<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
ACT OF 1934
For quarter period ended June 30, 1997,
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to ________________.
Commission file number 0-25886
GARDEN FRESH RESTAURANT CORP.
(Exact name of registrant as specified in its charter)
Delaware 33-0028786
(State or other jurisdiction of incorporation (I.R.S. Employer or
organization) Identification No.)
17180 Bernardo Center Drive, San Diego, CA 92128
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (619) 675-1600
Former name, former address and former fiscal year.
If changed since last report.
Indicate by a 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
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of Common Stock, $.01 par value, outstanding as of July
23, 1997 was 4,244,860. There are no other classes of common stock.
This form 10-Q consists of a total of 15 pages. The exhibit index is located
on page 15.
<PAGE>
GARDEN FRESH RESTAURANT CORP.
QUARTERLY REPORT ON FORM 10-Q
JUNE 30, 1997
TABLE OF CONTENTS
PAGE
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
Condensed Balance Sheet as of September 30, 1996 and
June 30, 1997 3
Condensed Statement of Income for the three months and
nine months ended June 30, 1996 and June 30, 1997 4
Condensed Statement of Cash Flows for the nine months
ended June 30, 1996 and June 30, 1997 5
Notes to Unaudited Condensed Financial Statements 6
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II: OTHER INFORMATION
Item 1: Legal Proceedings 13
Item 2: Changes in Securities 13
Item 3: Defaults Upon Senior Securities 13
Item 4: Submission of Matters to a Vote of Security Holders 13
Item 5: Other Information 13
Item 6: Exhibits and Reports on Form 8-K 13
<PAGE>
GARDEN FRESH RESTAURANT CORP.
CONDENSED BALANCE SHEET
(Dollars in thousands)
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENT
<CAPTION>
September 30, 1996 June 30, 1997
(Unaudited)
<S> <C> <C>
ASSETS
Cash $ 615 $ 1,189
Inventories 2,297 2,618
Other current assets 530 2,191
Deferred income taxes 734 109
---------- ----------
Total current assets 4,176 6,107
Property and equipment, net 41,552 49,141
Intangible and other assets 1,572 1,288
Deferred income taxes 762 749
---------- -----------
Total assets $ 48,062 $ 57,285
---------- -----------
---------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 3,028 $ 2,396
Current portion of long-term debt 3,490 4,367
Accrued liabilities 4,335 5,257
---------- -----------
Total current liabilities 10,853 12,020
Accrued rent 1,508 1,446
Long term debt, net of current portion 6,444 11,188
Shareholders' equity:
Common stock, $.01 par value; 12,000,000
shares authorized at September 30, 1996 and
June 30, 1997; 4,117,227 and 4,244,860
issued and outstanding at September 30, 1996
and June 30, 1997, respectively. 41 42
Paid in capital 37,772 38,561
Accumulated deficit (8,556) (5,972)
---------- -----------
Total shareholders' equity 29,257 32,631
---------- -----------
Total liabilities and shareholders' equity $ 48,062 $ 57,285
---------- -----------
---------- -----------
<FN>
See notes to unaudited condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
GARDEN FRESH RESTAURANT CORP.
CONDENSED STATEMENT OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
-------------------- --------------------
June 30, June 30, June 30, June 30,
1996 1997 1996 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET SALES $ 18,712 $ 23,502 $ 51,245 $ 66,238
COST AND EXPENSES:
Cost of sales 5,048 6,124 13,938 17,307
Restaurant operating expenses:
Labor 5,105 6,687 14,269 19,210
Occupancy and other 4,374 5,285 12,427 15,431
General and administrative expenses 1,308 1,411 3,804 4,215
Depreciation and amortization 1,148 1,604 3,179 4,665
-------- -------- -------- --------
Total costs and expenses 16,983 21,111 47,617 60,828
-------- -------- -------- --------
OPERATING INCOME 1,729 2,391 3,628 5,410
Interest expense, net (149) (398) (318) (1,083)
Other expense, net (15) (19) (48) (42)
-------- -------- -------- --------
INCOME BEFORE INCOME
TAXES 1,565 1,974 3,262 4,285
Provision for income taxes (603) (782) (1,284) (1,701)
-------- -------- -------- --------
NET INCOME $ 962 $ 1,192 $ 1,978 $ 2,584
-------- -------- -------- --------
-------- -------- -------- --------
Net income per share $ .23 $ .27 $ .48 $ .59
-------- -------- -------- --------
-------- -------- -------- --------
Shares used in computing
net income per share 4,230 4,377 4,155 4,360
-------- -------- -------- --------
-------- -------- -------- --------
<FN>
See notes to unaudited condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
GARDEN FRESH RESTAURANT CORP.
