===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly report pursuant to section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1999
or
[ ] Transition report pursuant to section 13 or 15 (d) of the
Securities Exchange Act of 1934
Commission File Number
0-25629
CARROLS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 16-0958146
(State or other jurisdiction of Employer (I.R.S.
incorporation or organization) Identification Number)
968 James Street
Syracuse, New York 13203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (315) 424-0513
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
--- ---
Common stock, par value $1.00, outstanding at May 14, 1999: 10 shares
===============================================================================
PART 1 - FINANCIAL INFORMATION
CARROLS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
ASSETS 1999 1998
- ------ ------------- ------------
(unaudited)
Current assets:
Cash and cash equivalents $ 2,157,000 $ 6,777,000
Trade and other receivables 702,000 1,060,000
Inventories 3,129,000 3,431,000
Prepaid real estate taxes 1,106,000 796,000
Prepaid expenses and other current assets 2,948,000 2,768,000
Refundable income taxes 3,535,000 4,588,000
Deferred income taxes 3,879,000 3,956,000
------------- --------------
Total current assets 17,456,000 23,376,000
Property and equipment, at cost less accumulated
depreciation and amortization of $81,087,000 and
$77,451,000, respectively 113,025,000 107,669,000
Franchise rights, at cost less accumulated
amortization of $31,516,000 and $29,819,000, 104,710,000 106,041,000
respectively
Intangible assets, at cost less accumulated
amortization of $10,207,000 and $9,630,000 68,967,000 69,167,000
respectively
Other assets 9,520,000 10,367,000
Deferred income taxes 2,968,000 2,986,000
------------- --------------
$ 316,646,000 $ 319,606,000
============= =============
The accompanying notes are an integral part of these financial statements.
2
CARROLS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONT'D)
March 31, December 31,
LIABILITIES and STOCKHOLDER'S EQUITY 1999 1998
- ------------------------------------ ------------- --------------
(unaudited)
Current liabilities:
Accounts payable $ 9,856,000 $ 10,614,000
Accrued interest 6,214,000 2,012,000
Accrued payroll, related taxes and benefits 6,659,000 9,390,000
Other liabilities 7,497,000 9,431,000
Current portion of long-term debt 2,370,000 3,200,000
Current portion of capital lease obligations 279,000 296,000
------------- --------------
Total current liabilities 32,875,000 34,943,000
Long-term debt, net of current portion 255,653,000 256,285,000
Capital lease obligations, net of current portion 1,676,000 1,741,000
Deferred income - sale/leaseback of real estate 4,208,000 4,274,000
Accrued postretirement benefits 1,755,000 1,708,000
Other liabilities 8,540,000 6,657,000
------------- --------------
Total liabilities 304,707,000 305,608,000
Stockholder's equity:
Common stock, par value $1; authorized 1,000 shares,
issued and outstanding - 10 shares 10 10
Additional paid-in capital 24,484,990 24,484,990
Accumulated deficit (12,546,000) (10,487,000)
------------- --------------
Total stockholder's equity 11,939,000 13,998,000
------------- --------------
$ 316,646,000 $ 319,606,000
============= =============
The accompanying notes are an integral part of these financial statements.
3
CARROLS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
1999 1998
---- ----
(13 Weeks) (13 Weeks)
(unaudited)
Revenues:
Restaurant sales $ 104,662,000 $ 87,451,000
Franchise fees and royalty revenues 272,000 -
-------------- ---------------
Total revenues 104,934,000 87,451,000
Costs and expenses:
Cost of sales 31,369,000 25,391,000
Restaurant wages and related expenses 32,259,000 26,756,000
Other restaurant operating expenses 21,636,000 18,291,000
Advertising expense 4,449,000 4,005,000
General and administrative 6,004,000 3,749,000
Depreciation and amortization 5,771,000 4,203,000
-------------- ---------------
Total operating expenses 101,488,000 82,395,000
-------------- ---------------
Income from operations 3,446,000 5,056,000
Interest expense 5,713,000 4,334,000
-------------- ---------------
Income (loss) before income taxes and extraordinary loss (2,267,000) 722,000
Provision (benefit) for income taxes (1,148,000) 327,000
-------------- ---------------
Income (loss) before extraordinary loss (1,119,000) 395,000
Extraordinary loss on write-off of debt issue costs, net of taxes 940,000 -
-------------- ---------------
Net income (loss) $ (2,059,000) $ 395,000
============== ===============
The accompanying notes are an integral part of these financial statements.
