August 14, 1996
OFIS Filer Support
SEC Operations Center
6842 General Green Way
Alexandria, VA 22312-2413
Dear Sirs:
Pursuant to regulations of the Securities and Exchange Commission,
submitted herewith for filing on behalf of Family Steak Houses of Florida,
Inc. is the Company's Quarterly Report on Form 10-Q for the Fiscal Quarter
ended July 3, 1996.
This filing is being effected by direct transmission to the Commission's
Edgar System.
Very truly yours,
Edward B. Alexander
Secretary/Treasurer
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter ended July 3, 1996
Commission File No. 0-14311
FAMILY STEAK HOUSES OF
FLORIDA, INC.
Incorporated under the laws of IRS Employer Identification
Florida No. 59-2597349
2113 FLORIDA BOULEVARD
NEPTUNE BEACH, FLORIDA 32266
Registrant's Telephone No. (904) 249-4197
Indicate by check mark whether the registrant 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_____
Title of each class Number of shares outstanding
Common Stock 10,893,200
$.01 par value As of August 5, 1996
FAMILY STEAK HOUSES OF FLORIDA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 3, 1996
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-Q,
and do not include all the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair
presentation of the results for the interim periods have been
included. Operating results for the thirteen and twenty-six week
periods ended July 3, 1996 are not necessarily indicative of the
results that may be expected for the fiscal year ending January 1,
1997. Effective January 4, 1996 the Company adopted Statement of
Financing Accounting Standards No. 121 "Accounting For The Impairment
of Long Lived Assets and For Long Lived Assets To Be Disposed Of". The
adoption of this statement did not have a material effect on the
consolidated financial statements. For further information, refer to
the financial statements and footnotes included in the Company's
Annual Report on Form 10-K for the fiscal year ended January 3, 1996.
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant
intercompany profits, transactions and balances have been eliminated.
Note 2. Earnings Per Share
Earnings per share for the thirteen and twenty-six weeks ended July 3,
1996 and June 28, 1995 were computed based on the weighted average
number of common and common equivalent shares outstanding. Common
equivalent shares are represented by shares under option and stock
warrants.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Quarter Ended July 3, 1996 versus June 28, 1995
The Company experienced a decrease in sales during the second
thirteen weeks of 1996 as compared to the same period in 1995. Second
quarter same-store sales decreased to $9,815,100 from $11,034,200 for
the same period in 1995.
Management believes that the decrease in same-store sales is
primarily due to the effects of increasing competition, including
several new or remodeled restaurants opened by competitors in areas
close to Company restaurants. Management is seeking to improve sales
trends by focusing on improved restaurant operations, increasing
marketing expenditures, and devising competitive strategies to offset
the effects of new competition.
Historically, the third and fourth quarters of each fiscal year
are less profitable for the Company than the first and second
quarters. If year-to-date sales trends continue, it is possible that
the Company will incur losses in the third and/or fourth quarters.
The costs and expenses of the Company's restaurants include food
and beverage, payroll and benefits, depreciation and amortization,
repairs, maintenance, utilities, supplies, advertising, insurance,
property taxes and rents. The Company's food, beverage, payroll and
benefit costs are believed to be higher than the industry average as a
percentage of sales as a result of the Company's philosophy of
providing customers with high value of food and service for every
dollar a customer spends. In total, food and beverage, payroll and
benefits, depreciation and amortization and other operating expenses
as a percentage of sales increased to 86.4% in the second quarter of
1996, from 84.9% in the same quarter of 1995, primarily due to an
increase in payroll and benefits costs as a percentage of sales.
Food and beverage costs as a percentage of sales decreased to
39.0% in the second quarter of 1996 from 39.6% in the same period of
1995, primarily due to lower beef costs and increased funding received
under the Company's soft-drink purchase contract in 1996.
Payroll and benefits as a percentage of sales increased to 27.6%
in the second quarter of 1996 from 26.3% in the same quarter of 1995,
primarily due to the decrease in same-store sales, which resulted in
reduced efficiencies in labor scheduling.
Other operating expenses as a percentage of sales increased to
15.6% in the second quarter of 1996 from 15.0% in 1995, primarily due
to higher utilities costs as a percentage of sales. Depreciation and
amortization increased as a percentage of sales in the second quarter
of 1996 compared to 1995, as a result of the decline in same-store
sales.