CONDENSED STATEMENT OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
-------------------------------------------
June 30, 1996 June 30, 1997
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 1,978 $ 2,584
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 3,179 4,665
Loss on disposal of property 48 50
Deferred income taxes 357 638
Changes in operating assets and liabilities
Inventories (160) (321)
Prepaid expenses and other current assets (1,305) (1,661)
Accounts payable (214) (632)
Accrued liabilities 1,938 922
Accrued rent 6 (62)
------------- -------------
Net cash provided by operating activities 5,827 6,183
------------- -------------
INVESTING ACTIVITIES:
Acquisition of property and equipment
New restaurants (11,046) (9,913)
Existing restaurant additions (1,224) (1,315)
Increase in intangible and other assets (743) (792)
------------- -------------
Net cash used in investing activities (13,013) (12,020)
------------- -------------
------------- -------------
FINANCING ACTIVITIES:
Proceeds from long term debt 4,931 9,008
Change in certificates of deposit
restricted to secure debt 62
Repayment of long term debt (1,644) (3,387)
Net proceeds from issuance of common stock 53 790
Proceeds from stock note 324
------------- -------------
Net cash provided by financing activities 3,726 6,411
------------- -------------
Net (decrease) increase in cash (3,460) 574
Cash at beginning of period 3,762 615
------------- -------------
Cash at end of period $ 302 $ 1,189
------------- -------------
------------- -------------
<FN>
See notes to unaudited condensed financial statements.
</TABLE>
<PAGE>
GARDEN FRESH RESTAURANT CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
1. CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements have been prepared by the
Company without audit and reflect all adjustments which are, in the opinion of
management, necessary for a fair statement of financial position and the
results of operations for the interim periods. The statements have been
prepared in accordance with the regulations of the Securities and Exchange
Commission and do not necessarily include certain information and footnote
disclosures necessary to present the statements in accordance with generally
accepted accounting principles. For further information, refer to the
financial statements and notes thereto for the fiscal year ended September 30,
1996 included in the Company's Form 10-K.
2. NET INCOME PER SHARE
Net income per share is computed based on the weighted average number of
common shares and common stock equivalents, using the treasury stock method,
outstanding during the periods ended June 30, 1996 and 1997.
3. PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
<PAGE>
GARDEN FRESH RESTAURANT CORP.
STATEMENT OF OPERATING DATA
<TABLE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
The following table sets forth the percentage of net sales of certain items
included in the Company's statement of operating data for the periods
indicated.
<CAPTION>
3 Months Ended 9 Months Ended
------------------- -------------------
June 30, June 30, June 30, June 30,
1996 1997 1996 1997
<S> <C> <C> <C> <C>
NET SALES 100.0% 100.0% 100.0% 100.0%
COST AND EXPENSES:
Cost of sales 27.0% 26.1% 27.2% 26.1%
Restaurant operating expenses:
Labor 27.3% 28.4% 27.8% 29.0%
Occupancy and other 23.4% 22.5% 24.3% 23.3%
General and administrative expenses 7.0% 6.0% 7.4% 6.4%
Depreciation and amortization 6.1% 6.8% 6.2% 7.0%
------------------- -------------------
Total operating expenses 90.8% 89.8% 92.9% 91.8%
------------------- -------------------
OPERATING INCOME 9.2% 10.2% 7.1% 8.2%
Interest expense (.8)% (1.7)% (.6)% (1.6)%
Other income (expense) (.1)% (.1)% (.1)% (.1)%
INCOME BEFORE INCOME
TAXES 8.3% 8.4% 6.4% 6.5%
Provision for income taxes (3.2)% (3.3)% (2.5)% (2.6)%
NET INCOME 5.1% 5.1% 3.9% 3.9%
</TABLE>
<PAGE>
RESULTS OF OPERATIONS
Three Months Ended June 30, 1997 Compared to Three Months Ended June 30, 1996
Net Sales. Net sales for the three months ended June 30, 1997 increased
25.7% to $23.5 million from $18.7 million for the comparable 1996 period. This
increase was primarily due to the opening of seven restaurants since the
comparable 1996 period. Additionally, the company experienced a 5% increase in
comparable sales which resulted from an increase in guest volume and average
meal price.