4
CARROLS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
1999 1998
---- ----
(13 Weeks) (13 Weeks)
(unaudited)
Cash flows from operating activities:
Net income (loss) $ (2,059,000) $ 395,000
Adjustments to reconcile net income (loss) to cash provided
by operating activities:
Depreciation and amortization 5,771,000 4,203,000
Deferred income taxes (95,000) -
Gain on sale of property and equipment - (187,000)
Extraordinary loss on write-off of debt issue costs, net of tax 940,000 -
Change in operating assets and liabilities 3,874,000 1,115,000
------------- --------------
Cash provided by operating activities 8,431,000 5,526,000
------------- --------------
Cash flows from investing activities:
Capital expenditures:
New restaurant development (2,105,000) (2,642,000)
Remodels and other capital expenditures (8,556,000) (3,656,000)
Acquisitions of Burger King restaurants - (614,000)
Proceeds from sales of property and equipment - 157,000
------------- --------------
Net cash used for investing activities (10,661,000) (6,755,000)
------------- --------------
Cash flows from financing activities:
Proceeds from long-term debt - 400,000
Principal payments on long-term debt (1,462,000) (717,000)
Financing costs associated with senior credit facility refinancing (846,000) -
Principal payments on capital leases (82,000) (128,000)
Proceeds from sale-leaseback transactions - 1,702,000
Dividends paid - (91,000)
------------- --------------
Net cash (used for) provided by financing activities (2,390,000) 1,166,000
------------- --------------
Decrease in cash and cash equivalents (4,620,000) (63,000)
Cash and cash equivalents, beginning of period 6,777,000 2,252,000
------------- --------------
Cash and cash equivalents, end of period $ 2,157,000 $ 2,189,000
============= ==============
The accompanying notes are an integral part of these financial statements.
5
CARROLS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Statement of Management
-----------------------
The accompanying consolidated financial statements have been prepared
without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission and do not include all of the information and
the footnotes required by generally accepted accounting principles for
complete statements. In the opinion of management, all normal and
recurring adjustments necessary for a fair presentation of such
financial statements have been included.
The results of operations for the three months ended March 31, 1999
and 1998 are not necessarily indicative of the results to be expected
for the full year.
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 those estimates.
These consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto for the
year ended December 31, 1998 contained in our 1998 Annual Report on
Form 10-K. The December 31, 1998 balance sheet data is derived from
these audited financial statements.
Certain amounts for the prior year have been reclassified to conform
to the current year presentation.
2. Income Taxes
------------
The income tax provision (benefit) for the three months ended March
31, 1999 and 1998 was comprised of the following:
1999 1998
---------- --------
Current $ (1,053,000) $ 327,000
Deferred (95,000) -
------------- ---------
$ (1,148,000) $ 327,000
============= =========
For 1999 and 1998 the difference between the expected tax provision
resulting from application of the federal statutory income tax rate to
pre-tax income and the reported income tax provision result
principally from state taxes and non-deductible amortization of
franchise rights and other intangibles.
6
CARROLS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS (continued)
3. Summarized Financial Information of Certain Subsidiaries
--------------------------------------------------------
The following table presents summarized combined financial information
for the following wholly-owned subsidiaries, whom unconditionally
guarantee our $170.0 million senior subordinated notes:
Carrols Realty Holdings, Carrols Realty I Corp., Carrols Realty II
Corp., Carrols J.G. Corp., Quanta Advertising Corp., Pollo Franchise
Inc. and Pollo Operations, Inc. on a combined basis at March 31, 1999
and December 31, 1998, or for the three months ended March 31, 1999
and 1998.