General and administrative expenses as a percentage of sales were
5.9% in the second quarter of 1996, compared to 5.8% in the same
quarter of 1995. Interest expense decreased from $414,800 during the
second quarter of 1995 to $384,500 in 1996. The decrease was due
primarily to lower outstanding principal balances, resulting from
principal payments made throughout the last twelve months.
The effective income tax rates for the quarters ended July 3,
1996 and June 28, 1995 were 0% and 17.8%, respectively. The rate of 0%
for the second quarter of 1996 is a result of management's belief that
the tax provision of $87,000 provided in the first quarter of 1996
will be sufficient to satisfy the necessary tax provision for the
entire year.
Net earnings for the second quarter of 1996 were $192,300,
compared to $308,200 in 1995. Earnings per share were $.02 for 1996,
compared to $.03 in 1995.
Six Months Ended July 3, 1996 versus June 28, 1995
For the six months ended July 3, 1996, total sales decreased 9.8%
compared to the same period of 1995, primarily due to increased
competition.
Food and beverage costs for the six month period ended July 3,
1996 was 39.5%, compared to 39.4% for the same period in 1995. Payroll
and benefits increased from 26.0% in 1995 to 27.2% in 1996. The
increase was primarily due to the decrease in same-store sales, which
resulted in decreased efficiencies in labor scheduling.
For the six months ended July 3, 1996, other operating expenses
increased to 15.6% from 14.3% in 1995, primarily due to increased
utilities costs and increased repair and maintenance costs as a
percentage of sales. Depreciation and amortization increased as a
percentage of sales for the six month period ended July 3, 1996,
compared to the same period of 1995, due to the decline in same-store
sales.
For the six months ended July 3, 1996, general and administrative
expenses decreased to 5.5% of sales from 5.6% for the same period in
1995. Interest expense decreased for the first six months of 1996 to
$775,500 from $864,500 for the same period in 1995, due to reduced
principal balances.
The effective income tax rates for the six-month periods ended
July 3, 1996 and June 28, 1995 were 16.1% and 16.0% respectively.
Net earnings for the six months ended July 3, 1996 were $453,400
or $.04 per share, compared to net earnings of $886,800, or $.08 per
share for the same period in 1995.
The Company's operations are subject to some seasonal
fluctuations. Revenues per restaurant generally increase from January
through April and decline from September through December. Operating
results for the quarter ended July 3, 1996 are not necessarily
indicative of the results that may be expected for the fiscal year
ending January 1, 1997.
Recent Developments
In April 1996, the Company signed a letter of intent to purchase
land on which the Company intends to construct a Ryan's restaurant.
The purchase of the property is contingent upon the Company's ability
to obtain building permits for the construction. The Company believes
the permits will be obtained in the third quarter of 1996 and that the
new restaurant will be completed and become operational in the fourth
quarter of 1996. The Company currently has a commitment from a lender
to finance the restaurant using sales-leaseback financing.
Liquidity and Capital Resources
Substantially all of the Company's revenues are derived from cash
sales. Inventories are purchased on credit and are converted rapidly
to cash. Therefore, the Company does not carry significant
receivables or inventories. As a result, working capital requirements
for continuing operations are not significant.
At July 3, 1996, the Company had a working capital deficit of
$2,382,000, compared to a working capital deficit of $3,284,900 at
January 3, 1996. The decrease in the working capital deficit during
the first six months in 1996 was due primarily to proceeds from the
sale of a building previously owned by the Company's Wrangler's
Roadhouse subsidiary and to net earnings generated in the first six
months of 1996.
Cash provided by operating activities increased 11.4% to
$1,769,500 in the first six months of 1996 from $1,589,000 in the same
period of 1995. This increase is primarily due to reductions in
accrued liabilities as a result of timing differences in payments
which occurred in 1995.
The Company spent approximately $388,200 in the first six months
of 1996 for restaurant renovation and equipment. Capital expenditures
for 1996 and 1997, based on present costs and plans for expansion, are
estimated to be $750,000 (not including the sales-leaseback financing
for the new restaurant as discussed above) and $900,000 respectively.
The Company projects that cash generated from operations will be
sufficient to fund these improvements.
In March 1995, the Company entered into an Amended and Restated
Note Agreement, dated as of February 1, 1995, with The Travelers
Insurance Company and certain of its affiliates (the "Note
Agreement"), pursuant to which existing notes of the Company were
renewed, amended and restated (as amended and restated, the "Notes").