Cost of Sales. Cost of sales for the three months ended June 30, 1997
increased 22.0% to $6.1 million from $5.0 million for the comparable 1996
period. As a percent of sales, cost of sales for the three months ended June
30, 1997 decreased to 26.1% from 27.0% for the comparable 1996 period. The
decrease was primarily due to savings from better cost management coupled with
the increase in average meal price.
Labor Expense. Labor expense for the three months ended June 30, 1997
increased 31.4% to $6.7 million from $5.1 million for the comparable 1996
period. As a percentage of sales the labor expense for the three months ended
June 30, 1997 increased to 28.4% from 27.3% in the comparable 1996 period. The
increases in both total dollars and the percent of sales were primarily due to
new restaurant openings and to the increase in California and Federal minimum
wage rates.
Occupancy and Other Operating Costs. Occupancy and other operating costs
for the three months ended June 30, 1997 increased 20.5% to $5.3 million from
$4.4 million for the comparable 1996 period. This was due to the addition of
seven restaurants since the comparable 1996 period. As a percent of net sales,
occupancy and other operating costs for the three months ended June 30, 1997
decreased to 22.5% from 23.4% in the comparable 1996 period. This percentage
decrease was due to lower occupancy cost associated with the newer restaurants
and higher sales volume per restaurant leveraging fixed occupancy costs.
General and Administrative Expenses. General and administrative expenses
for the three months ended June 30, 1997 increased 7.7% to $1.4 million from
$1.3 million for the comparable 1996 period. As a percent of net sales,
general and administrative expenses for the three months ended June 30, 1997
decreased 1.0% due to increased sales volume.
Depreciation and Amortization Expense. Depreciation and amortization
expenses for the three months ended June 30, 1997 increased 45.5% to $1.6
million from $1.1 million for the comparable 1996 period. This increase was
due to depreciation and amortization associated with the new restaurants opened
since the comparable 1996 period. Depreciation and amortization as a percent
of net sales increased to 6.8% from 6.1% for the comparable 1996 period.
Interest Expense. Total interest expense for the three months ended June
30, 1997 increased 41.1% to $2.4 million from $1.7 million for the comparable
1996 period. This increase was due to new debt incurred by the Company to
support the continued expansion of new restaurants.
Nine Months Ended June 30, 1997 Compared to Nine Months Ended June 30, 1996
Net Sales. Net sales for the nine months ended June 30, 1997 increased 29.3%
to $66.2 million from $51.2 million for the comparable 1996 period. This was
due to the opening of seven restaurants since the comparable 1996 period and
the increase in comparable restaurant sales of 3.0%.
Cost of Sales. Cost of sales for the nine months ended June 30, 1997 as a
percent of sales decreased 1.1% from the comparable 1996 period due to better
cost management, but was higher in total dollars by $3.4 million at $17.3
million due to higher sales volume.
Labor Expense. Labor expense for the nine months ended June 30, 1997
increased 34.3% to $19.2 million from $14.3 million for the comparable 1996
<PAGE>
period. This increase was due to the new restaurants opened since the
comparable 1996 period. As a percentage of sales the labor expense for the
nine months ended June 30, 1997 increased to 29.0% from 27.8% in the comparable
1996 period due to the increase in the California and Federal minimum wage
rates.
Occupancy and Other Operating Costs. Occupancy and other operating costs
for the nine months ended June 30, 1997 increased 24.2% to $15.4 million from
$12.4 million for the comparable 1996 period. This was due to the addition of
seven restaurants since the comparable 1996 period. As a percent of net sales,
occupancy and other operating costs for the nine months ended June 30, 1997
decreased to 23.3% from 24.3% in the comparable 1996 period. This percentage
decrease was due to lower occupancy costs associated with the newer restaurants
and higher sales volume per unit leveraging fixed occupancy costs.
General and Administrative Expenses. General and administrative expenses
for the nine months ended June 30, 1997 increased 10.5% to $4.2 million from
$3.8 million for the comparable 1996 period. As a percent of net sales,
general and administrative expenses for the nine months ended June 30, 1997
decreased to 6.4% from 7.4% for the comparable 1996 period. This was due
primarily to the increased sales volume.
Depreciation and Amortization Expense. Depreciation and amortization
expenses for the nine months ended June 30, 1997 increased 46.9% to $4.7
million from $3.2 million for the comparable 1996 period. This increase was
due to depreciation and amortization for the new restaurants opened since the
comparable 1996 period. Depreciation and amortization as a percent of net sales
was 7.0% up from 6.2% for the comparable 1996 period. This percentage increase
was due to additional amortization of start up costs associated with the
opening of restaurants in new regions.