March 31, December 31,
1999 1998
------------- ------------
Balance sheet:
Current assets $ 3,658,000 $ 910,000
Non-current assets 91,941,000 89,922,000
Current liabilities 8,812,000 7,401,000
Non-current liabilities 1,879,000 1,845,000
Three Months Ended March 31,
----------------------------------
1999 1998
------------- ------------
Statement of Operations:
Revenues $ 21,609,000 $ 54,000
Operating expenses 18,073,000 54,000
Income from operations 3,536,000 -
Net income 1,796,000 -
4. Business Segment Information
----------------------------
We are engaged in the quick-service restaurant industry, with two
restaurant concepts: Burger King, operating as a franchisee, and Pollo
Tropical, a Company owned concept. Our Burger King restaurants are all
located in the United States, primarily in the Northeast, Southeast
and Midwest. Pollo Tropical is a regional quick-service restaurant
chain featuring grilled marinated chicken and authentic "made from
scratch" side dishes. Pollo Tropical's core markets are located in
south and central Florida.
Segment information as of and for the three months ended March 31, 1998
is not presented, since the Pollo Tropical acquisition did not occur
until July 9, 1998 and previous to this, we operated our business as
one segment whose results are reflected in the March 31, 1998 Statement
of Operations.
7
CARROLS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS (continued)
Segment information for Burger King restaurants and Pollo Tropical for
the three months ended March 31, 1999 is shown in the following table.
The "Other" column includes corporate related items not allocated to
reportable segments and for income from operations, principally
corporate depreciation and amortization. Other identifiable assets
consist primarily of franchise rights and intangible assets.
Non-operating expenses, comprised of interest expense and the
extraordinary loss, are corporate related items and therefore have not
been allocated to the reportable segments.
Three Months Ended March 31, 1999
--------------------------------------------------------------
Burger
King Pollo
Restaurants Tropical Other Consolidated
----------- -------- ----- ------------
($ in 000's)
Revenues $ 83,556 $ 21,378 $ - $ 104,934
Cost of sales 23,977 7,392 - 31,369
Restaurant wages and related
expenses 27,411 4,848 - 32,259
Depreciation and amortization 3,197 477 2,097 5,771
Income from operations 1,549 3,994 (2,097) 3,446
Identifiable assets 197,664 24,190 94,792 316,646
Capital expenditures, excluding
acquisitions 5,755 4,404 502 10,661
5. Acquisitions
------------
On July 9, 1998, we consummated the purchase of the outstanding common
stock of Pollo Tropical Inc. ("Pollo Tropical") for an approximate
cash purchase price of $94.6 million and on July 20, 1998 merged Pollo
Tropical into the Company. Pollo Tropical operates and franchises
quick-service restaurants featuring fresh grilled chicken marinated in
a proprietary blend of tropical fruit juices and spices and authentic
"made from scratch" side dishes. The Pollo Tropical acquisition has
been accounted for by the purchase method of accounting. The excess
purchase price over net assets acquired is included in intangible
assets and is amortized over 40 years using the straight-line method.
8
CARROLS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS (continued)
The following proforma results of operations for the three months
ended March 31, 1998 assume this acquisition occurred as of the
beginning of the period:
Revenues $ 105,060,000
Income from operations $ 7,697,000
Net income $ 715,000
The preceding proforma financial information is not
necessarily indicative of the operating results that would
have occurred had the acquisition been consummated as of the
beginning of the period, nor are they necessarily indicative
of future operating results.
6. Extraordinary Loss
------------------
On February 12, 1999, we entered into a new senior credit facility
with Chase Bank of Texas, National Association, as agent and lender,
and other lenders as parties thereto. In connection with this
transaction, we have recognized an extraordinary loss of $940,000, net
of $885,000 in income taxes, in the first quarter of 1999. This loss
represents the write-off of unamortized debt issue costs related to
the previous senior credit facility.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Overview
- --------
As of March 31, 1999, we operated 344 Burger King restaurants located in 13
Northeastern, Midwestern and Southeastern states and owned and operated 41
Pollo Tropical restaurants in Florida. In addition, at March 31, 1999, we
franchised 23 Pollo Tropical restaurants in the Caribbean, Central and South
America and Miami. In July 1998, the Company acquired Pollo Tropical, Inc.
which owned and operated 36 restaurants. Since March 31, 1998, the Company has
built 9 Burger King restaurants and closed four under-performing Burger King
restaurants.
