FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] Quarterly report pursuant to section 13 or 15(d) of the
securities exchange act of 1934
For the quarterly period ended September 30, 1994
________________________
[ ] 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: 0-9037
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Piccadilly Cafeterias, Inc.
___________________________________________________________________
(Exact name of registrant as specified in its charter)
Louisiana 72-0604977
_______________________________ _______________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3232 Sherwood Forest Blvd., Baton Rouge, Louisiana 70816
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (504)293-9440
_________________
Not applicable
____________________________________________________________________
(Former name, former address and former fiscal year, if changed
since last report)
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 [ ]
The number of shares outstanding of Common Stock, without par
value, as of November 7, 1994, was 10,154,843.
PART I -- Financial Information
Item 1. Financial Statements (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
Piccadilly Cafeterias, Inc.
(Amounts in thousands)
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Balances at September 30 June 30
1994 1994
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ASSETS
CURRENT ASSETS
Accounts and notes receivable $ 551 $ 579
Inventories 10,201 10,108
Income taxes recoverable 1,107 1,320
Deferred income taxes 1,494 1,494
Other current assets 1,535 1,400
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TOTAL CURRENT ASSETS 14,888 14,901
PROPERTY, PLANT AND EQUIPMENT 240,754 229,191
Less allowances for depreciation 96,080 94,461
Less allowances for unit closings 1,337 1,357
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NET PROPERTY, PLANT AND EQUIPMENT 143,337 133,373
OTHER ASSETS 6,708 6,499
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TOTAL ASSETS $164,933 $154,773
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt due to banks $ 12,177 $ ---
Current portion of long-term debt 10,500 11,250
Accounts payable 16,245 18,004
Accrued expenses 12,266 11,360
Reserve for unit closings 328 350
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TOTAL CURRENT LIABILITIES 51,516 40,964
LONG-TERM DEBT, less current portion 24,000 24,000
DEFERRED INCOME TAXES 7,733 7,433
RESERVE FOR UNIT CLOSINGS, less current portion 6,061 6,502
SHAREHOLDERS' EQUITY
Preferred Stock, no par value; authorized 50,000,000
shares; issued and outstanding: none
Common Stock, no par value, stated value $1.82 per share; --- ---
authorized 100,000,000 shares; issued and outstanding
10,141,399 shares at September 30, 1994 and
10,131,784 shares at June 30, 1994 18,438 18,421
Additional paid-in capital 16,396 16,324
Retained earnings 40,789 41,129
_____________________________________________________________________________________
TOTAL SHAREHOLDERS' EQUITY 75,623 75,874
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $164,933 $154,773
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See Note to Condensed Consolidated Financial Statements (Unaudited)
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Piccadilly Cafeterias, Inc.
(Amounts in thousands - except per share data)
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Three Months Ended September 30 1994 1993
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Net sales $ 70,779 $ 69,064
Cost and expenses:
Cost of sales 40,583 39,033
Other operating expense 23,981 22,889
General and administrative expense 3,656 3,437
Interest expense 781 831
Other expense (income) 341 (323)
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69,342 65,867
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INCOME BEFORE INCOME TAXES 1,437 3,197
Provision for income taxes 560 1,247
NET INCOME $ 877 $ 1,950
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Weighted average number of shares outstanding 10,141 9,995
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Net income per share $ .09 $ .20
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Cash dividends per share $ .12 $ .12
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See Note to Condensed Consolidated Financial Statements (Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Piccadilly Cafeterias, Inc.
(Amounts in thousands)
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Three Months Ended September 30 1994 1993
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OPERATING ACTIVITIES
Net income $ 877 $ 1,950
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 3,049 2,897
Costs associated with reserved units (364) (432)
Provision for deferred income taxes 300 ---
Loss (gain) on sale of assets 371 (184)
Pension contributions in excess of pension expense (255) (388)
Change in operating assets and liabilities (794) 2,354
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NET CASH PROVIDED BY OPERATING ACTIVITIES 3,184 6,197
INVESTING ACTIVITIES
Purchase of property, plant and equipment (13,513) (5,705)
Proceeds from sale of property, plant and equipment 29 983
_____________________________________________________________________________________
CASH USED IN INVESTING ACTIVITIES (13,484) (4,722)
FINANCING ACTIVITIES
Proceeds from short-term debt due to banks 12,177 ---
Common stock transactions 89 61
Payments on long-term debt (750) (750)
Dividends paid (1,216) (1,199)
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NET CASH PROVIDED(USED) IN FINANCING ACTIVITIES 10,300 (1,888)
_____________________________________________________________________________________
Increase (decrease) in cash and cash equivalents -- (413)
Cash and cash equivalents at beginning of period -- 14,094
Cash and cash equivalents at end of period $ --- $ 13,681
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See Note to Condensed Consolidated Financial Statements (Unaudited)
NOTE TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
Piccadilly Cafeterias, Inc.
September 30, 1994
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q and
do not include all of 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 have been included.
Comparative results of operations by periods may be affected by the
timing of the opening of new units. Quarterly results are additionally
affected by seasonal fluctuations in customer volume. Customer volume
at established units is generally higher in the second quarter ended
December 31 and lower in the third quarter ending March 31 reflecting
the general seasonal retail activity. A fluctuation in customer volume
has a disproportionate effect on operating profit.