Interest Expense. Total interest expense for the nine months ended June
30, 1997 increased 267% to $1.1 million from $.3 million for the comparable
1996 period. Interest expense was up due to the new debt needed to continue
restaurant expansion.
LIQUIDITY AND CAPITAL RESOURCES
To date, the Company has financed its cash requirements principally from
operating activities, the private placement of preferred stock, external debt
and capital leases and a public stock offering. The Company does not have
significant receivables or inventory, and receives trade credit based upon
negotiated terms when purchasing food and supplies. For the nine months ended
June 30, 1997 the Company generated $6.2 million in cash flow from operating
activities up from $5.8 million for the comparable 1996 period. During this
period the Company acquired property and equipment totalling $11.2 million, and
paid down existing debt of $3.4 million, incurred additional debt of $9.0
million and received $.8 million from the issuance of common stock, which
resulted in a positive $.6 million in total cash flow.
The Company's principal capital requirement has been for funding the
development of new restaurants. Historically the Company has primarily leased
the land and buildings for its restaurant operations. The Company does
purchase land and/or buildings when favorable conditions are available. The
Company currently owns the land and buildings for eleven restaurants, including
the land for two sites the Company expects to open in fiscal 1997. During the
first nine months of fiscal 1997, the Company opened four full service
restaurants. As of June 30, 1997 the Company operated 47 restaurants. Capital
expenditures totalled $11.2 million during the first nine months of fiscal 1997
and $12.3 million for the comparable period in fiscal 1996.
The cash investment to open the four full service restaurants as of June
30, 1997 was $9.0 million excluding pre- opening costs. The pre-opening costs
for the four full service restaurants opened in fiscal year 1997 were $.6
million. The Company has signed 2 leases, and closed 2 escrows for additional
new sites expected to open in fiscal 1997. The Company has signed 2 leases,
closed 2 escrows, and opened 1 escrow for the 10 sites expected to open in
fiscal 1998. The cash investment to open a new restaurant typically includes
the purchase or installation of furniture, fixtures, equipment and leasehold
improvements, and in the case of an owned site, the purchase of land and a
building. In addition to budgeted capital expenditures for fiscal 1997 of
$14.8 million for new restaurant openings, the Company has budgeted $1.8
million in expenditures for fiscal 1997 for capital improvements at existing
sites.
<PAGE>
The Company will need to rely on funds generated from revenues to finance
a portion of the expansion currently planned for fiscal 1997, as well as any
expansion taking place after fiscal 1997. Should the Company's results of
operations or its rate of growth fail to be adequate to finance expansion or
should costs or capital expenditures rise, the Company may not have the ability
to open new restaurants at its desired pace or at all, and could be required to
seek additional financing in the future. There can be no assurance that the
Company will be able to raise such capital when needed on satisfactory terms or
at all.
IMPACT OF INFLATION
The primary inflationary factors affecting the Company's operations
include food and beverage and labor costs. The Company does not believe that
inflation has materially affected earnings during the past three years.
Substantial increases in costs and expenses, particularly food, supplies, labor
and operating expenses, could have a significant impact on the Company's
operating results to the extent that such increases cannot be passed along to
guests.
BUSINESS RISKS
The Company's business is subject to a number of risks. This Form 10-Q
contains forward-looking statements, including statements about openings of new
restaurants, within the meaning of Section 27A of the Securities Act of 1933,
as amended. Discussion containing such forward-looking statements may be found
in the material set forth under "Business Risks" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations," as well as
within this Form 10-Q generally. Actual results could differ materially from
those projected in the forward-looking statements as a result of the risk
factors set forth below and the matters set forth in this Form 10-Q generally.
The Company cautions the reader, however, that this list of factors may not be
exhaustive. The Company's business is subject to a number of risks, several of
which are described below. The reader is urged to consider the more
comprehensive summary of such risks found in the Company's Form 10-K for the
fiscal year ending September 30, 1996.
Certain Operating Results and Consideration
In fiscal 1995 and 1996, respectively, the Company experienced an increase
of 2.0% and an increase of 2.5% in comparable restaurant sales. In the first
nine months of fiscal 1996 and 1997, respectively, the Company's comparable
restaurant sales increased by approximately 3.1% and 3.0%, respectively. The
Company's newer restaurants have not historically experienced significant
increases in guest volume following their initial opening period. In addition,
the Company does not believe it has significant latitude to achieve comparable
restaurant sales growth through price increases. The Company believes that it
may from time to time in the future experience declines in comparable
restaurant sales, and that any future increases in comparable restaurant sales
would be modest.