Results of Operations
- ---------------------
The following table sets forth, for the three months ended March 31, 1999 and
1998, selected operating results as a percentage of restaurant sales:
1999 1998
-------- -------
Restaurant sales:
Burger King restaurants 79.8% 100.0%
Pollo Tropical 20.2 -
-------- -------
100.0 100.0
Costs and expenses:
Cost of sales 30.0 29.0
Restaurant wages and related expenses 30.8 30.6
Other restaurant expenses including advertising 24.9 25.5
General and administrative 5.7 4.3
Depreciation and amortization 5.5 4.8
-------- -------
Income from restaurant operations 3.1% 5.8%
======== =======
Restaurant Sales
- ----------------
Restaurant sales for the three months ended March 31, 1999, increased 19.7% to
$104.7 million from $87.5 million in the first quarter of 1998. The increase in
sales was primarily the result of the acquisition of Pollo Tropical restaurants
in July 1998, whose total restaurant sales were $21.1 million in the first
quarter of 1999. Sales at our comparable Burger King restaurants (those units
operating for the entirety of the compared periods) decreased 6.5% for the
first quarter of 1999 as compared to an increase of 7.2% for the first quarter
of 1998.
10
Operating Costs and Expenses
- ----------------------------
Cost of sales (food and paper costs), as a percentage of restaurant sales, were
30.0% for the first quarter of 1999 compared to 29.0% for the first quarter of
1998. The increase in the first quarter of 1999 was due to higher cost of sales
at our Pollo Tropical restaurants, relative to our Burger King restaurants.
Pollo Tropical's cost of sales were 35.0% for the first quarter of 1999 compared
to 28.7% for our Burger King restaurants. This increased total cost of sales,
as a percentage of sales, by 1.2%. Lower cost of sales, as a percentage of
sales, at our Burger King restaurants was primarily due to a 4.1% decline in
beef costs in the first quarter of 1999 compared to the first quarter of 1998.
Restaurant wages and related expenses increased as a percentage of sales during
the first quarter to 30.8% in 1999 from 30.6% in 1998. This increase was due to
the effect of lower sales volumes for the first quarter of 1999 on fixed labor
and a 3.6% increase in our average hourly labor rate for the first quarter at
our Burger King restaurants. Collectively, these factors caused as a percentage
of total sales, a 1.8% increase in restaurant wages and related expenses. This
increase was substantially offset by Pollo Tropical's lower restaurant wages,
as a percentage of sales, due to Pollo Tropical's higher average unit volumes.
Pollo Tropical restaurants wages and related expenses were 23.0% of restaurant
sales in the first quarter of 1999.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Other restaurant operating expenses, including advertising, decreased from
25.5% of restaurant sales in the first quarter of 1998 to 24.9% in the first
quarter of 1999, due to Pollo Tropical's other restaurant operating expenses
being 16.1% of restaurant sales in the first quarter of 1999. This caused a
1.9% decrease, as a percentage of sales, in total other restaurant operating
expenses. This decrease was offset by the effect of lower sales volumes on
fixed costs in the first quarter of 1999 for our Burger King restaurants,
particularly utility and occupancy costs. Other operating expenses, including
advertising, increased to 27.2% of restaurant sales for our Burger King
restaurants in the first quarter of 1999.
Administrative expenses increased, as a percentage of sales, from 4.3% in the
first quarter of 1998 to 5.7% in the first quarter of 1999. This increase is
due to lower sales volumes in our Burger King restaurants in the first quarter
of 1999, increased corporate expenses to support our plans for continued
expansion and administrative functions acquired in the July 1998 acquisition of
Pollo Tropical.
