1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (Fee required)
For the fiscal year ended: December 31, 1995 Commission file number: 1-13044
COOKER RESTAURANT CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 69-1292102
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
5500 Village Boulevard, West Palm Beach, Florida 33407
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 615-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of each exchange on which registered
Common Shares, without par value The New York Stock Exchange
Rights to Purchase Class A Junior Participating Preferred Trades with the Common Shares
Shares, without par value
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
6 3/4% Convertible Subordinated Debentures Due 2002
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 / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
/ /
The aggregate market value of Common Shares held by non-affiliates of the
Registrant on March 1, 1996 was $72,632,896.
The number of Common Shares outstanding on March 1, 1996 was 7,151,226.
The following documents have been incorporated by reference into this Form
10-K:
Document Part of Form 10-K
The Registrant's definitive Proxy Statement for its 1996 Annual Meeting Part III
of Shareholders dated March 15, 1996
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PART I
ITEM 1. BUSINESS.
GENERAL
At March 2, 1996, the Registrant owned and operated 39 full service
"Cooker(sm)" restaurants (the "Restaurants") in Ohio, Tennessee, Indiana,
Kentucky, Florida, North Carolina, Georgia, Virginia, Maryland and Michigan. The
Registrant's strategy is to provide consistent food quality, menu variety and
value combined with a special emphasis on service and customer satisfaction. The
Restaurants are designed to provide traditional and comfortable dining
experiences rather than emphasizing a "theme" atmosphere or menu. The
Restaurants feature moderately priced menu items prepared from original recipes
using high quality fresh ingredients. The menu includes appetizers, soups,
salads, chicken, fish, beef and pasta entrees, sandwiches, burgers and desserts,
as well as alcoholic and non-alcoholic beverages. Entree selections range in
price from $4.95 to $14.95.
RESTAURANT OPERATIONS
The Registrant strives to maintain quality control and uniformity in the
Restaurants through careful training and supervision of personnel, use of a
standard Restaurant operations manual relating to preparation of food and
beverages, maintenance of premises and conduct of personnel, and consistent
Restaurant layout and design.
The Restaurants generally offer food service from 11:00 a.m. to 11:00 p.m.,
Sunday through Thursday, and 11:00 a.m. to midnight on Friday and Saturday. All
menu items (other than alcoholic beverages) are available for carry-out.
SERVICE
Management believes that the Registrant's commitment to high standards of
service, quality and value, backed by a guarantee of customer satisfaction, is
the most effective approach to attracting customers. The Registrant focuses its
resources on providing superior service to existing customers in the Restaurants
and relies primarily on word of mouth and the reputation of the Restaurants to
attract new and repeat customers.
The Registrant's commitment to meeting the highest standards of customer
service is reflected in its 1995 labor costs which were 34.9% of 1995 sales,
which the Registrant believes is a higher percentage than that of many other
full service restaurant companies. The Registrant's Restaurants have a general
manager, a kitchen manager and up to six assistant managers, which the
Registrant believes is a higher number of managers per operating unit than that
of many other full service restaurant companies. The Registrant believes its
high level of Restaurant management staffing is important in seeking to meet its
goal of 100% customer satisfaction.
The Registrant hires personnel only after extensive interviews. Prior
restaurant experience is not a prerequisite for employment. Instead, the
Registrant seeks to recruit employees who share the Registrant's commitment to
high standards of customer service and whose personalities are compatible with
the Registrant's philosophy. Each new non-management employee is initially
trained for a minimum of seven to ten days, or longer if hired for a new
Restaurant. New management personnel undergo 90 to 120 days of training.
FOOD AND BEVERAGES
The Restaurants offer a varied menu of approximately 60 items including
appetizers, soups, salads, chicken, fish, beef and pasta entrees, sandwiches,
burgers, desserts, and beverages. Most menu food items are prepared on premises
using fresh ingredients according to original recipes. The Registrant places
special emphasis on the prompt preparation and delivery of food and beverages to
the customers. Each Restaurant offers alcoholic beverages, including liquor,
wine, and beer, which constituted approximately 11% of sales in 1995.