Expansion Risks
The Company opened seven restaurants and one quick service restaurant in
fiscal 1996 and has opened four full service restaurants in the first nine
months of fiscal 1997 and currently intends to open four additional restaurants
in the remainder of fiscal 1997. The Company's ability to achieve its
expansion plans will depend on a variety of factors, many of which may be
beyond the Company's control, including the Company's ability to locate
suitable restaurant sites, negotiate acceptable lease or purchase terms, obtain
required governmental approvals and construct new restaurants in a timely
manner, attract, train and retain qualified and experienced personnel and
management, operate its restaurants profitably and obtain additional capital,
as well as general economic conditions and the degree of competition in the
particular region of expansion. The Company has experienced, and expects to
continue to experience, delays in restaurant openings from time to time. The
Company incurs substantial costs in opening a new restaurant and, in the
Company's experience, new restaurants experience fluctuating operational levels
for some time after opening. There can be no assurance that the Company will
successfully expand or that the Company's existing or new restaurants will be
profitable. The Company has encountered intense competition for restaurant
sites, and in many cases has had difficulty buying or leasing desirable sites
on terms that are acceptable to the Company. In many cases, the Company's
competitors are willing and able to pay more than the Company for sites. The
<PAGE>
Company expects these difficulties in obtaining desirable sites to continue for
the foreseeable future.
Additionally, the Company will be opening new restaurants in markets in
which it currently has no operating experience. Consequently a poor decision
about the selection of a new region could materially affect the Company's
results.
Cost Sensitivity
The Company's profitability is highly sensitive to increases in food,
labor and other operating costs. The Company's dependence on frequent
deliveries of fresh produce and groceries subjects it to the risk that
shortages or interruptions in supply caused by adverse weather or other
conditions could materially adversely affect the availability, quality and cost
of ingredients. In addition, unfavorable trends or developments concerning
factors such as inflation, food, labor and employee benefit costs (including
increases in hourly wage and minimum unemployment tax rates), rent increases
resulting from the rent escalation provisions in the Company's leases, and the
availability of experienced management and hourly employees may also adversely
affect the Company. The Company believes recent relatively favorable inflation
rates and part-time labor supplies in its principal market area have
contributed to relatively stable food and labor costs in recent years.
However, there can be no assurance that these conditions will continue or that
the Company will have the ability to control costs in the future.
Minimum Wage
The Company has recently experienced an increase in the hourly wage rate
due to an increase in the federal minimum wage rate on October 1, 1996 and in
California minimum wage rate on March 1, 1997. The Company also expects to
experience increases in the future due to increases in the California minimum
wage rate (March 1, 1998) and the federal minimum wage rate (October 1, 1997)
over the next year. While the Company has managed to absorb the increases as
of October 1, 1996 without a reduction in profitability, there can be no
assurance that the Company will be able to do so in the future.
Importance of Key Employees
The Company is heavily dependent upon the services of its officers and key
management personnel involved in restaurant operations, purchasing, expansion
and administration. In particular, the Company is dependent upon the
management and leadership of its three executive officers, Michael P. Mack,
David W. Qualls and R. Gregory Keller. The loss of any of these three
individuals could have a material adverse effect on the Company's business and
its financial results of operations. The success of the Company and its
individual restaurants depends upon the Company's ability to attract and retain
highly motivated, well-qualified restaurant operations and other management
personnel. The Company faces significant competition in the recruitment of
qualified employees.
Seasonality and Quarterly Fluctuations
The Company's business experiences seasonal fluctuations, as a
disproportionate amount of the Company's net income is generally realized in
the second, third and fourth fiscal quarters due to higher average sales and
lower average costs in these quarters. Quarterly results have been and are
expected to continue to fluctuate as a result of a number of factors, including
the timing of new restaurant openings. As a result of these factors, net sales
and net income on a quarterly basis may fluctuate and are not necessarily
indicative of the results that may be achieved for a full fiscal year.
Geographic Concentration in California; Restaurant Base
Twenty-nine of the Company's 47 existing restaurants are located in
California. Accordingly, the Company is susceptible to fluctuations in its
business caused by adverse economic or other conditions in this region,
including natural disasters or other acts of God. As a result of the Company's
continued concentration in California, adverse economic or other conditions in
California could have a material adverse effect on the Company's business. The
<PAGE>
Company's significant investment in, and long-term commitment to, each of its
restaurant sites limits its ability to respond quickly or effectively to
changes in local competitive conditions or other changes that could affect the
Company's operations. In addition, the Company has a small number of
restaurants relative to some of its competitors. Consequently, a decline in
the profitability of an existing restaurant or the introduction of an
unsuccessful new restaurant could have a more significant effect on the
Company's result of operations than would be the case in a company with a
larger number of restaurants.
