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, 1996
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[ ] Transition report pursuant to section 13 or 15(d) of the securities
exchange act of 1934
For the transition period from to
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Commission file number: 0-9037
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Piccadilly Cafeterias, Inc.
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(Exact name of registrant as specified in its charter)
Louisiana 72-0604977
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(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
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Not applicable
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(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 1, 1996, was 10,503,368.
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
1996 1996
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ASSETS
CURRENT ASSETS
Accounts and notes receivable $ 592 $ 619
Inventories 10,093 10,087
Deferred income taxes 2,434 2,434
Other current assets 307 579
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TOTAL CURRENT ASSETS 13,426 13,719
PROPERTY, PLANT AND EQUIPMENT 242,988 245,424
Less allowances for depreciation and unit closings 116,052 116,412
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NET PROPERTY, PLANT AND EQUIPMENT 126,936 129,012
OTHER ASSETS 7,462 5,549
TOTAL ASSETS $147,824 $148,280
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 8,990 $ 8,387
Accrued interest 3,285 3,588
Accrued expenses 19,719 22,494
Current portion of long-term debt 7,500 6,000
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TOTAL CURRENT LIABILITIES 39,494 40,469
LONG-TERM DEBT, less current portion 26,540 25,700
DEFERRED INCOME TAXES 3,968 3,768
RESERVE FOR UNIT CLOSINGS 4,402 5,050
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 10,503,368 shares at September 30,1996
and at June 30, 1996 19,096 19,096
Additional paid-in capital 18,555 18,555
Retained earnings 35,769 35,642
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TOTAL SHAREHOLDERS' EQUITY 73,420 73,293
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $147,824 $148,280
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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 1996 1995
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Net sales $ 75,500 $ 75,140
Cost and expenses:
Cost of sales 44,415 42,820
Other operating expense 25,387 24,947
General and administrative expense 2,801 4,234
Interest expense 722 1,028
Other expense (income) (62) 178
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73,263 73,207
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INCOME BEFORE INCOME TAXES 2,237 1,933
Provision for income taxes 850 735
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NET INCOME $ 1,387 $ 1,198
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Weighted average number of shares outstanding 10,503 10,333
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Net income per share $ .13 $ .12
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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 1996 1995
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OPERATING ACTIVITIES
Net income $ 1,387 $ 1,198
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 3,059 3,257
Costs associated with reserved units (651) (273)
Provision for deferred income taxes 200 292
Loss on sale of assets 42 330
Pension expense -- net of contribtutions (1,960) 330
Change in operating assets and liabilities (2,051) 1,354
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NET CASH PROVIDED BY OPERATING ACTIVITIES 26 6,488
INVESTING ACTIVITIES
Purchase of property, plant and equipment (1,113) (2,812)
Proceeds from sale of property, plant and
equipment 7 81
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CASH USED IN INVESTING ACTIVITIES (1,106) (2,731)
FINANCING ACTIVITIES
Payments on short-term debt due to banks -- net --- (2,657)
Proceeds from long-term debt -- net 2,340 ---
Proceeds from sales of Common Stock --- 138
Dividends paid (1,260) (1,238)
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,080 (3,757)
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Increase (decrease) in cash and cash equivalents --- ---
Cash and cash equivalents at beginning of period --- ---
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Cash and cash equivalents at end of period $ --- $ ---
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See Note to Condensed Consolidated Financial Statements (Unaudited)
NOTE TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
Piccadilly Cafeterias, Inc.
September 30, 1996
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
1997 First Quarter Compared to 1996 First Quarter
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Same-store cafeteria traffic increased 2.7% over the prior year
as total customer traffic increased 1.8%. Sales for cafeterias
open in the first quarter of both years increased 2.9%. Sales
for Ralph & Kacoo's seafood restaurants decreased 13.8% as same-
store sales were impacted by normal declines in new-unit volumes
at the Birmingham, Alabama restaurant, which opened in April,
1995. One cafeteria in Greensboro, North Carolina and one
restaurant in Houston, Texas were closed in July, 1996. The
closing of these units had no material impact on the earnings of
the current year as the estimated losses were provided for by the
Company in the fourth quarter of fiscal 1996.
Cost of sales as a percentage of sales increased 1.8% over the
prior year. Food cost increased 1.0%, primarily from
inflationary pressures, and labor cost increased 0.8%, reflecting
increased staffing aimed at enhanced customer service. On
October 1, 1996, the Company implemented a price increase to
offset these higher costs and the new minimum wage.
Other operating expense as a percentage of sales increased 0.4%
over the prior year reflecting increases in repairs and maintance
costs and pension and health insurance costs. Prior year general
and administrative expense includes severance charges of
$1,300,000 relating to the elimination of approximately 100 jobs.
Interest expense decreased $306,000 reflecting both lower debt
levels and lower cost of debt. Other expense (income) improved
$240,000 over the prior year as a result of a $288,000 decrease
in losses from asset dispositions.
Net cash provided by operating activities decreased $6,462,000.
The Company contributed $2,500,000 to its pension plan during the
quarter. No contributions were made in the first quarter of
fiscal 1996. Costs associated with reserve units increased
$378,000 as the Company paid lease termination costs of $500,000.
Net changes in other operating assets and liabilities from period
to period resulted in a decrease to cash flow of $3,405,000
reflecting timing of payments in the normal course of business.
As of September 30, 1996, $15,960,000 was available under two
line of credit arrangements. These facilities, together with
cash flow from operations, are adequate to provide for future
requirements.
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
3.1 Articles of Incorporation of the Registrant <F1>, as amended on
September 14, 1987 <F2>, as amended on September 27, 1988 <F3>,
as amended on September 28, 1989 <F4>.
3.2 By-laws of the Company, as amended through July 22, 1996.
27 Financial Data Schedule
(b) Reports on Form 8-K -- None.
[FN]
<F1> Incorporated by reference from the Registrant's Registration Statement
on Form S-1 (Registration No. 2-63249) filed with the Commission on
December 19, 1978.
<F2> Incorporated by reference from the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1987.
<F3> Incorporated by reference from the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1988.
<F4> Incorporated by reference from the Registrant's Annuak Report on Form
10-K for the fiscal year ended June 30, 1989.
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.
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(Registrant)
By: /s/Ronald A. LaBorde
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Ronald A. LaBorde
President and Chief
Executive Officer
November 6, 1996
/s/ Ronald A. LaBorde 11/6/96
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Ronald A. LaBorde, President, Chief Executive Date
Officer, and Director
/s/ J. Fred Johnson 11/6/96
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J. Fred Johnson, Executive Vice President, Date
Financial Officer and Treasurer
(Principal Financial Officer)
/s/ Mark L. Mestayer 11/6/96
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Mark L. Mestayer, Executive Vice President, Date
Secretary & Director of Finance
(Principal Accounting Officer)