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, 1997
[ ] 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
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
(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
October 24, 1997, was 10,528,368.
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
1997 1997
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ASSETS
CURRENT ASSETS
Accounts and notes receivable $ 650 $ 611
Inventories 10,572 10,400
Deferred income taxes 3,546 3,546
Other current assets 705 766
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TOTAL CURRENT ASSETS 15,473 15,323
PROPERTY, PLANT AND EQUIPMENT 245,077 246,650
Less allowances for depreciation and unit closings 120,504 120,630
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NET PROPERTY, PLANT AND EQUIPMENT 124,573 126,020
OTHER ASSETS 7,862 5,989
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TOTAL ASSETS $147,908 $147,332
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 11,046 $ 9,579
Accrued expenses 23,217 20,411
Current portion of long-term debt 4,500 4,500
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TOTAL CURRENT LIABILITIES 38,763 34,490
LONG-TERM DEBT, less current portion 22,650 27,240
DEFERRED INCOME TAXES 5,423 5,223
RESERVE FOR UNIT CLOSINGS 2,649 2,775
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
10,528,368 shares at September 30, 1997 and
at June 30, 1997 19,141 19,141
Additional paid-in capital 18,735 18,735
Retained earnings 40,784 39,965
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78,660 77,841
Less treasury stock at cost: 25,000 Common Shares at
September 30, 1997 and at June 30, 1997 237 237
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TOTAL SHAREHOLDERS' EQUITY 78,423 77,604
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $147,908 $147,332
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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 1997 1996
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Net sales $ 78,952 $ 75,500
Cost and expenses:
Cost of sales 46,068 44,415
Other operating expense 26,037 25,387
General and administrative expense 3,075 2,801
Interest expense 619 722
Other expense (income) (142) (62)
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75,657 73,263
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INCOME BEFORE INCOME TAXES 3,295 2,237
Provision for income taxes 1,219 850
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NET INCOME $ 2,076 $ 1,387
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Weighted average number of shares outstanding 10,503 10,503
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Net income per share $ .20 $ .13
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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 1997 1996
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OPERATING ACTIVITIES
Net income $ 2,076 $ 1,387
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,992 3,059
Costs associated with reserved units (315) (651)
Provision for deferred income taxes 200 200
Loss on sale of assets 24 42
Pension expense -- net of contributions (1,917) (1,960)
Change in operating assets and liabilities 4,287 (2,051)
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NET CASH PROVIDED BY OPERATING ACTIVITIES 7,347 26
INVESTING ACTIVITIES
Purchase of property, plant and equipment (3,319) (1,113)
Proceeds from sale of property, plant and equipment 1,825 7
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CASH USED IN INVESTING ACTIVITIES (1,494) (1,106)
FINANCING ACTIVITIES
Proceeds from (payments on) long-term debt - net (4,590) 2,340
Dividends paid (1,263) (1,260)
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NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (5,853) 1,080
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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, 1997
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
1998 First Quarter Compared to 1997 First Quarter
Same-store cafeteria sales increased 3.8% over the prior year. Same-
store customer traffic decreased 1.7%. Same-store sales for Ralph &
Kacoo's seafood restaurants decreased 1.7%.
Cost of sales as a percentage of sales decreased 0.5% over the prior
year. Food cost decreased 0.1% and labor cost decreased 0.4%. On
September 1, 1997, the Company increased prices to offset increases in
the federal minimum wage.
Other operating expense as a percentage of sales decreased 0.7% over
the prior year. Interest expense decreased $103,000 reflecting both
lower debt levels and lower cost of debt. Other income improved
$80,000 over the prior year. The Company lowered its effective tax
rate from 38.0% in fiscal year 1997 to 37.0% for fiscal year 1998.
Net cash provided by operating activities increased $7,321,000. Net
changes in operating assets and liabilities increased cash flow
$6,338,000 reflecting the impact of timing of payments in the ordinary
course of business. Investing activities include the sale of the
Company's Orland Park, Illinois cafeteria, which was closed in
November, 1996.
A cafeteria in Charleston, South Carolina was opened during the
current-year first quarter replacing a mall unit whose lease had
expired. Two Piccadilly Express units located in Associated Grocers
supermarkets were opened in Natchez, Mississippi and Vidor, Texas
during the quarter. The Company will open a cafeteria in Vicksburg,
Mississippi during the second quarter. Expansion plans for the
remainder of the fiscal year include four to five more cafeterias and
up to 16 Piccadilly Express units in existing cafeterias and Associated
Grocer supermarkets.
The Company's $4,500,000 private placement debt will mature on January
31, 1998. As of September 30, 1997, $22,350,000 was available under
two line of credit arrangements. These facilities, together with cash
flow from operations, are adequate to provide for maturing debt,
capital expenditures and dividend 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(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.
**FOOTNOTES**
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.
PICCADILLY CAFETERIAS, INC.
(Registrant)
By:/s/Ronald A. LaBorde
Ronald A. LaBorde
President and Chief Executive Officer
October 27, 1997
/s/ Ronald A. LaBorde 10/27/97
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Ronald A. LaBorde, President, Chief Executive Date
Officer, and Director
/s/ J. Fred Johnson 10/24/97
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J. Fred Johnson, Executive Vice President, Chief Date
Financial Officer and Treasurer
(Principal Financial Officer)
/s/ Mark L. Mestayer 10/24/96
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Mark L. Mestayer, Executive Vice President, Date
Secretary & Director of Finance
(Principal Accounting Officer)