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DESIGN
The Restaurants are designed to be comfortable and functional, with a
casual, contemporary decor featuring wood, brass, and framed graphic art. The
average Restaurant is approximately 7,600 square feet (of which approximately
40% is devoted to kitchen and service areas) with seating for approximately 245
customers. However, seven of the nine Restaurants planned to be opened in 1996
will have in excess of 8,000 square feet and will seat approximately 270
customers. This increase is a result of the size of the existing facilities that
the Registrant plans to convert into Restaurants and does not reflect a
management decision to increase the size of future Restaurants. The majority of
the seating is in booths, which enhances customer privacy and comfort. Each
Restaurant has a separate bar area which has stool and booth seating.
The typical Restaurant kitchen is comparatively large by industry standards
and is designed for quality and speed of food preparation. These kitchens permit
the Registrant to be flexible in the types of food items which can be prepared
and to adapt to changing consumer tastes and preferences.
DEVELOPMENT AND EXPANSION
The Registrant is an Ohio corporation which was the surviving corporation of
the merger of affiliated corporations in 1988. At that time the Registrant
operated six restaurants. The following table sets forth the Registrant's unit
growth since 1988:
YEAR 1989 1990 1991 1992 1993 1994 1995
RESTAURANTS OPEN AT 8 10 12 15 20 29 35
START OF YEAR
RESTAURANTS OPENED 2 2 3 5 9 6 3*
DURING YEAR
The Registrant purchased six properties from a subsidiary of Darden
Restaurants, Inc. for a cash purchase price of approximately $11,200,000 on
January 4, 1996. The properties purchased by the Registrant had been used by
Darden or its subsidiaries and their respective predecessors as "China Coast
Restaurants," but Darden and its subsidiaries, or their predecessors, closed
them prior to putting them up for sale. The Registrant plans to remodel these
properties extensively to conform to its requirements prior to opening them as
Cooker Bar and Grille(R) restaurants in the second quarter of 1996. The funds
used to pay for this purchase were provided by draws on the Registrant's line of
credit from First Union National Bank of Tennessee. See "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION; Liquidity and
Capital Resources".
The Registrant opened three Restaurants and closed one in 1995 and plans to
open nine Restaurants in 1996. The Registrant anticipates that cash on hand
along with funds generated from operations and bank borrowings will be
sufficient to finance these Restaurants. Further expansion will be dependent on,
among other things, the Registrant's future operations, the availability of
capital, desirable site locations, the ability to attract qualified employees,
securing appropriate local government approvals, and future economic conditions.
The Registrant has no definite commitments to develop Restaurants after 1996 and
there can be no assurance that the Registrant will be able to locate and acquire
suitable sites for expansion.
The Registrant considers the specific location of a Restaurant to be
critical to its long-term success and devotes significant effort to the
investigation and evaluation of potential sites. In order to efficiently control
its operations and administrative costs, the Registrant anticipates that further
expansion will be in medium to large size metropolitan areas in the Midwest,
East and Southeast, primarily in areas where the Registrant currently operates
Restaurants. Within these market areas, the Registrant intends to locate
Restaurants in freestanding buildings and in retail developments in proximity to
high density, high traffic, office, residential, and retail areas. To date, the
Reg-
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* The Registrant closed and leased one Restaurant in Florence, Kentucky in 1995
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istrant has developed new Restaurants and has converted existing facilities into
Restaurants. While development costs vary depending on location, the cost of
developing and opening a Restaurant (land, building, fixtures, furnishings,
equipment, and pre-opening expenses) is approximately $2.35 million and the cost
of converting an existing facility into a Restaurant (land, building,
renovation, fixtures, furnishings, equipment, and pre-opening expenses) is
comparable although varies greatly depending on the quality and condition of
the existing facility.
COMPETITION
The food service industry is intensely competitive with respect to price,
service, location, and food quality. Competition within the casual dining
segment of the restaurant industry is expected to remain intense with respect to
price, service, type and quality of food, location and personnel. The
Registrant is not a significant factor in the industry and there are many
well-established competitors with greater financial and other resources than the
Registrant. Such competitors may have been in existence for a substantially
greater period of time than the Registrant and may be better established in the
areas where the Restaurants are or will be located. The restaurant business is
often affected by changes in consumer tastes, economic conditions, population,
traffic patterns, availability of employees, and cost increases.
GOVERNMENT REGULATION
The Registrant's restaurant operations are subject to various health,
sanitation, and safety standards as well as to state and local licensing and
regulation of the sale of alcoholic beverages. A significant portion of the
revenues of the Restaurants is attributable to the sale of alcoholic beverages.
