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PROSPECTUS SUPPLEMENT NO. 2
to Prospectus Dated May 23, 1997
1,000,000 SHARES
CONSOLIDATED PRODUCTS, INC.
COMMON STOCK
By means of this Prospectus Supplement, Consolidated Products, Inc. (the
"Company") hereby offers 300,000 shares of Common Stock (the "Shares") to Rock
Island Securities at a purchase price of $17.125 per share pursuant to the
Prospectus dated May 23, 1997, of which this Prospectus Supplement is a part.
The Company will place the Shares through David A. Noyes & Co., Inc., a
registered broker-dealer (the "Agent"). The Company will pay the Agent a fee
of $150,000 in connection with the sales of the Shares offered hereby.
The Company reported net earnings increased 23 percent for the third quarter
ended July 2, 1997 to $4,555,631 ($.29 per share). Revenues increased 16
percent to $65,724,712. Revenues and operating earnings (earnings before
interest and income taxes) reached record levels for the forty-fifth
consecutive quarter. Systemwide sales reached $82,117,902.
Steak n Shake's expansion and market penetration strategies continue to produce
significant revenues and earnings gains. With the opening of seven
Company-operated and four franchised Steak n Shake restaurants in the third
quarter, the number of systemwide restaurants increased nearly 20% over the
prior year. At the end of the third quarter, 240 Steak n Shake restaurants,
including 53 franchised, were being operated. Steak n Shake same store sales
for the quarter were flat after adjusting for the cannibalization effect of new
stores on existing restaurants in the well developed markets. The first
Company-operated Steak n Shake restaurant in the Nashville, Tennessee market
opened very strongly. The Company plans on opening 9 restaurants in the
Nashville market area in the next 18 months.
For the 40 weeks ended July 2, 1997, net earnings increased 25% to $11,588,092
($.74 per share) while revenues were up 17%. Systemwide sales increased 17% to
$249,157,213. Steak n Shake's same store sales year-to-date were up 2.3
percent after adjusting for the cannibalization effect of new restaurants.
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Thirty-two Steak n Shake restaurants, including 6 franchised, have been opened
in the 40 weeks ended July 2, 1997. Subsequent to the end of the third
quarter, three Company-operated Steak n Shake restaurants were opened.
Currently, eight Company-operated and four franchised restaurants are under
construction. Six of the restaurants under construction, including two
franchished, will be opened during the fourth quarter. With 29
Company-operated Steak n Shake restaurants opened to date in fiscal 1997 and
four scheduled to open before the end of the fiscal year, the Company will meet
its goal of opening Company-operated units at a 20% annual growth rate.
The Company currently operates 243 Steak n Shake restaurants, including
53 franchised, and 11 Specialty restaurants, primarily Colorado Steakhouses.
As previously reported, the Company has filed a registration statement with the
Securities and Exchange Commission for 1,000,000 shares of its Common Stock to
be offered up for sale, subject to market conditions, through Company-directed
transactions. To date, the Company has sold more than 800,000 shares,
including the shares covered by this Prospectus Supplement. The proceeds from
the sales were utilized to repay indebtedness.
The date of this Prospectus Supplement is August 1, 1997.
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CONSOLIDATED PRODUCTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
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TWELVE FORTY
WEEKS ENDED WEEKS ENDED
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7/2/97 7/3/96 7/2/97 7/3/96
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Revenues $ 64,173,847 $ 55,202,677 $ 195,603,671 $ 167,228,075
Net sales 842,603 687,423 2,353,309 2,069,903
Franchise fees 708,262 547,208 1,602,734 1,806,896
Other, net -------------- -------------- --------------- ---------------
65,724,712 56,437,308 199,559,714 171,104,874
-------------- -------------- --------------- ---------------
Costs and Expenses
Cost of sales 16,732,165 14,634,607 51,481,806 44,395,668
Restaurant operating costs 28,599,552 24,508,604 87,567,081 75,557,185
General and administrative 4,954,117 4,269,071 16,031,364 14,015,958
Depreciation and amortization 2,479,538 2,034,250 7,928,365 6,412,317
Rent 2,020,523 1,701,539 6,321,870 5,536,519
Marketing 2,011,481 1,710,799 6,038,581 5,316,211
Amortization of pre-opening costs 812,072 760,982 2,672,323 2,373,716
Interest 879,633 786,175 2,870,232 2,426,473
-------------- -------------- --------------- ---------------
58,489,081 50,406,027 180,911,622 156,034,047
-------------- -------------- --------------- ---------------
Earnings Before Income Taxes 7,235,631 6,031,281 18,648,092 15,070,827
Income Taxes 2,680,000 2,325,000 7,060,000 5,785,000
-------------- -------------- --------------- ---------------
Net Earnings $ 4,555,631 $ 3,706,281 $ 11,588,092 $ 9,285,827
============== ============== =============== ===============
Net Earnings Per Common and
Common equivalent Share: $ 0.29 $ 0.24(1) $ 0.74 $ 0.60(1)
Weighted Average Shares
and Equivalents: 15,766,308 15,581,750(1) 15,720,859 15,498,382(1)
(1) Net earnings per share and average shares outstanding have been restated
to give effect to the 10% stock dividend declared on December 18, 1996,
distributable on January 20, 1997 to shareholders of record on January 6, 1997.
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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
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7/2/97 9/25/96
(UNAUDITED)
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Assets
Current assets $ 15,242,312 $ 15,143,556
Property and equipment - net 138,008,653 110,662,288
Leased property - net 4,128,558 5,035,635
Other assets 513,770 574,023
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Total assets $ 157,893,293 $ 131,415,502
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Liabilities and Shareholders' Equity
Current liabilities $ 35,775,751 $ 37,304,688
Deferred income taxes 325,000 325,000
Obligations under capital leases 5,702,091 6,956,882
Revolving line of credit 16,000,000 4,000,000
Senior note 29,261,111 25,000,000
Shareholders' equity 70,829,340 57,828,932
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Total liabilities and shareholders' equity $ 157,893,293 $ 131,415,502
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