SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
[X] Current Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
Date of Report (Date of earliest event reported)
APRIL 12, 2001
NE RESTAURANT COMPANY, INC.
(Exact name of registrant as specified in its charter)
Commission File Number 333-62775
DELAWARE 06-1311266
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5 CLOCK TOWER PLACE, MAYNARD, MASSACHUSETTS 01754
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (978) 897-1400
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N/A
(Former Name or former address, if changed since last report)
Item 5. Other Information
On April 12, 2001, NE Restaurant Company, Inc. (Company) completed its
sale of 40 Chili's and seven On The Border restaurants to the chains' franchisor
Brinker International, Inc. of Dallas, Texas (Brinker) (the Brinker Sale). Total
consideration, subject to closing adjustments, was $93.5 million. Brinker
acquired the inventory, facilities, equipment, management teams associated with
these restaurants, as well as the four Chili's restaurants currently under
development by the Company. Further, Brinker assumed the mortgage debt on the
Company's Chili's and On The Border restaurants. See Item 7.
The statements contained herein that are not historical facts are
forward-looking statements. These forward-looking statements involve risks and
uncertainties and, consequently, could be affected by general business and
economic conditions, the impact of competition, the seasonality of the company's
business, governmental regulations, and inflation.
Item 7. Financial Statements and Exhibits.
(b) Pro forma financial information.
The Proforma Consolidated Balance Sheet as of January 3, 2001
and the Proforma Consolidated Statement of Operations for the
53 Weeks Ended January 3, 2001 presented herein were derived
from the Company's Form 10-K filed March 30, 2001. These
proforma financial statements incorporate the appropriate
adjustments required by Article 11 of Regulation S-X .
[The balance of this page intentionally blank].
NE RESTAURANT COMPANY, INC.
CONSOLIDATED PRO FORMA BALANCE SHEET
(Dollars in thousands)
As of January 3, 2001
As Brinker Sale Pro Forma
Filed (Unaudited) (Unaudited)
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ASSETS
Current Assets:
Cash $7,602 $52,172 $59,774
Credit card receivables 838 - 838
Inventories 1,885 (850) 1,035
Prepaid expenses and other current assets 2,617 (49) 2,568
Assets held for sale - short term 200 - 200
Prepaid and current deferred income taxes 5,433 (55) 5,378
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Total current assets 18,575 51,218 69,793
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Property and Equipment, at cost:
Land and land right 7,858 (5,876) 1,982
Buildings 12,549 (5,953) 6,596
Leasehold improvements 83,973 (37,692) 46,281
Furniture and equipment 50,455 (25,201) 25,254
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154,835 (74,722) 80,113
Less - Accumulated depreciation (40,196) 20,931 (19,265)
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114,639 (53,791) 60,848
Construction work in process 2,917 (338) 2,579
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Net property and equipment 117,556 (54,129) 63,427
Goodwill, net 28,404 - 28,404
Deferred Finance Costs, net 8,025 (2,115) 5,910
Liquor Licenses 3,015 (1,208) 1,807
Deferred Taxes, noncurrent 6,451 (4,853) 1,598
Other Assets, net 1,569 (1,244) 325
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TOTAL ASSETS $183,595 $ (12,331) $171,264
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Mortgage loans payable - current portion $1,541 $ (1,541) $ -
Accounts payable 14,510 978 15,488
Accrued expenses 18,817 (1,098) 17,719
Income taxes payable - 9,784 9,784
Capital lease obligation - current portion 37 (37) -
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Total current liabiliites 34,905 8,086 42,991
Mortgage Loan Payable, net of current portion 39,737 (39,737) -
Bonds Payable, net of current portion 100,000 - 100,000
Deferred Rent and Other Long-Term Liabilities 4,887 (2,633) 2,254
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Total liabilities 179,529 (34,284) 145,245
Commitments and Contingencies
Stockholders' Equity:
Common stock, $.01 par value 37 - 37
Less - Treasury shares (8,088) - (8,088)
Additional paid-in capital 29,004 - 29,004
Retained earnings (Accumulated deficit) (16,887) 21,953 5,066
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Total stockholders' equity 4,066 21,953 26,019
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $183,595 $ (12,331) $171,264
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See Notes to Unaudited Pro Forma Financial Statements.