Each Restaurant has a liquor license from state liquor regulatory authorities
allowing it to sell liquor, beer and wine, and in some states or localities, to
provide service for extended hours and on Sunday. Each Restaurant has food
service licenses from local health authorities, and similar licenses would be
required for each new Restaurant. The failure to obtain or retain liquor or food
service licenses could adversely affect, or in an extreme case, terminate, the
operations of an affected Restaurant. However, each Restaurant is operated in
accordance with standardized procedures designed to assure compliance with all
applicable codes and regulations. The development and construction of additional
Restaurants will be subject to compliance with applicable zoning, land use and
environmental regulations. Because matters of zoning, land use and related
issues often become subject to local political concerns and forces, there can
be no assurance that the Registrant will be able to obtain necessary variances
or other approvals on a cost effective and timely basis in order to construct
and develop future Restaurants. The Registrant's restaurant operations are also
subject to federal and state minimum wage laws and other laws governing such
matters as working conditions, overtime and tip credits.
EMPLOYEES
At March 2, 1996, the Registrant had approximately 3,524 employees, of
which 3,251 were Restaurant employees, 242 were Restaurant management personnel,
and 31 were corporate staff personnel. None of the Registrant's employees is
represented by a labor union or a collective bargaining unit. The Registrant
considers relations with its employees to be satisfactory.
MARKS
The Registrant has registered the service marks "Cooker Bar and Grille(R)"
and Design and "The Southern Cooker -- Home Style Restaurant & Bar(R)" and
Design with the United States Patent and Trademark Office. The Registrant also
uses the word Cooker(sm) as a service mark in combination with words and designs
other than those used in the registered marks. Other providers of restaurant
services use trade names that include the word "cooker." Some of these users may
resist the Registrant's use of its marks, as it expands into new territories.
However, in view of the extensive third party use of such trade names,
management believes that the Registrant should be in a reasonably good position
to resist adverse claims. This same extensive third party use means, however,
that the Registrant may in the future have difficulty blocking use by others of
marks incorporating the word "cooker." It is possible for prior users to develop
rights in such marks in their geographic territories and it would be difficult
for the Registrant to limit such use, even though the Registrant has a federal
registration.
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ITEM 2. PROPERTIES.
At March 2, 1996, the Registrant operated 39 Restaurants. The following
table sets forth certain information regarding the Restaurants:
APPROXIMATE
APPROXIMATE SEATING OWNED OR
LOCATION METROPOLITAN AREA DATE OPENED SQUARE FEET CAPACITY(1) LEASED(2)
FLORIDA
- - Altamonte Orlando May 1994 7,200 224 owned
Springs
- - Ft. Myers Ft. Myers-Cape Coral December 1992 8,200 274 leased
- - Gainesville Gainesville May 1992 7,200 241 owned
- - Melbourne Melbourne-Titusville- August 1992 8,000 265 owned
Palm Bay
- - Palm Harbor Tampa-St. Petersburg- April 1995 7,200 244 owned
Clearwater
GEORGIA
- - Alpharetta Atlanta September 1994 7,200 244 leased
- - Wildwood Atlanta October 1993 7,200 240 leased
INDIANA
- - Keystone Indianapolis June 1988 8,200 260 leased
- - Willow Lake Indianapolis March 1993 7,865 282 owned
KENTUCKY
- - Hurstbourne Louisville October 1991 8,000 241 leased
Plaza
MARYLAND
- - Bethesda Washington, DC January 1994 7,200 232 owned
MICHIGAN
- - Ann Arbor Detroit October 1994 7,200 232 leased
- - Auburn Hills Detroit May 1992 8,200 254 owned
- - Livonia Detroit December 1989 7,300 222 leased
- - Novi Detroit October 1993 7,200 241 owned
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APPROXIMATE
APPROXIMATE SEATING OWNED OR
LOCATION METROPOLITAN AREA DATE OPENED SQUARE FEET CAPACITY(1) LEASED(2)
NORTH CAROLINA
- - Raleigh Raleigh-Durham- December 1993 7,200 238 owned
Chapel Hill
OHIO
- - Governor's Cincinnati December 1990 9,100 239 owned(3)
Hill
- - Paxton Road Cincinnati June 1994 6,800 211 leased
- - Springdale Cincinnati May 1993 9,433 253 owned
- - Rockside Cleveland November 1991 8,400 282 leased
- - Beachwood Cleveland July 1987 8,100 250 leased
