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 December 31, 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
January 30, 1997, 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 December 31 June 30
1996 1996
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ASSETS
CURRENT ASSETS
Accounts and notes receivable $ 832 619
Inventories 10,667 10,087
Deferred income taxes 2,434 2,434
Other current assets 2,841 579
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TOTAL CURRENT ASSETS 16,774 13,719
PROPERTY, PLANT AND EQUIPMENT 240,966 245,424
Less allowances for depreciation and unit 118,021 116,412
closings
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NET PROPERTY, PLANT AND EQUIPMENT 122,945 129,012
OTHER ASSETS 6,949 5,549
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TOTAL ASSETS $146,668 $148,280
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 8,814 8,387
Accrued interest 1,352 3,588
Accrued expenses 21,150 22,494
Current portion of long-term debt 7,500 6,000
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TOTAL CURRENT LIABILITIES 38,816 40,469
LONG-TERM DEBT, less current portion 24,630 25,700
DEFERRED INCOME TAXES 4,168 3,768
RESERVE FOR UNIT CLOSINGS 4,052 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
December 31, 1996 and at June 30, 1996 19,096 19,096
Additional paid-in capital 18,555 18,555
Retained earnings 37,351 35,642
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TOTAL SHAREHOLDERS' EQUITY 75,002 73,293
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $146,668 $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)
Three Months Ended Six Months Ended
December 31 December 31
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1996 1995 1996 1995
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Net Sales $ 77,469 $ 75,807 $152,969 $150,947
Cost and expenses:
Cost of sales 44,468 43,068 88,883 85,888
Other operating expenses 25,028 25,287 50,415 50,234
General and administrative 2,676 2,810 5,477 7,044
expenses
Interest expense 806 1,016 1,528 2,044
Other expense (income) (95) (33) (157) 145
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72,883 72,148 146,146 145,355
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INCOME BEFORE INCOME TAXES 4,586 3,659 6,823 5,592
Provision for income taxes 1,743 1,389 2,593 2,124
NET INCOME $ 2,843 $ 2,270 $ 4,230 $ 3,468
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Weighted average number of
shares outstanding 10,503 10,335 10,503 10,334
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Net income per share $ .27 $ .22 $ .40 $ .34
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Cash dividends per share $ .12 $ .12 $ .24 $ .24
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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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Six Months Ended December 31 1996 1995
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OPERATING ACTIVITIES
Net income $ 4,230 $ 3,468
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 6,079 6,512
Costs associated with reserved units (845) (334)
Provision for deferred income taxes 400 845
Loss on sale of assets 82 425
Pension expense -- net of contributions (1,419) 377
Change in operating assets and liabilities (3,261) 471
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NET CASH PROVIDED BY OPERATING ACTIVITIES 5,266 11,764
INVESTING ACTIVITIES
Purchase of property, plant and equipment (3,189) (4,381)
Proceeds from sale of property, plant and equipment 14 109
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CASH USED IN INVESTING ACTIVITIES (3,175) (4,272)
FINANCING ACTIVITIES
Payments on short-term debt due to banks -- net --- (6,089)
Payments on long-term debt -- net 430 ---
Proceeds from sales of Common Stock --- 1,081
Dividends paid (2,521) (2,484)
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NET CASH USED IN FINANCING ACTIVITIES (2,091) (7,492)
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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
NOTE TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
Piccadilly Cafeterias, Inc.
December 31, 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 Second Quarter Compared to 1996 Second Quarter
On October 1, 1996, the Company implemented a price increase. Same-
store cafeteria traffic increased 0.7% over the prior year while sales
increased 4.6%. Total cafeteria traffic decreased 0.7%. Same-store
sales for Ralph & Kacoo's seafood restaurants decreased 4.7% as sales
were impacted by a normal leveling of volume at the Birmingham, Alabama
restaurant, which opened in April, 1995. The cafeteria in Chicago,
Illinois was closed on November 15, 1996 and a cafeteria in Tampa,
Florida was closed on December 31, 1996 in conjunction with the lease
expiration.
Cost of sales as a percentage of sales increased 0.6% over the prior
year. Food cost increased 0.2% from inflationary pressures and labor
cost increased 0.4%, reflecting increased staffing aimed at enhanced
customer service combined with the new minimum wage.
Other operating expense as a percentage of sales decreased 1.1% over
the prior year reflecting decreases in depreciation and workers
compensation costs. Interest expense decreased $210,000 reflecting
both lower debt levels and lower cost of debt.
Six Months Ended 12/31/96 Compared to Six Months Ended 12/31/95
Same-store cafeteria traffic increased 1.8% over the prior year as
total customer traffic increased 0.6%. Sales for cafeterias open in
both six-month periods increased 3.8%. Same-store sales for Ralph &
Kacoo's decreased 7.8%.
Cost of sales as a percentage of sales increased 1.2% over the prior
year. Food and labor cost both increased 0.6%. Prior year general and
administrative expense includes severance charges of $1,300,000
relating to the elimination of about 100 jobs. Other expense (income)
improved $302,000 over the prior year as a result of $343,000 in losses
from asset dispositions in the prior year.
Net cash provided by operating activities decreased $6,498,000. The
Company contributed $2,500,000 to its pension plan during the current
year first quarter. No contributions were made in the first two
quarters of fiscal 1996. Costs associated with reserve units increased
$664,000 as the Company paid lease termination costs of $500,000. Net
changes in other operating assets and liabilities resulted from the
payment of $3,272,000 in settlement of taxes and interest associated
with the IRS examinations of the Company's tax returns for 1987 through
1992.
As of December 31, 1996, a total of $18,370,000 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
The Annual Meeting of the shareholders of Piccadilly Cafeterias,
Inc. (the "Meeting") was held on November 4, 1996 and 9,060,607
shares were represented. The voting tabulation follows:
The election of the following to the Board of Directors:
For Withheld
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Robert P. Guyton 8,955,580 105,027
Edward M. Simmons, Sr. 8,955,002 105,605
Christel C. Slaughter 8,914,054 146,553
The following director's terms of office continued after the Meeting:
Norman Francis, Julia H.R. Hamilton, Ronald A. LaBorde, Paul W.
Murrill, Dale E. Redman, and C. Ray Smith.
Item 5. Other information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Articles of Incorporation of the Registrant (1), as amended on
September 14, 1987 (2), as amended on September 27, 1988 (3),
and as amended on September 28, 1989 (4).
3.2 By-Laws of the Company, as amended through July 22, 1996 (5).
27 Financial Data Schedule
(b) Reports on Form 8-K -- None.
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(1) 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.
(2) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1987.
(3) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1988.
(4) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1989.
(5) Incorporated by reference from the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996.
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.
/s/ 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
January 30, 1997
/s/ Ronald A. LaBorde 01/30/97
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Ronald A. LaBorde, President, Chief Executive, Officer, Date
and Director
/s/ J. Fred Johnson 01/30/97
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J. Fred Johnson, Executive Vice President, Chief Date
Financial Officer and Treasurer (Principal Financial Officer)
/s/ Mark L. Mestayer 01/30/97
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Mark L. Mestayer, Executive Vice President, Secretary Date
& Director of Finance (Principal Accounting Officer)