Earnings before interest, taxes, depreciation and amortization and non-cash
extraordinary items ("EBITDA") was $9.2 million in the first quarter of 1999
compared to $9.3 million in the first quarter of 1998. As a percentage of total
revenues, EBITDA decreased from 10.6% in the first quarter of 1998 to 8.8% in
the first quarter of 1999 as a result of the factors discussed above.
Depreciation and amortization increased $1.6 million in the first quarter of
1999 due to the increase in property and equipment, goodwill and purchased
intangibles from the purchase of Pollo Tropical in July 1998.
Interest expense was $5.7 million in the first quarter of 1999 compared to $4.3
million in the first quarter of 1998 and increased as a result of the
higher average debt balances from the funding of the acquisition of Pollo
Tropical in July 1998. This was offset somewhat by the favorable effect of the
Company's 1998 refinancing activities on its average interest rates.
The benefit for income taxes of $1,148,000 in the first quarter of 1999 is
based on an estimated effective income tax rate for 1998 of 50%. This rate is
higher than the Federal statutory tax rate due to state franchise taxes and
non-deductible amortization of franchise rights and other intangible assets.
Liquidity and Capital Resources
- -------------------------------
We do not have significant receivables or inventory and receive trade credit
based upon negotiated terms in purchasing food products and other supplies. We
are able to operate with a substantial working capital deficit because (i)
restaurant operations are conducted on a cash basis (ii) rapid turnover allows
a limited investment in inventories, and (iii) cash from sales is usually
received before related accounts for food, supplies and payroll become due. Our
cash requirements arise primarily from the need to finance the opening and
equipping of new restaurants, ongoing capital reinvestment in our existing
restaurants, the acquisition of existing Burger King restaurants, and for
servicing our debt.
12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
The Company's operations in the first quarter generated approximately $8.4
million in cash in 1999, compared with $5.5 million in 1998.
Capital expenditures represent a major investment of cash for the Company, and
totaled $10.7 million in the first quarter of 1999 and $6.9 million in the
first quarter of 1998. First quarter 1999 capital expenditures included $3.3
million for the purchase of the land and building for two Pollo Tropical
restaurants that were previously leased. 1998 capital expenditures included
$0.6 million for the acquisition of two Burger King restaurants.
The sale and leaseback of two Burger King restaurant properties in March 1998
generated proceeds of $1.7 million which
reduced outstanding debt.
On February 12, 1999, we replaced our previous senior credit facility. Under
our new senior credit facility, Chase Bank of Texas, National Association, as
agent, along with a syndicate of five other lenders, have provided a term loan
facility of $50.0 million, of which $49.3 million is outstanding at March 31,
1999 and a revolving credit facility under which we may borrow up to $100.0
million, $60.7 million of which is available at March 31, 1999 after reserving
for a $1.2 million letter of credit guaranteed by the facility. At March 31,
1999, we had a total outstanding borrowings of $260.0 million comprised of
$170.0 million of unsecured 9.5% senior subordinated notes, total borrowings
under our senior credit facility of $87.4 million and other debt of $2.6
million.
In 1999, we anticipate capital expenditures of approximately $40 million,
excluding the cost of any acquisitions that we may make. These amounts include
approximately $12 million for construction of new Burger King restaurants,
including real estate; $5 million for construction of new Pollo Tropical
restaurants; and $12 million for ongoing reinvestment and remodeling of our
existing restaurants. We are also in the process of upgrading our restaurant
point-of-sale systems, our in-restaurant support systems and our corporate
information systems. In 1999, we anticipate that we will incur expenditures of
up to $11 million related to these systems projects. We are committed at March
31, 1999 to purchase approximately $8.3 million of restaurant point-of-sale
systems.
Interest payments under our outstanding indebtedness will represent significant
liquidity requirements for us. We believe cash generated from our operations and
availability under our senior credit facility will provide sufficient cash
availability to cover our working capital needs, capital expenditures, planned
development and debt service requirements for the next 12 months.