- - Westlake Cleveland November 1992 6,700 214 owned
- - Solon Cleveland November 1995 7,200 234 owned
- - Bethel Road Columbus November 7,200 225 leased
1985(4)
- - Cleveland Columbus December 1987 7,800 265 owned(3)
Avenue
- - East Main St. Columbus August 1990 7,240 223 owned(3)
- - North High St. Columbus December 1992 8,200 266 owned
- - Hamilton Rd. Columbus January 1996 8,392 288 leased
- - Miamisburg Dayton November 1991 7,700 230 owned
Centerville
- - Toledo Toledo October 1993 7,200 238 owned
- - Sylvania Toledo October 1995 6,915 237 leased
TENNESSEE
- - Memphis II Memphis October 1993 7,200 242 owned
- - Regalia Memphis March 1989 7,800 233 leased
Center
- - Hermitage Nashville April 1984(4) 6,100 219 owned(3)
- - Murfreesboro Nashville March 1996 7,667 234 owned
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APPROXIMATE
APPROXIMATE SEATING OWNED OR
LOCATION METROPOLITAN AREA DATE OPENED SQUARE FEET CAPACITY(1) LEASED(2)
- - Parkway Nashville December 1986 7,200 225 owned(3)
- - Rivergate Nashville October 1988 8,100 264 owned(3)
- - West End Nashville October 1984(4) 10,000 331 leased
VIRGINIA
- - Fairfax Washington, DC December 1993 7,200 238 owned
(1) Includes seating capacity in bar area.
(2) All leases are with unaffiliated lessors. The lease terms, including
options exercisable by the Registrant, range from 16 to 48 years. See Note
10 to the Financial Statements of the Registrant for information relating
to lease commitments.
(3) Subject to a mortgage granted to the First Union National Bank of Tennessee
to secure the $33.0 million revolving credit/term loan agreement provided
by the bank to the Registrant pursuant to an Amended and Restated Loan
Agreement dated as of December 22, 1995.
(4) Hermitage, West End and Bethel Road were opened by third parties and
acquired by the Registrant's corporate predecessors in 1986.
Additionally, the Registrant has purchased six sites for the construction of
Restaurants in the future. See "Development and Expansion", in Item 1, above.
In 1995, the Registrant purchased a 32,000 square foot office building in West
Palm Beach, Florida, remodeled it and moved into it as its new executive
offices. Currently the Registrant leases 40 percent of that facility to an
unaffiliated lessee. The lease term runs through May of 1998. The Registrant
leases a 15,000 square foot location in Columbus, Ohio from an unaffiliated
third party for a term through 1999 which is the Registrant's former executive
offices. The Registrant has entered into a short term sublease for this property
with an unaffiliated third party and is attempting to dispose of the property
altogether. The Registrant closed a Restaurant in Florence, Kentucky in 1995 and
is currently leasing the site to an unaffiliated third party while attempting to
dispose of it.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.
Set forth below is information regarding the executive officers of the
Registrant as of January 1, 1996:
G. ARTHUR SEELBINDER, age 52, is a founder of the Registrant. He has been
Chairman of the Board, Chief Executive Officer and a director of the Registrant
since 1986 and served as President from September 1989 until December 1994. He
was Chairman of the Board of Cooker Corporation (a predecessor of the
Registrant) from 1984 until 1988 when it was merged into the Registrant. Mr.
Seelbinder is also a director and the President of Financial Land Corporation,
a real estate holding company.
PHILLIP L. PRITCHARD, age 46, has been a director of the Registrant since
1994 and has served as the President and Chief Operating Officer of the
Registrant since December 1994. Prior to joining the Registrant, Mr. Pritchard
spent 22 years with General Mills Restaurants Inc. ("GMRI"). Most recently, Mr.
Pritchard served as Executive Vice President, Operations for GMRI's Red Lobster
restaurants from 1986 through 1992 and Executive Vice President, Operations for
GMRI's China Coast restaurants from 1992 to 1993. He has an MBA degree from
Rollins College Graduate School of Business Administration.
DAVID C. SEVIG, age 52, has been Vice President - Chief Financial Officer
of the Registrant since June 1995. Prior to joining the Registrant, Mr. Sevig
was with GMRI from 1967 through 1994 where he served as Vice President
Controller of international restaurants for six years and Vice President -
Controller of Red Lobster restaurants for ten years before that. From May 1994
through May 1995, he was with Blockbuster Entertainment developing the Block
Party entertainment concept.