NE RESTAURANT COMPANY, INC.
CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
(Dollars in thousands except share and per share data)
53 Weeks Ended January 3, 2001
As Brinker Sale Sal & Vinnie's Pro Forma
Filed (Unaudited) Abandonment (Unaudited)
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Net sales $284,933 $ (138,410) $ (2,622) $ 143,901
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Cost of sales and expenses
Cost of sales 74,266 (38,150) (917) 35,199
Operating expenses 162,577 (75,893) (1,668) 85,016
General and administrative expenses 16,386 (4,338) - 12,048
Deferred rent, depreciation, amortization and
preopening expenses 18,127 (6,290) (183) 11,654
Loss on abandonment of Sal & Vinnie's 2,031 - (2,031) -
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Total cost of sales and expenses 273,387 (124,671) (4,799) 143,917
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Income (loss) from operations 11,546 (13,739) 2,177 (16)
Interest expense, net 15,050 (6,471) - 8,579
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Loss before income tax benefit (3,504) (7,268) 2,177 (8,595)
Income tax benefit (115) (2,907) 871 (2,151)
Gain on Brinker Sale, net of income tax - 21,953 - 21,953
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Net income (loss) $ (3,389) $ 17,592 $ 1,306 $ 15,509
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Basic income (loss) per share:
Income (loss) per share before Brinker Sale $ (1.14) (1.46) $ 0.44 $ (2.16)
Gain on Brinker Sale, net of income tax - 7.36 - 7.36
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Basic income (loss) per share $ (1.14) $ 5.90 $ 0.44 $ 5.20
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Weighted Average Shares Outstanding 2,981,414 2,981,414 2,981,414 2,981,414
Diluted income (loss) per share:
Income (loss) per share before Brinker Sale $ (1.14) $ (1.46) $ 0.42 $ (2.16)
Gain on Brinker Sale, net of income tax - 7.11 - 7.11
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Diluted income (loss) per share $ (1.14) $ 5.65 $ 0.42 $ 4.95
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Weighted Average Shares Outstanding 2,981,414 3,087,377 3,087,377 3,087,377
See Notes to Unaudited Pro Forma Financial Statements.
NE RESTAURANT COMPANY, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
1. The pro forma Consolidated Balance Sheet reflects the recognition of the
Brinker Sale as of January 3, 2001.
a. Cash reflects the $93.5 million total consideration less mortgage debt
assumed of $41.3 million.
b. Income tax payable and Deferred Taxes (noncurrent), reflect the tax
liability associated with the gain on the transaction. This liability
is less than the statutory rate of 35% due to the availability of net
operating loss and tax credit carry forwards from prior years.
c. The increase in Retained earnings reflects the gain on the transaction,
net of income tax.
d. The unamortized balances of Finance Costs and Development Fees, as well
as Deferred Rent liability balances, are written off by the Company as
a result of the Brinker Sale.
e. All other adjustments are to reflect assets purchased and liabilities
assumed by Brinker.
2. The abandonment of Sal & Vinnie's occurred in December 2000 and,
accordingly, was previously reported in the Consolidated Balance Sheet as
filed in Form 10-K on March 30, 2001.
3. The pro forma Consolidated Statement of Operations reflects (a) the
recognition of the Brinker Sale; and (b) the abandonment of Sal & Vinnie's
as if the dispositions occurred on December 30, 1999.
a. Operating results of the Brinker restaurants and Sal & Vinnie's for the
fiscal year ended January 3, 2001 are removed for the entire period.
b. The Loss on abandonment of Sal & Vinnie's is removed for the fiscal
year ended January 3, 2001.
c. Gain on sale reflects the gain on the Brinker Sale, net of income tax.
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c) Exhibits
(99) Press release, dated April 12, 2001.
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.
NE RESTAURANT COMPANY, INC.
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(Registrant)
Date: April 27, 2001 By: /s/ Kurt J. Schnaubelt
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Kurt J. Schnaubelt
Vice President - Finance and Chief
Accounting Officer