In August 1995, the Note Agreement was sold to Cerberus Partners, L.P.
The Notes are due May 30, 1998 and provide for an interest rate of
9.0% and principal payments of $65,000 per month. As of July 3, 1996,
the outstanding balance due under the Notes was $11,217,800.
The Note Agreement includes detachable Warrants for purchases of
up to 1,750,000 shares of the Company's common stock at an exercise
price of $.40 per share. The Notes are secured by second mortgages on
twenty-two Company restaurant properties. The Note Agreement provides
for various covenants including prepayment options, the maintenance of
prescribed debt service coverages, limitations on the declaration of
cash dividends, sale of assets, and certain other restrictions.
Also in March 1995 the Company entered into an Amended and
Restated Loan Agreement with The Daiwa Bank, Limited, and SouthTrust
Bank of Alabama, National Association (the "Bank Loan") which extends
the maturity date of the Bank Loan until May 30, 1998. The Bank Loan
bears interest at prime rate plus 0.50%, with monthly principal
payments of $41,250 beginning April 1, 1995 ($67,100 prior to April 1,
1995). The Bank Loan is secured by first mortgages on twenty-two of
the Company's restaurant properties, and provides for various
covenants substantially consistent with those of the Note Agreement.
As of July 3, 1996, the outstanding balance under the Bank Loan was
$3,915,500.
Impact of Inflation
Costs of food, beverage, and labor are the expenses most affected
by inflation in the Company's business. Although inflation has not
had a significant impact on the Company in the past, there can be no
assurance that it will not in the future. A significant portion of
the Company's employees are paid at the federally established
statutory minimum wage. On August 8, 1996, President Clinton signed
into law a bill which will raise the federally mandated minimum wage
by $.50 per hour on October 1, 1996, and by an additional $.40 per
hour on September 1, 1997.
The Company will raise sales prices in order to offset the effect
of higher payroll and benefit costs. Sales prices have not been
increased to date in 1996, but were increased approximately 2.5% in
1995.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On June 18, 1996, the Company held its annual meeting
of shareholders to elect directors to serve for the
upcoming year.
(b) The following table sets forth the number of votes for
and against each of the nominees for director.
Nominee For Against
Lewis E. Christman, Jr. 8,939,730 213,048
Robert J. Martin 8,929,858 222,960
Joseph M. Glickstein, Jr. 8,941,162 211,656
Richard M. Gray 8,940,312 212,506
All nominees for director were elected by the affirmative
vote of a majority of the 9,152,818 shares of the Company's
common stock represented in person or by proxy at the annual
meeting of shareholders.
(c) The following table sets forth the number of votes for,
against or withheld, and number of abstentions and non-
votes, regarding a proposal to change the Company's
stock listing.
For Against Abstain Non-Votes
8,177,195 377,848 116,871 480,904
(d) Not Applicable
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as part of this report
on Form 10-Q, and this list comprises the Exhibit Index.
No. Exhibit
10.01 Employment agreement between the Company and Robert J.
Martin, dated as of June 20, 1996.
27.01 Financial Data Schedule.
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.
FAMILY STEAK HOUSES OF FLORIDA, INC.
(Registrant)
/s/ Lewis E. Christman
Date: August 12, 1996 Lewis E. Christman, Jr.
President and CEO
/s/ Edward B. Alexander
Date: August 12, 1996 Edward B. Alexander
Secretary/Treasurer
(Principal Financial and Accounting
Officer)
/s/ Michael J. Walters
Date: August 12, 1996 Michael J. Walters
Controller
Exhibit 10.01
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made and entered
into as of this 20th day of June, 1996 by and between FAMILY STEAK
HOUSES OF FLORIDA, INC., a corporation organized under the laws of
the State of Florida (hereinafter referred to as the "Company") and
ROBERT J. MARTIN (hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Employee and the Company wish for Employee to serve
in the position of Vice President of the Company; and
WHEREAS, the Company and Employee have agreed upon an
Employment Agreement and desire to reduce to writing its terms and
conditions as hereinafter set forth, intending that this Employment
Agreement will replace and supersede all prior agreements or
understandings concerning Employee's employment.
NOW, THEREFORE, in consideration of the premises, the parties
hereto do hereby agree as follows:
Section 1. Employment. Subject to the terms and
conditions contained herein, the Company hereby employs Employee,
effective upon the date hereof, as the Vice President of the
Company and Employee hereby accepts such employment and agrees to
devote his best efforts and as much time as may be necessary,
during or after the regular working hours of the Company, to
perform his duties hereunder.