GLENN W. COCKBURN, age 40, is a founder of the Registrant. He has been a
director of the Registrant since 1989. In 1991, he was elected Senior Vice
President - Operations of the Registrant. He was Vice President - Food Services
of the Registrant from 1988 to 1991 and was Vice President of Food Operations of
Cooker Corporation from 1986 to 1988 when it was merged into the Registrant. He
is a graduate of the Culinary Institute of America in Hyde Park, New York.
MARGARET A. EPPERSON, age 50, has been Secretary and Treasurer of the
Registrant since 1986.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Common Shares traded in the NASDAQ-National Market System ("NASDAQ-NMS")
until May 11, 1994 when the shares began trading on the New York Stock Exchange
("NYSE") under the symbol "CGR". The prices set forth below reflect high and low
sale prices for Common Shares in each of the quarters of 1994 and 1995 as
reported by the NASDAQ-NMS or NYSE, as appropriate.
1995 HIGH LOW
1st Quarter $7 5/8 $ 6 1/8
2nd Quarter $12 $ 7 1/8
3rd Quarter $13 1/8 $ 9 3/4
4th Quarter $11 3/8 $ 9 3/8
1994
1st Quarter $13 1/4 $ 8 1/2
2nd Quarter $ 9 3/8 $ 7
3rd Quarter $ 8 $ 6 1/8
4th Quarter $ 8 1/8 $ 5 7/8
On March 1, 1996, the Registrant had approximately 2,700 shareholders of
record.
The Registrant declared and paid an annual cash dividend of $.06 per Common
Share for fiscal 1995 and of $.05 per Common Share for fiscal 1994, in each
case, in February of the following year. Under the Registrant's bank revolving
credit/term loan agreement, dividends may be declared in any fiscal year during
which the Registrant's net income for that year exceeds $2,000,000 and such
dividends, together with all other dividends paid within such fiscal year, do
not exceed 15% of the Registrant's net income for the previous fiscal year.
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ITEM 6. SELECTED FINANCIAL DATA.
The following table presents selected financial and operating data of
the Registrant and is qualified in its entirety by the more detailed Financial
Statements presented elsewhere in this Annual Report.
(in thousands, except per share data(1))
FISCAL YEAR(2)
-------------------------------------------------------------------
1995 1994 1993 1992 1991
------------- ------------ ------------ ------------- ------------
Sales $91,678 $84,169 $66,688 $53,028 $39,516
Income:
Before extraordinary item 4,432 2,481 3,494 3,980 2,615
Extraordinary gain - 484 - - -
Total 4,432 2,965 3,494 3,980 2,615
Earnings per share(1):
Before extraordinary item .60 .34 .45 .52 .38
Extraordinary gain - .07 - - -
Total .60 .41 .45 .52 .38
Long-term debt 35,976 28,600 23,000 23,000 -
Total assets 83,181 70,852 66,598 62,068 31,659
Dividends per share(1) .05 .05 .05 .035 .03
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(1) Per share data is adjusted to reflect the 1-for-3 reverse stock split which
was effective April 29, 1991, and the 2-for-1 stock split on April 13,
1992.
(2) Ended December 31, 1995, January 1, 1995, January 2, 1994, January 3, 1993
and December 29, 1991.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
The following table sets forth as a percentage of sales certain items
appearing in the Registrant's statement of income.
FISCAL YEAR(1)
--------------------------------------------------------
1995 1994(2) 1993(2)
------------------ ------------------ ------------------
Sales 100.0% 100.0% 100.0%
Cost of sales:
Food and beverages 28.6 28.7 28.2
Labor 34.9 37.3 35.0
Restaurant operating expenses 16.4 16.1 15.8
Restaurant depreciation and amortization 4.3 6.0 6.1
Total cost of sales 84.2 88.1 85.1
Restaurant operating income 15.8 11.9 14.9
Other (income) expenses:
General and administrative 6.3 5.4 5.5
Interest expense 2.0 2.1 1.7
Gain on sale of property (.3) - -
Interest and other income - (.1) (.5)
Total other 8.0 7.4 6.7
Income before income taxes and extraordinary item 7.8 4.5 8.2
Income taxes before extraordinary item 3.0 1.5 3.0
Income before extraordinary item 4.8 3.0 5.2
Gain from extraordinary item, net of income taxes - 0.5 -
Net income 4.8 3.5 5.2
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(1) The fiscal years ended on December 31, 1995, January 1, 1995 and January 2,
1994, respectively.