Item 2.Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Company has revised its capital expenditure plans for fiscal year
1995. The Company had anticipated opening eight to ten new units and
completing remodels to 25 to 30 units at a total cost of $40 million to
$45 million. Total capital expenditures are now estimated to be $27
million to $30 million. In addition to the three new cafeterias
completed in the first quarter of this fiscal year, two new cafeterias
and one seafood restaurant are anticipated to be completed by the end of
the fiscal year. Through September 30, 1994, four remodels have been
completed and nine more are anticipated to be completed by the end of
the fiscal year. Although the remodel program has increased customer
counts on the whole, results at individual units are mixed. The Company
has elected not to proceed with its five-year program to remodel all of
its cafeterias to the deluxe cafeteria theme, but will continue to
refurbish units on an as-needed basis. The following table presents a
summary of capital expenditures for the quarters ended September 30,
1994 and 1993:
(Amounts in thousands-except number of units)
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Quarter Ended September 30 1994 1993
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Amounts Units Amounts Units
New units opened $6,201 3 $1,634 1
Remodels completed 3,354 4 --- ---
Net increase(decrease) in
construction in-progress 8 3,041
Land purchases 2,455 1,016
Other 1,495 14
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Total capital expenditures $13,513 $5,705
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Working capital at September 30, 1994 decreased $10,565,000 from June
30, 1994, primarily due to the level of capital expenditures. The
Company increased its $10 million unsecured short-term line of credit to
$20 million of which, approximately $5,790,000 was available at November
7, 1994. This facility matures on December 31, 1994. The Company has
$10.5 million in debt principal payments that will become due in January
1995. Management anticipates obtaining bank financing to fund maturing
debt and renewing the unsecured short-term line of credit.
The following table summarizes comparable cafeteria customer traffic for
the quarters ended September 30, 1994 and 1993:
(Customers in thousands)
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Quarter Ended September 30 1994 1993 Customer
_________________________________________________________________________ Change
Customers Units Customers Units
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Units open three months in
both periods 11,583 126 11,956 126 -3.1%
Units opened 387 6 (A) 32 1
Units closed 51 1 344 5 (B)
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Total customers 12,021 12,332 -2.5%
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(A) Includes cafeterias opened after July 1, 1992.
(B) Includes cafeterias closed after July 1, 1992.
Cafeteria sales for the first quarter of fiscal year 1995 increased
$1,286,000, or 2.0%, over the prior year first quarter. A price
increase in September 1994, together with price increases in the second
and fourth quarter of fiscal year 1994, were sufficient to offset the
overall customer decline of 2.5%. The overall check average increased
4.5% from $5.11 for the first quarter of fiscal year 1994 to $5.34 for
the comparable period of fiscal year 1995.
Ralph & Kacoo's restaurant sales increased $429,000, or 7.9%, over the
prior year first quarter. The increase is attributable to increased
customer traffic.
Operating profits (net sales less cost of sales and other operating
expenses) slipped to 8.8% of sales for the first quarter of fiscal year
1995 from 10.3% for the comparable period of the prior year. Food costs
and labor costs as a percentage of sales increased 0.8%. Other
operating expenses as a percentage of sales increased 0.7%. Other
operating expenses were adversely impacted by new-unit opening costs for
the three units opened in the first quarter of fiscal year 1995 compared
to new-unit opening costs for only one new unit opened in the first
quarter of the prior year.
General and administrative expenses for the first quarter include
severance benefits totaling $361,000 related to the resignation of James
W. Bennett as Chairman and Chief Executive Officer. The change in other
expense (income) results primarily from a combination of the non-cash
charges resulting from the write-off of certain assets associated with
the Company's remodeling program totaling $329,000 and a gain on sale of
property recorded in the first quarter of the prior year of $275,000.
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 vote of security holders
None.
Item 5. Other information
None.
Item 6.Exhibits and reports on Form 8-K
(a) Exhibits -- None.
(b) Reports on Form 8-K -- None.
SIGNATURES
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.
PICCADILLY CAFETERIAS, INC.
___________________________
(Registrant)
By: /s/ Ronald A. LaBorde
___________________________
Ronald A. LaBorde
Executive Vice President
November 10, 1994
/s/ Malcolm T. Stein, Jr. 11/10/94
__________________________________________________ ________
Malcolm T. Stein, Jr., President, Chief Operating Date
Officer, and Director*
/s/ James E. Durham, Jr. 11/10/94
__________________________________________________ ________
James E. Durham, Jr., Senior Executive Vice Date
President, and Director*
/s/ Ronald A. LaBorde 11/10/94
__________________________________________________ ________
Ronald A. LaBorde, Executive Vice President, Date
Treasurer, Chief Financial Officer, Principal
Financial Officer, and Director*
/s/ Mark L. Mestayer 11/10/94
__________________________________________________ ________
Mark L. Mestayer, Executive Vice President, Date
Secretary, Controller, and Principal Accounting
Officer
* Member of the Management Committee (Co-Principal Executive Officer).