Legal Matters
The Company closed a leased restaurant in September 1994 and filed a
lawsuit against the landlord for breach of contract. The landlord has
countersued the Company for damages. An unfavorable decision against the
Company could adversely affect the Company.
Volatility of Stock Price
The market price of the Company's common stock has fluctuated since the
initial public offering of the common stock in May 1995. Quarterly operating
results of the Company and other restaurant companies, changes in general
conditions in the economy, the financial markets or the restaurant industry,
natural disasters or other developments affecting the Company or its
competitors could cause the market price of the common stock to fluctuate
substantially. In addition, in recent years the stock market has experienced
extreme price and volume fluctuations. This volatility has had a significant
effect on the market price of securities issued by many companies for reasons
unrelated to the operating performance of these companies.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings Not Applicable
Item 2. Changes in Securities Not Applicable
Item 3. Default upon Senior Securities Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders Not Applicable
Item 5. Other Information Not Applicable
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
The Exhibits required by Item 6(a) of this report are listed in
the Exhibit Index on page 15 herewith.
b. Report on Form 8-K:
No reports on Form 8-K have been filed by the Company during the
fiscal quarter ended June 30, 1997.
<PAGE>
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GARDEN FRESH RESTAURANT CORP.
(Registrant)
Dated: August 11, 1997 /s/ Michael P. Mack
Michael P. Mack
President and Chief Executive Officer
(Principal Executive Officer)
Dated: August 11, 1997 /s/ David W. Qualls
David W. Qualls
Chief Financial Officer, Executive Vice
President - Finance and Real Estate and
Secretary
(Principal Accounting and Financial Officer)
SIGNATURES
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
PAGE NUMBER
3.1* Restated Certificate of Incorporation of Garden Fresh Restaurant ____
Corp.
3.2** Bylaws of Garden Fresh Restaurant Corp., as amended. ____
10.1** Form of Indemnity Agreement for executive officers and directors. ____
10.2** The Company's Restaurant Management Stock Option Plan, as ____
amended.
10.3** The Company's Key Employee Stock Option Plan, as amended. ____
10.4** The Company's 1995 Outside Director Stock Option Plan. ____
10.5** The Company's 1995 Key Employee Stock Option Plan, as amended. ____
27.1 Financial Data Schedule ____
* Incorporated by reference from Exhibit 4.1 filed with the Company's
Registration Statement on Form S-8 (No. 33-93568) filed June 16, 1995.
** Incorporated by reference from the Exhibits with corresponding numbers
filed with the Company's Registration Statement on Form S-1 (No.
33-90404), as amended by Amendment No. 1 to Form S-1 filed on April 19,
1995, Amendment No. 2 to Form S-1 filed May 8, 1995, Amendment No. 3 to
Form S-1 filed May 15, 1995, except that Exhibit 3.4 is incorporated from
Exhibits 3.4 and 3.4A, Exhibit 10.2 is incorporated by reference from
Exhibits 10.2 and 10.2A, Exhibit 10.3 is incorporated by reference from
Exhibits 10.3 and 10.3A, Exhibit 10.5 is incorporated by reference from
Exhibit 10.5 and 10.5A.
<PAGE>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME FILED AS PART OF THE
ANNUAL REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH ANNUAL REPORT ON FORM 10-Q
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 1,189
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 2,618
<CURRENT-ASSETS> 6,107
<PP&E> 73,026
<DEPRECIATION> 23,885
<TOTAL-ASSETS> 57,285
<CURRENT-LIABILITIES> 12,020
<BONDS> 0
0
0
<COMMON> 42
<OTHER-SE> 38,561
<TOTAL-LIABILITY-AND-EQUITY> 57,285
<SALES> 66,238
<TOTAL-REVENUES> 66,238
<CGS> 17,307
<TOTAL-COSTS> 60,828
<OTHER-EXPENSES> 42
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,083
<INCOME-PRETAX> 4,285
<INCOME-TAX> 1,701
<INCOME-CONTINUING> 2,584
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,584
<EPS-PRIMARY> 0.59
<EPS-DILUTED> 0.59
</TABLE>