(2) Certain fiscal 1994 and 1993 amounts have been reclassified to conform with
fiscal 1995 presentations.
1995 COMPARED WITH 1994
Sales increased $7,509,000 or 9% in 1995 over 1994. The increase was
primarily due to sales generated from new restaurants opened during fiscal 1995
and those opened late in fiscal 1994. The 1995 openings included units in
Gainesville, Florida; Sylvania (Toledo), Ohio and Solon (Cleveland), Ohio. Same
store sales increased during 11 of the 12 months of the year with an average
increase of .8%.
Restaurant operating income as a percent of sales increased from 11.9% in
1994 to 15.8% in 1995. The increase was due primarily to a reduction in store
management staffing as well as changes to the Registrant's hourly employee
staffing schedules and related payroll tax and benefit savings. Labor costs were
reduced from 37.3% of sales in 1994 to 34.9% of sales in 1995.
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The Registrant experienced unusually high produce prices in the second
quarter and higher than normal chicken prices in the second and third quarters
of 1995. However, changes in the items on the menu made during the year offset
these temporary cost increases and cost of food and beverages in 1995 of 28.6%
was down from 28.7% in 1994. No significant menu price increases were made
during fiscal 1995.
Restaurant operating expenses increased to 16.4% in fiscal 1995 from 16.1%
in 1994. Most of this increase was the result of higher repair and maintenance
spending.
Restaurant depreciation and amortization of store pre-opening expenses
decreased as a percent of sales from 6.0% in 1994 to 4.3% in 1995. This change
was due to lower amortization of pre-opening expenses which is a result of the
slowdown in the number of new units opening.
General and administrative expenses increased as a percent of sales to 6.3%
in 1995 from 5.4% in 1994. This increase was the result of the payment of higher
management bonuses in 1995 due to significantly stronger Registrant performance
and the addition of the President - Chief Operating Officer for all of 1995.
Interest expenses of 2.0% of sales in 1995 were down from 2.1% in 1994. This
change was due to slightly lower interest rates.
The 1995 provision for income taxes was 38.1% of income before income taxes.
This included a $205,000 provision for the Registrant's estimate of additional
tax liability.
1994 COMPARED WITH 1993
Sales increased $17,480,784 or 26.2% in 1994 over 1993. The increase was
primarily due to sales generated from new restaurants opened during fiscal 1994
and those opened late in fiscal 1993. The 1994 openings included units in
Bethesda, Maryland; Tampa and Orlando, Florida; Cincinnati, Ohio; Atlanta,
Georgia; and Detroit, Michigan. Same store sales declined 3.4% for the year but
showed improvement during the second half of the year and ended with fourth
quarter sales matching fourth quarter 1993 sales.
Restaurant operating income as a percent of sales decreased to 11.9% in 1994
as compared to 14.9% in 1993. The decline was primarily due to a moderate
increase in commodity costs for raw materials and below Registrant average sales
volumes in some of the newer stores. Food and beverage costs as a percentage of
sales increased from 28.2% in 1993 to 28.7% in 1994 primarily as a result of the
commodity cost increase noted above. Labor costs increased from 35.0% in 1993 to
37.3% in 1994. Since a significant portion of our labor costs are fixed, labor
expense increases as a percentage of sales as average sales volumes decline. As
a result of the lower sales volumes experienced in some of the newer stores, the
Registrant reviewed store staffing models in 1994 and tested a reduced labor
staffing model in several markets. The new staffing model has reduced the amount
of fixed labor expenses and provided more flexibility in improving the labor
costs in stores with lower sales volumes.
Restaurant operating expenses, including relatively fixed occupancy costs,
were also negatively impacted by the lower sales volumes and increased from
15.8% in 1993 to 16.1% in 1994.
Restaurant depreciation and amortization, including amortization of store
pre-opening expenses, decreased as a percent of sales from 6.1% in 1993 to 6.0%
in 1994. This change is the result of an increase in depreciation as a percent
of sales due primarily to lower sales volume offset by a relative reduction of
pre-opening expenses. Beginning January 1993 the Registrant began amortizing
store preoperational expenses over a 12-month period as compared to the 36-
month period used previously. In addition to the change in the amortization
period, the Registrant expensed an additional $950,000 of preoperational
expenses in the fourth quarter of 1993 for stores that were opened before 1993
so that accounting treatment would be consistent for all Restaurants.
General and administrative expenses declined from 5.5% of sales in 1993 to
5.4% in 1994 primarily due to these expenses being spread over an increasing
number of Restaurants.
