------
<S> <C> <C>
REVENUES: 100.0% 100.0%
----- -----
COST AND EXPENSES:
Cost of revenues 34.8% 33.2%
Labor and other related expenses 28.5% 27.3%
Other restaurant operating expenses 20.5% 18.4%
----- -----
Total restaurant costs and expenses 83.8% 78.9%
----- -----
General and administrative expenses 6.7% 7.1%
Depreciation and amortization 3.0% 2.6%
Pre-opening expenses 0.8% 1.6%
Income from operations 5.8% 9.8%
Interest expense, net -0.8% -0.1%
Other expense, net -0.1% 0.0%
Elimination of minority partner interest -0.2% -0.3%
----- -----
Income before provision for taxes 4.7% 9.4%
Provision for income taxes -1.7% -3.4%
Cumulative effect of a change in accounting
principle, net of income tax benefit 0.0% -3.2%
----- -----
Net income 3.0% 2.8%
===== =====
</TABLE>
8
<PAGE>
13 WEEKS ENDED APRIL 4, 1999 AND MARCH 29, 1998
REVENUES. Total revenues for the 13 weeks ended April 4, 1999 were $26,619,000
as compared to $21,478,000 for the 13 weeks ended March 29, 1998. The
$5,141,000, or 23.9% increase in revenues was due to the opening of eight new
restaurants in 1998 subsequent to the first quarter of 1998, one new restaurant
opening in the first quarter of 1999, and a 3.3% increase in same store sales.
COST OF REVENUES. The cost of revenues increased to 34.8% for the first quarter
of 1999 from 33.2% for the first quarter of 1998. This increase was due to the
addition of free bread service and the effect of combination platters that were
added to the menu in January 1999 to enhance value.
LABOR AND OTHER RELATED EXPENSES. Labor and other related expenses increased to
28.5% during the first quarter of 1999 as compared to 27.3% for the first
quarter of 1998. This increase was primarily attributable to labor
inefficiencies in the Company's Midwest restaurants caused by lower unit sales
volumes as compared to its Florida restaurants, coupled with higher hourly wage
rates and management salaries.
OTHER RESTAURANT OPERATING EXPENSES. Other restaurant operating expenses
increased to 20.5% for the first quarter of 1999 as compared with 18.4% for the
first quarter of 1998. The increase was due to increased advertising expenses in
certain markets where the Company had not achieved media efficiencies as well as
higher expenses as a percentage of sales in the Midwest restaurants due to lower
unit sales volumes.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
decreased to 6.7% for the first quarter of 1999 as compared with 7.1% for the
first quarter of 1998. The improvement was due to economies of scale achieved
through increased chain-wide sales volumes.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense increased
to 3.0% for the first quarter of 1999 from 2.6% in the first quarter of 1998.
The increase was primarily due to new restaurant development in 1998 including
the depreciation of higher build-out costs of the Midwest restaurants as
compared to many of the Florida restaurants.
PRE-OPENING EXPENSES. Pre-opening expenses decreased to 0.8% of revenues from
1.6% of revenues for the first quarter of 1999 and 1998, respectively. The
decrease was due to one restaurant opening in the first quarter of 1999 as
compared with two in the first quarter of 1998.
INTEREST EXPENSES, NET. The interest expense net increased to 0.8% for the first
quarter of 1999 from 0.1% for the same quarter in 1998. The increase was due to
mortgage financing of two properties acquired in 1998, finance charges relating
to equipment from 1998 new restaurant openings and finance charges relating to
the Company's forward purchases of inventory holdings by U.S. Foodservice.
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE. The Company recognized a
$1,081,000 pre-tax charge, $692,000 net of income taxes, relating to the
write-off of pre-opening costs. This change resulted from the early adoption of
a new accounting standard, Statement of Position 98-5, "Reporting on the Costs
of Start-Up Activities," which requires that pre-opening and other start-up
costs be expensed as incurred rather than capitalized. The adoption has been
made effective as of the beginning of the Company's 1998 fiscal year. Since the
Company has amortized pre-opening costs over a one-year period following the
opening of its restaurants, the impact of the accounting change is not expected
to materially affect the Company's future net operating results, although the
quarterly fluctuations may be magnified based upon the timing of restaurant
openings.
PROVISION FOR INCOME TAXES. A provision for income taxes of $464,000 was
recognized for the first quarter of 1999 as
9
<PAGE>
compared to $723,000 during the same quarter in 1998. The decrease was directly
attributable to lower income before taxes as a 36% effective rate was used for
both periods.