Section 2. Employment Duties. During the term of this
Agreement, the Employee shall perform the duties typically
performed by the Vice President of the Company, subject to
direction of the President and Chief Executive Officer, according
to such policies and procedures as may be adopted from time to time
by the Board of Directors. The Employee shall report directly to
the President and Chief Executive Officer.
Section 3. Stock Option. In consideration of Employee's
agreement to serve as Vice President, the Company may from time to
time grant him options to acquire shares of the Company's common
stock. The award of any options shall be evidenced by an agreement
containing usual and customary provisions. In addition, Employee
shall be entitled to receive the Stock Option previously granted
under that certain Employment Agreement dated June 20, 1994.
Section 4. Compensation
4.1 Salary. Employee shall receive a salary from the Company
of Seventy Thousand Dollars ($70,000) per annum payable in
semi-monthly installments, subject to increase at any time as
determined by the Compensation Committee of the Board of Directors
of the Company.
4.2 Reimbursement. Employee shall be entitled to receive
bi-weekly reimbursement for, or seek direct payment by the Company
of, such reasonable expenses incurred by Employee as are consistent
with specific policies of the Company in the performance of his
duties under this Agreement, provided that Employee accounts
therefor in writing and that such expenses are ordinary and
necessary business expenses of the Company for federal income tax
purposes.
4.3 Vacation and Certain Fringe Benefits. Employee shall be
entitled to reasonable paid vacation in accordance with the
policies of the Company, and such other employee benefits as the
Board may fix from time to time; provided, however, that, in the
Employee's case, such employee benefits shall include comprehensive
medical, hospitalization and disability insurance and other
reasonable medical benefits in accordance with the policies of the
Company, including the cost of an annual physical examination.
Section 5. Term.
5.1 Duration. Unless sooner terminated in accordance with
provisions for termination set forth under Subsections 5.2 or 5.3
below, this Agreement shall continue in full force and effect for
a term ending on June 19, 1998, and shall thereafter renew for
additional one year terms unless either party notifies the other at
least 10 days prior to the end of any term.
5.2 Termination for Cause. This Agreement may be terminated
for cause as follows:
(a) At the election of the Company, upon Employee's breach of
any material provision of this Agreement;
(b) At the election of Employee, upon the Company's breach of
any material provision of this Agreement;
(c) Upon the death of Employee;
(d) At the election of either party, upon the total
disability of Employee to perform his normal duties for a period of
one hundred eighty (180) consecutive days, but only after the
Company provides ten (10) days' prior written notice to Employee;
(e) At the election of the Company, upon the indictment of
Employee or upon Employee entering a plea of guilty or nolo
contendere to the alleged commission by Employee, as principal,
accomplice or accessory, of a crime involving moral turpitude, or
an act of fraud, embezzlement or dishonesty; or
(f) At the election of the Company, upon the occurrence of
gross or willful misconduct by Employee in the performance of his
responsibilities hereunder during the course of employment.
In the event that the Company or the Employee elects to terminate
this Agreement because of a breach of any material provision hereof
pursuant to paragraph (a) or (b) of this Subsection 5.2,
respectively, the party electing to terminate this Agreement shall
give at least fourteen (14) days written notice to the other party
or its intention to terminate this Agreement, which notice shall
specify the breach of this Agreement upon which such termination is
based, and no such termination shall occur if the other party cures
the breach so specified within said fourteen (14) day period,
except that a party shall only have the opportunity to cure a
breach of a material provision on two occasions and thereafter that
party need not be given the opportunity to cure any further
material breaches.
All obligations of the Company under this Agreement, including
obligations under the stock option agreement contained in Section
3 hereof, shall immediately cease upon termination of this
Agreement by the Company for cause by the Company.
5.3 Termination Without Cause. Either party may terminate
this Agreement without cause upon giving 30 days written notice to
the other. If the Company elects to terminate this Agreement
without cause, then the parties agree that Employee shall be
entitled to receive, in a lump sum, the payments due him under
Section 4.1 for the remaining term of this Agreement, which amount
shall be in full satisfaction of any and all claims of Employee as
a result of his employment by the Company. Should the Employee
elect to terminate this Agreement without cause prior to the
expiration hereof, then all obligations of the Company hereunder
shall cease as of the date of termination.