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Interest expense increased from 1.7% of sales in 1993 to 2.1% of sales in
1994. The increase reflects interest expense incurred on the Registrant's
revolving term note which was not drawn on in 1993 and had an average
outstanding balance of $6,683,000 during 1994 and interest expense on the
subordinated convertible debentures issued in October 1992 (see Liquidity and
Capital Resources discussion below).
The 1994 provision for income taxes before extraordinary items was 34.0% of
income before income taxes and extraordinary items, reflecting approximately
$250,000 of credits from the FICA tip tax credit.
During the fourth quarter of 1994, the Registrant repurchased $2,500,000
principal of its 6 3/4% Convertible Subordinated Debentures Due 2002 in the
open market for a discounted purchase price of $1,617,500 which resulted in an
after tax extraordinary gain of $484,000.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant's primary sources of working capital are cash flows from
operations and borrowings under a revolving term note agreement which provides a
$33,000,000 line of credit. At December 31, 1995, the Registrant had outstanding
borrowings of $18,106,000 under the revolving term note agreement.
During 1995, the Registrant opened three new units and closed one. Capital
expenditures for these new units, the purchase of an office building, and the
refurbishing and remodeling of existing units totaled $17,200,000 and were
funded by cash flows of $9,495,000 from operations and borrowings from the
$33,000,000 line of credit. The Registrant plans to open nine units in 1996.
Total cash expenditures for the 1996 expansion are estimated to be approximately
$18,500,000. The Registrant believes that cash flow from operations together
with borrowings from the revolving term note agreement will be sufficient to
fund the planned expansion as well as the ongoing maintenance and remodeling of
existing Restaurants.
The Registrant completed a registered public offering in October 1992 of
$23,000,000 of 6 3/4% Convertible Subordinated Debentures Due 2002. These
debentures are subject to limited annual redemption by the bondholders and to
limited redemption on the death of a beneficial owner. The annual redemption is
capped at 5% of the original gross proceeds and occurs on each November 1.
Redemptions on death are subject to a cap of $25,000 per holder per year.
Pursuant to these two redemption options, the Registrant redeemed $1,180,000 in
principal amount of these debentures during 1995 and expects a similar principal
redemption to occur in 1996. During December 1994, the Registrant repurchased
$2,500,000 in principal amount of these debentures in the open market for a
discounted purchase price of $1,617,500 with settlement dates in December 1994
and January 1995. During December 1995, the Registrant repurchased $250,000 in
principal amount of the debentures in the open market for a discounted purchase
price of $221,612. As a result of these transactions, which were funded through
additional draws on the Registrant's revolving term note, the remaining
outstanding balance of the debentures at December 31, 1995 was $17,870,000. The
Registrant believes that cash flow from operations and additional borrowings
from the revolving term note will be sufficient to fund the expected principal
redemptions in 1996.
During the first quarter of 1994, the Board of Directors approved a guaranty
by the Registrant of a loan of $5,000,000 to the Chairman of the Board from
First Union National Bank of Tennessee. The loan bore interest at such Bank's
prime rate plus 1/4%, had an initial term of 18 months and was secured by a
pledge of 570,000 Common Shares (owned by the Chairman) to the Bank. In the
third quarter of 1995, the loan was acquired by NationsBank of Tennessee and its
maturity was extended for an additional 24 months. The guaranty provides that
the Bank will sell the pledged shares and apply the proceeds thereof to the loan
prior to calling on the Registrant for its guaranty. At March 1, 1996, the
undiscounted fair market value of the pledged shares was approximately
$7,338,750. The loan is scheduled to mature in the third quarter of 1997. The
guaranty secures the loan until it is repaid or refinanced without a guaranty.
The Registrant expects that the Chairman will repay or refinance the loan before
its presently scheduled maturity. If the loan is not so repaid or refinanced,
the Registrant would fund any obligation it incurs under the terms of its
guaranty from additional borrowings under its line of credit. The Registrant
does not believe that it will be required to make any material payment under the
guaranty in 1996; however there can be no assurance that the loan will be repaid
or refinanced on terms that will not result in continuing the guaranty or in a
material payment.
-12-
14
The Chairman paid a guaranty fee of 1/4% of the principal amount of the loan
guaranteed to the Registrant at the time the loan was guaranteed and will also
pay such fee on each anniversary of the guaranty as long as it is outstanding.