INCOME FROM OPERATIONS AND NET INCOME. As a result of the factors discussed
above, the Company's income from operations decreased $567,000 to $1,542,000 for
the first quarter of 1999 from $2,109,000 for the first quarter of 1998. The
Company's net income before the cumulative effect of the accounting change
decreased to $799,000 for the first quarter of 1999 from $1,286,000 for the
first quarter of 1998. Net income after the cumulative effect of the accounting
change increased to $799,000 from $594,000 for the first quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES
As of April 4, 1999, the Company's current liabilities of $10,770,000 exceeded
its current assets of $7,499,000, resulting in a working capital deficiency of
$3,271,000. Historically, the Company has generally operated with minimal or
negative working capital as a result of the investing of current assets into
non-current property and equipment as well as the turnover of restaurant
inventory relative to more favorable vendor terms in accounts payable.
Cash provided by operating activities for the first quarter of 1999 was $855,000
as compared with $1,406,000 for the first quarter of 1998. The net decrease of
$551,000 was primarily attributable to increases in inventories, other assets
and receivables from related parties.
The cash used in investing activities decreased to $815,000 for the first
quarter of 1999 as compared with $3,741,000 for the first quarter of 1998. The
decrease of $2,926,000 was due to the Company opening one new restaurant during
the first quarter of 1999 as compared with costs associated with two first
quarter 1998 restaurant openings. There were also significant costs incurred
during the first quarter of 1998 on a third restaurant, a purchased site at a
cost of $1,200,000, which opened in April, 1998.
The cash used in financing activities was $232,000 in the first quarter of 1999
as compared with $1,921,000 cash provided by financing activities for the first
quarter of 1998. The decrease in cash provided was due to the absence of new
borrowings during 1999 as compared with $1,850,000 of new borrowings in the
first quarter of 1998, including $1,000,000 related to the mortgage financing of
the restaurant which opened in April, 1998. In the first quarter of 1998, the
Company also received $161,000 in proceeds from the exercise of warrants to
purchase shares of its common stock.
YEAR 2000 ISSUE
The Year 2000 compliance software issues will affect the Company as well as most
other companies. Historically, certain computer programs and certain
microprocessors were designed using two digits rather than four to define the
applicable year. As a result, software programs may recognize a date using the
two digits "00" as 1900 rather than the year 2000. Computer programs that do not
recognize the proper date could generate erroneous data or cause systems to
fail. The Company has established a Year 2000 task force to analyze the
Company's Year 2000 compliance. The Year 2000 project covers both the store
level systems as well as the corporate systems. The various phases of the
project include identification of systems, assessment of Year 2000 exposure,
validation, implementation, and contingency planning. Based on its assessment of
its major information technology systems, the Company expects that all necessary
modifications and/or replacements will be completed in a timely manner to insure
that each of its systems are Year 2000 compliant.
The Company's Year 2000 project also considers the readiness of significant
vendors. The Company believes that if certain vendors were not Year 2000
compliant, then alternate arrangements could be made that would alleviate any
material impact on operations. The contingency plans for material systems such
as general ledger, payroll, fixed assets, and cash management systems involve
manual workarounds and extra staffing. The contingency plans for distribution or
vendor related issues entail alternative suppliers and distributors.
10
<PAGE>
The Company has incurred approximately $40,000 of Year 2000 project expenses
through April 4, 1999. Future expenses are expected to approximate $20,000 as
the Company's current hardware systems and software, with minor modifications,
have been represented by their vendors to be either Year 2000 compliant or have
a Year 2000 compliant upgrade available at no charge.
The Company has identified and contacted its critical suppliers and service
providers to determine the extent to which the Company is vulnerable to those
third parties' failure to remedy their own Year 2000 issues. To the extent that
responses to Year 2000 readiness are unsatisfactory, the Company intends to
change suppliers to those who have demonstrated Year 2000 readiness. The Company
can give no assurances that the responses it receives will be accurate, or if
changes are necessary, that the Company will be successful in finding such
compliant suppliers and service providers. The Company currently has formal
information concerning the Year 2000 status of most of its major suppliers and
service providers. The Company continues to contact and assess Year 2000
readiness of its most critical suppliers and vendors.