Section 6. Notice. All notices provided for herein shall be
in writing and shall be deemed to be given when delivered in person
or deposited in the United States Mail, first class, registered or
certified, return receipt requested, with proper postage prepaid
and addressed as follows:
(a) If to the Company:
Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, Florida 32266
(b) If to the Employee:
Robert J. Martin
2113 Florida Boulevard
Neptune Beach, Florida 32266
Section 7. Miscellaneous.
7.1 If any provision or any part of any provision of this
Agreement is found not to be valid for any reason, such provision
shall be entirely severable from, and shall have no effect upon the
remainder of this Agreement.
7.2 This Agreement shall inure to the benefit of the Company,
its successors and assigns, and be binding upon the Employee, his
executor, administrator, heirs and personal representatives.
7.3 This Agreement may be modified only by written instrument
signed by each of the parties hereto.
7.4 This Agreement shall be construed under and governed by
the laws of the State of Florida.
7.5 Any failure of either party, on one or more occasions, to
enforce and require the strict compliance with and performance of
any of the terms and conditions of this Agreement shall not
constitute a waiver of any such terms or conditions at any future
time and shall not prevent such party from insisting on the strict
compliance with and performance of such terms and conditions at any
later time.
7.6 This Agreement comprises the entire agreement between the
parties hereto with respect to the subject matter hereof and there
are no agreements, undertakings, covenants or conditions concerning
the subject matter hereof, whether oral or written, express or
implied, that are not merged herein or superseded hereby.
7.7 The captions or headings of the Sections or other
subdivisions hereof are inserted only as a matter of convenience or
for reference and shall have no effect on the meaning of the
provisions hereof.
7.8 All payments to be made or benefits to be provided
hereunder by the Company shall be subject to reduction for any
applicable payroll-related or withholding taxes.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
FAMILY STEAK HOUSES OF FLORIDA, INC.
By:
Lewis E. Christman, Jr.,
President
Attest:
Edward B. Alexander, Secretary
EMPLOYEE:
Robert J. Martin
Financial Statements
<Caption
Family Steak Houses of Florida, Inc.
Consolidated Statements of Earnings
(Unaudited) For The Quarters Ended
------------ ------------
July 3, June 28,
1996 1995
------------ ------------
Sales $9,815,100 $11,034,200
Cost and expenses:
Food and beverage 3,824,800 4,366,400
Payroll and benefits 2,712,300 2,904,300
Depreciation and amortization 413,200 440,600
Other operating expenses 1,531,900 1,655,100
General and administrative expenses 578,000 636,400
Franchise fees 294,200 331,000
Loss on disposition of equipment 1,700 27,000
Equity loss in joint venture -- 18,800
------------ ------------
9,356,100 10,379,600
Earnings from operations 459,000 654,600
Interest and other income 117,800 135,100
Interest expense (384,500) (414,800)
------------ ------------
Earnings before income taxes 192,300 374,900
Provision for income taxes -- 66,700
------------ ------------
Net earnings $192,300 $308,200
============ ============
Net earnings per common and equivalent share: $0.02 $0.03
============ ============
Weighted average common shares and equivalents 12,011,000 11,794,000
============ ============
See accompanying notes to consolidated financial statements.
Family Steak Houses of Florida, Inc.
Consolidated Statements of Earnings
(Unaudited) For The Six Months Ended
------------ ------------
July 3, June 28,
1996 1995
------------ ------------
Sales $20,174,800 $22,376,300
Cost and expenses:
Food and beverage 7,975,000 8,810,200
Payroll and benefits 5,495,600 5,821,300
Depreciation and amortization 838,500 881,200
Other operating expenses 3,056,800 3,208,200
General and administrative expenses 1,106,800 1,242,700
Franchise fees 604,800 671,300
Loss on disposition of equipment 20,300 52,000
Equity loss in joint venture -- 45,500
------------ ------------
19,097,800 20,732,400
Earnings from operations 1,077,000 1,643,900
Interest and other income 238,900 276,100
Interest expense (775,500) (864,500)
------------ ------------
Earnings before income taxes 540,400 1,055,500
Provision for income taxes 87,000 168,700
------------ ------------
Net earnings $453,400 $886,800
============ ============
Net earnings per common and equivalent share: $0.04 $0.08
============ ============
Weighted average common shares and equivalents 12,062,000 11,448,000
============ ============
See accompanying notes to consolidated financial statements.