13
Inflation
- ---------
The inflationary factors which have historically affected our results of
operations include increases in food and paper costs, labor and other operating
expenses. Wages paid in our restaurants are impacted by changes in the Federal
or state minimum hourly wage rates. Accordingly, changes in the Federal or
states minimum hourly wage rate directly affect our labor cost. We and the
restaurant industry typically attempt to offset the effect of inflation, at
least in part, through periodic menu price increases and various cost reduction
program. However, no assurance can be given that we will be able to offset such
inflationary cost increases in the future.
Year 2000
- ---------
We recognize the need to ensure our operations will not be adversely impacted
by Year 2000 software failures. We have addressed this risk to the availability
and integrity of financial systems and the reliability of operating systems. We
have projects underway for the installation of new point-of-sale (POS) systems
in our restaurants, although substantially all of our existing POS systems will
operate through the change to Year 2000, and for the replacement of a
substantial portion of our corporate financial and decision support systems.
The primary purpose of these projects is to improve the efficiency of our
restaurant and support operations. However, they will also provide the
additional benefit of making our systems Year 2000 compliant where necessary.
We have purchased point-of-sale hardware and software, and a suite of corporate
financial software applications all of which are designed and warranted to be
Year 2000 compliant. The total cost of these capital projects is anticipated to
be approximately $14 million. Through March 31, 1999, we have expended $5.5
million associated with these projects. The majority of the remaining
expenditures pertain to restaurant point-of-sale hardware.
As of March 31, 1999, we had successfully implemented certain corporate
financial applications including general ledger, accounts payable and asset
management, as well as all salaried payroll and human resource processing. The
remaining significant corporate support systems to be implemented are hourly
restaurant payroll and human resources, anticipated to begin production during
the second quarter of 1999, and sales and inventory accounting systems which
are anticipated to begin implementation by the third quarter of 1999. We believe
that all of our computer systems will be Year 2000 compliant by October 1999.
In addition to our internal efforts, we are also monitoring certain initiatives
of Burger King Corporation ("BKC") as they evaluate Year 2000 readiness of food
and equipment suppliers, utility companies and other key suppliers to the
Burger King system. Although BKC has not made any representations or warranties
with respect to such activities, they are providing us the results of third
party validations of the readiness of existing equipment used in the
restaurants, summarized responses from shared vendors and domestic
14
contingency plans. We have also been closely monitoring the remediation
progress of our major food supplier and working closely with it to successfully
interface our ordering and delivery systems as changes are made to these
systems.
We have not completely developed a detailed contingency plan due to the
anticipated implementation dates associated with our planned systems
conversions. We are evaluating our implementation progress on an ongoing basis
and are currently developing a contingency plan which will address upgrading
certain existing systems, should our scheduled implementation dates be
modified or if the Burger King results warrant enhanced contingency planning.
While we are monitoring the progress of our key suppliers, we cannot be assured
that their remediation efforts will be successful, in which case we could be
adversely impacted by our ability to obtain food supplies for our restaurants.
In the event that the remediation efforts of our suppliers are not successful,
we believe that we could alternatively process orders to obtain food supplies
for our restaurants manually. Should we be unable to process orders, we believe
that the time required by our key suppliers to implement corrective actions,
when combined with our inventory levels, would not result in a material
disruption to our restaurant operations.
15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There were no material legal proceedings commenced by or
initiated against the Company during the reported quarter or
material developments in any previously reported litigation.
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8K
a. The following exhibit is filed as part of this report.
Exhibit No.
-----------
27 Financial Data Schedule
b. There were not reports on Form 8-K filed during the
reported quarter.
SIGNATURE
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.
CARROLS CORPORATION
968 James Street
Syracuse, New York 13203
(Registrant)
Date: May 17, 1999 /s/ Alan Vituli
-----------------------------------------------
(Signature)
Alan Vituli
Chairman and Chief Executive Officer
Date: May 17, 1999 /s/ Paul R. Flanders
-------------------------------------------------
(Signature)
Paul R. Flanders
Vice President - Finance (Principal Financial Officer
and Principal Accounting Officer)
17