Achieving Year 2000 compliance is dependent on many factors, some of which are
not completely within the Company's control. There can be no assurance that the
Company will be able to identify all aspects of its business that are subject to
Year 2000 problems of suppliers that affect the Company's business. There can
also be no assurance that the Company's software vendors are correct in their
assertions that the software is year 2000 compliant, or that the Company's
estimate of the costs of systems preparation for Year 2000 compliance will prove
ultimately to be accurate. Should either the Company's internal systems or
internal systems of one or more significant suppliers fails to achieve Year 2000
compliance, or the Company's estimate of the costs of becoming Year 2000
compliant prove to be materially inaccurate, the Company's business and results
of operations could be adversely affected.
SEASONALITY
The restaurant industry in general is seasonal, depending on restaurant location
and the type of food served. The Company has experienced fluctuations in its
quarter-to-quarter operating results due to its high concentration of
restaurants in Florida. Business in Florida is influenced by seasonality due to
various factors which include but are not limited to weather conditions in
Florida relative to other areas of the U.S. and the health of Florida's economy
in general and the tourism industry in particular. The Company's restaurant
sales are generally highest from January through April and June through August,
the peaks of the Florida tourism season, and generally lower from September
through mid-December. In many cases, locations are in coastal cities, where
sales are significantly dependent on tourism and its seasonality patterns. It is
anticipated that implementation of the Company's expansion program into the
Midwest markets will, over time, reduce some of the existing seasonal
fluctuations.
In addition, quarterly results have been, and in the future are likely to be,
substantially affected by the timing of new restaurant openings both in and
outside of Florida. Because of the seasonality of the Company's business and the
impact of new restaurant openings, results for any quarter are not generally
indicative of the results that may be achieved for a full fiscal year on an
annualized basis and cannot be used to indicate financial performance for the
entire year.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities and Use of Proceeds
None
Item 3 - Defaults Upon Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Stockholders held on April 28, 1999,
the stockholders voted to reprice options previously granted to non-employee
directors and approve supplemental option grants to all of the Company's
directors. The repricing and supplemental grants were approved by the vote of
3,325,205 shares for, 400,242 shares against or withheld, and 728,568
abstaining.
In addition, at the Annual Meeting of Stockholders held on April 28, 1999,
the following directors were nominated and elected by the votes indicated:
<TABLE>
<S> <C>
Frederick R. Adler: 3,713,058 For, 24,266 Against or Withheld, 716,691 Abstaining
Philip R. Chapman: 3,713,459 For, 23,865 Against or Withheld, 716,691 Abstaining
William E. Hattaway: 3,713,633 For, 23,691 Against or Withheld, 716,691 Abstaining
Christopher D. Illick: 3,713,759 For, 23,565 Against or Withheld, 716,691 Abstaining
Richard A. Mandell: 3,706,759 For, 30,565 Against or Withheld, 716,691 Abstaining
Kamal Mustafa: 3,713,759 For, 23,565 Against or Withheld, 716,691 Abstaining
Jay S. Nickse: 3,716,159 For, 21,165 Against or Withheld, 716,691 Abstaining
Edwin F. Russo: 3,715,759 For, 21,565 Against or Withheld, 716,691 Abstaining
</TABLE>
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
EXHIBIT DESCRIPTION
-------- -----------
27 Financial Data Schedule
(b) 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)
/s/ WILLIAM E. HATTAWAY
- --------------------------------- -------------------------------------------
Date May 11, 1999 William E. Hattaway
President and Chief Executive Officer
/s/ WARREN R. NELSON
- -------------------------------- --------------------------------------------
Date May 11, 1999 Warren R. Nelson
Vice President and Chief Financial Officer
13
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains a summary financial information extracted from the
consolidated balance sheet and the consolidated statements of operations
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-04-2000
<PERIOD-END> APR-04-1999
<CASH> 4,530,283
<SECURITIES> 0
<RECEIVABLES> 129,450
<ALLOWANCES> 0
<INVENTORY> 1,058,536
<CURRENT-ASSETS> 7,499,124
<PP&E> 29,604,382
<DEPRECIATION> (7,283,801)
<TOTAL-ASSETS> 35,111,564
<CURRENT-LIABILITIES> 10,770,269
<BONDS> 0
0
0
<COMMON> 44,540
<OTHER-SE> 14,161,010
<TOTAL-LIABILITY-AND-EQUITY> 35,111,564
<SALES> 26,505,128
<TOTAL-REVENUES> 26,618,667
<CGS> 9,254,340
<TOTAL-COSTS> 25,076,434
<OTHER-EXPENSES> (92,803)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (186,690)
<INCOME-PRETAX> 1,262,740
<INCOME-TAX> (464,000)
<INCOME-CONTINUING> 798,740
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 798,740
<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.17
</TABLE>