Family Steak Houses of Florida, Inc.
Consolidated Balance Sheets
(Unaudited) July 3, January 3,
1996 1996
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $1,464,400 $711,400
Investments 1,154,300 600,300
Receivables 61,000 73,900
Current portion of note and mortgages receivable 125,700 155,700
Inventories 238,100 247,400
Prepaids and other current assets 225,300 256,600
------------ ------------
Total current assets 3,268,800 2,045,300
Note and mortgages receivable 1,140,600 1,262,700
Property and equipment:
Land 9,089,200 9,342,200
Buildings and improvements 18,550,300 18,774,500
Equipment 12,060,800 11,940,900
------------ ------------
39,700,300 40,057,600
Accumulated depreciation (13,882,800) (13,220,900)
------------ ------------
Net property and equipment 25,817,500 26,836,700
Property held for resale 552,800 552,800
Other assets, principally deferred charges,
net of accumulated amortization 510,600 562,200
------------ ------------
$31,290,300 $31,259,700
============ ============
Family Steak Houses of Florida, Inc.
Consolidated Balance Sheets
CONTINUED
(Unaudited) July 3, January 3,
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1996
------------ ------------
Current liabilities:
Accounts payable $1,479,800 $1,250,700
Accrued liabilities 2,561,600 2,494,100
Income taxes payable 29,400 5,400
Current portion of long-term debt 1,580,000 1,580,000
------------ ------------
Total current liabilities 5,650,800 5,330,200
Long-term debt 13,658,300 14,420,400
Deferred revenue 49,900 49,400
------------ ------------
Total liabilities 19,359,000 19,800,000
Commitments and contingencies
Shareholders' equity:
Preferred stock of $.01 par;
authorized 10,000,000 shares;
none issued -- --
Common stock of $.01 par;
authorized 20,000,000 shares;
outstanding 10,893,200 in 1996
and 10,845,000 shares in 1995 108,900 108,500
Additional paid-in capital 8,141,100 8,123,300
Retained earnings 3,681,300 3,227,900
------------ ------------
Total shareholders' equity 11,931,300 11,459,700
------------ ------------
$31,290,300 $31,259,700
============ ============
See accompanying notes to consolidated financial statements.
Family Steak Houses of Florida, Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
For the Six Months Ende
-----------------------
July 3, June 28,
1996 1995
----------- -----------
Operating activities:
Net earnings $453,400 $886,800
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 838,500 881,200
Directors' fees in the form of stock options 10,000 20,000
Loss from joint venture -- 45,500
Amortization of loan discount 27,800 46,900
Amortization of loan fees 44,900 39,100
Loss on disposition of equipment 20,300 52,000
Decrease (increase) in:
Receivables 12,900 (39,900)
Income tax receivable -- 145,200
Inventories 9,300 33,500
Prepaids and other current assets 31,300 230,700
Other assets -- (272,300)
Increase (decrease) in:.
Accounts payable 229,100 299,600
Accrued liabilities 67,500 (719,600)
Income taxes payable 24,000 --
Deferred revenue 500 91,500
Other non-current liabilities -- (151,200)
----------- -----------
Net cash provided by operating activities 1,769,500 1,589,000
Investing activities:
Proceeds from sale of property and equipment 555,300 106,600
Proceeds from notes receivable 152,100 30,600
Net proceeds from sale of land held for resale -- 496,000
Proceeds from sale of investments -- 110,400
Purchase of investments (554,000) --
Capital expenditures (388,200) (1,757,000)
----------- -----------
Net cash used by investing activities (234,800) (1,013,400)
Financing activities:
Payments on long-term debt (789,900) (743,300)
Proceeds from the issuance of common stock 8,200 1,200
----------- -----------
Net cash used by financing activities (781,700) (742,100)
Net increase (decrease) in cash
and cash equivalents 753,000 (166,500)
Cash and cash equivalents - beginning of period 711,400 1,603,100
----------- -----------
Cash and cash equivalents - end of period $1,464,400 $1,436,600
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $704,300 $802,000
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Cash paid during the period for income tax $38,000 $35,000
Non-cash transactions: =========== ===========
Mortgage receivable as partial
proceeds on property sale $835,000 $835,000
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Warrants issued -- $81,000
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Accrued interest reclassed to long-term debt -- $100,000
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See accompanying notes to consolidated financial statements.