UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
_____________________
Date of Report (DATE OF EARLIEST EVENT REPORTED) November 18, 1999
Piccadilly Cafeterias, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Louisiana 1-11754 72-0604977
(STATE OF INCORPORATION) (COMMISSION FILE NUMBER) (IRS EMPLOYER
IDENTIFICATION NO.)
3232 Sherwood Forest Boulevard, Baton Rouge, Louisiana 70816
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(225) 293-9440
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
ITEM 5. OTHER EVENTS.
As previously reported in the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 1999, the Company has a
credit facility with a syndicated group of banks maturing on June 22,
2001. The credit facility contained covenants that limited the level of
funded debt and required minimum coverage of fixed charges, among others.
At September 30, 1999 and as a direct result of the Company's operating
performance for the twelve months then ended, the Company was not in
compliance with the two aforementioned covenants of the credit facility.
On November 18, 1999 the Company and its lenders amended the credit
facility to revise these covenants effective September 30, 1999, such
that the Company was in compliance with all covenants as of September 30,
1999.
The financial covenants, as amended, are designed to correspond with
the Company's projected performance over the remaining term of the credit
facility. Negative variance from projected performance with respect to
sales, operating performance, or other unforeseen matters may cause the
Company to be in non-compliance with those covenants. Failure to meet
these covenants could result in the Company being placed in default of
the amended credit facility.
As amended, the credit facility provides for: (i) an increase in the
effective interest rate from LIBOR plus 175 basis points to LIBOR plus
300 basis points, and an increase to the fees payable with respect to
letters of credit, with the amount of the interest rate and letter of
credit fees subject to adjustment at the end of each fiscal quarter based
on the Company's ratio of total debt to EBITDA; (ii) mandatory step downs
in the total amount of credit available under the facility from
$100,000,000 to $95,000,000 as of the effective date of the amendment,
from $95,000,000 to $90,000,000 on or before March 31, 2000 and from
$90,000,000 to $80,000,000 on or before March 31, 2001, together with
additional mandatory commitment reductions in an amount equal to the net
proceeds in excess of $5 million in the aggregate from sales of certain
assets; (iii) financial covenants with respect to the ratio of total debt
to EBITDA and the fixed charge coverage ratio; (iv) a restriction on the
Company's ability to make capital expenditures; (v) the replacement of
the funded debt to total capital financial covenant with a financial
covenant requiring a minimum adjusted tangible net worth; (vi) a further
restriction commencing with the third fiscal quarter ending March 31,
2000 on the ability of the Company to pay dividends to an amount that
does not exceed the amount of net income for the prior fiscal quarter;
(vii) a prohibition on acquisitions; (viii) the requirement that by
(a) December 15, 1999, the credit facility will be secured by
substantially all owned real properties and related equipment and
fixtures of the Company and (b) March 15, 2000, the credit facility will
be further secured by substantially all the assets of the Company; and
(ix) the payment of an amendment fee to each bank that signs the
amendment.
Because the credit agreement amendment had not been completed when
the Company filed its Quarterly Report on Form 10-Q on November 15, 1999,
the Company was required to classify its outstanding borrowings under the
credit facility as current liabilities. Giving effect to the amendment,
the $76,825,000 classified as "current portion of long-term debt" in the
Company's consolidated balance sheet would be reclassified as "long-term
debt."
With completion of the amended credit facility, on November 18, 1999
the Board declared a quarterly cash dividend of $0.12 per share, payable
January 4, 2000 to stockholders of record on December 3, 1999. The
amended credit facility provides that beginning with the third fiscal
quarter ending March 31, 2000, the Board may only declare a dividend to
the extent of the Company's net income for the prior fiscal quarter. If
this covenant had been applicable to the dividend declared on
November 18, the Company would not have been able to declare the
dividend. Accordingly, the Company's ability to continue to declare
dividends in compliance with the terms of the amended credit facility
will be determined by its future operating performance.
Management believes that its cash from operations, together with
remaining credit available under the amended facility, will be sufficient
to provide for the Company's operational needs for the foreseeable
future. At September 30, 1999, approximately $23,175,000 was available
under this facility.
On November 18, 1999 the Company issued a press release, filed
herewith as Exhibit 99, announcing the execution of the Fourth Amendment
to the Company's Credit Agreement, also filed herewith as Exhibit 10.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
10. Fourth Amendment to Credit Agreement dated November 18,
1999 by and among Piccadilly Cafeterias, Inc., Hibernia
National Bank, Wachovia Bank, N.A., South Trust Bank
National Association, Amsouth Bank, Branch Banking and
Trust Company, Whitney National Bank, BankOne Louisiana,
N.A., The Fuji Bank, Limited, First Tennessee Bank
National Association, and Deposit Guaranty National Bank,
Piccadilly Restaurants, Inc. and Morrison Restaurants Inc.
99. Press release, dated November 18, 1999.
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.
PICCADILLY CAFETERIAS, INC.
By: /S/ RONALD A. LABORDE
Ronald A. LaBorde
Ronald A. LaBorde
President and Chief Executive Officer
Date: November 18, 1999
EXHIBIT INDEX
Exhibit No. Description
10. Fourth Amendment to Credit Agreement dated
November 18, 1999 by and among Piccadilly
Cafeterias, Inc., Hibernia National Bank,
Wachovia Bank, N.A., South Trust Bank National
Association, Amsouth Bank, Branch Banking and
Trust Company, Whitney National Bank, BankOne
Louisiana, N.A., The Fuji Bank, Limited, First
Tennessee Bank National Association, and Deposit
Guaranty National Bank, Piccadilly Restaurants,
Inc. and Morrison Restaurants Inc.
99. Press release, dated November 18, 1999.