The loan was refinanced in part because the Board of Directors determined that
the transfer of the indebtedness from the First Union National Bank of Tennessee
to NationsBank of Tennessee would be in the best interests of the Registrant, as
guarantor of such indebtedness, in that it would reduce the conflict of interest
between First Union's role as a lender to the Registrant and its role as a
lender to one of the Registrant's officers and reduce the possibility that First
Union might sacrifice the Registrant's interests in an attempt to protect its
position on the loan to the Chairman. Because of the Registrant's request that
the loan be refinanced, it was determined by the Board of Directors that the
costs incurred by the Chairman are properly chargeable to the Registrant and the
Registrant paid or reimbursed the Chairman approximately $42,000 for the costs
incurred in such refinancing.
SFAS NO. 123
In October 1995, the FASB issued Statement of Financial Accounting Standards
No. 123 ("SFAS No. 123"), "Accounting for Stock-Based Compensation." SFAS No.
123 establishes financial accounting and reporting standards for stock based
employee compensation plans. The statement defines a "fair value based method"
of accounting for employee stock options or similar equity instruments and
encourages all entities to adopt that method of accounting for all of their
employee stock compensation plans. However, SFAS No. 123 also allows an entity
to continue to measure compensation costs for those plans using the "intrinsic
value based method" of accounting, which the Registrant currently uses. The
Registrant currently plans on adopting SFAS No. 123 for fiscal 1996 and intends
to retain the intrinsic value method of accounting for stock based compensation.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements of the Registrant, and the related notes, together
with the report of Price Waterhouse LLP dated January 29, 1996, are set forth at
pages F-1 through F-15 attached hereto.
The following table sets forth unaudited quarterly operating results for the
eight fiscal quarters beginning January 3, 1994 and ending December 31, 1995.
The Registrant believes all necessary adjustments have been included in the
amounts stated below to present fairly the following selected quarterly
information when read in conjunction with the financial statements included
elsewhere herein. The information includes all normal recurring adjustments the
Registrant considers necessary for a fair presentation thereof in accordance
with generally accepted accounting principles.
(in thousands, except per share data)
1995 1994(1)
-------------------------------------------- ------------------------------------------------
1ST 2ND 3RD 4TH 1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Sales $22,899 $22,694 $22,758 $23,327 $20,120 $20,830 $21,226 $21,993
Restaurant operating
income(2) 3,556 3,547 3,615 3,743 2,473 2,159 2,452 2,924
Income before income taxes
and extraordinary item 1,806 1,723 1,733 1,901 1,003 814 820 1,124
Income before extraordinary
item 1,005 1,102 1,109 1,216 652 554 549 726
Extraordinary gain (net of
income taxes) - - - - - - - 484
Net income 1,005 1,102 1,109 1,216 652 554 549 1,210
Earnings per share
Before extraordinary item .14 .15 .15 .16 .09 .08 .07 .10
Extraordinary gain - - - - - - - .07
Total .14 .15 .15 .16 .09 .08 .07 .17
- -----------------------
(1) Certain amounts related to the first three quarters of fiscal 1994 have
been reclassified to conform to fiscal 1994 fourth quarter presentations.
-13-
15
(2) Represents sales less food and beverages, labor, restaurant operating
expenses and depreciation and amortization.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
-14-
16
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the Registrant's directors is set forth at "ELECTION
OF DIRECTORS; Nominees for Election as Directors, Directors Whose Terms
Continue Until the 1997 Annual Meeting and Directors Whose Terms Continue Until
the 1998 Annual Meeting" in the Registrant's Proxy Statement for its 1996 Annual
Meeting of Shareholders dated March 15, 1996 (the "1996 Proxy Statement") and
information regarding late filings of reports required by Section 16(a) of the
Securities Exchange Act of 1934 is set forth at "CERTAIN FILINGS" in the 1996
Proxy Statement which information is incorporated herein by reference.
Information regarding the Registrant's executive officers is set forth in PART I
of this report at "Supplemental Item. Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item is set forth at "COMPENSATION OF
MANAGEMENT" in the 1996 Proxy Statement which information is incorporated herein
by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item is set forth at "SECURITY OWNERSHIP
OF PRINCIPAL SHAREHOLDERS, DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS" in the
1996 Proxy Statement which information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is set forth at "COMPENSATION OF
MANAGEMENT; Certain Transactions" in the 1996 Proxy Statement which information
is incorporated herein by reference.
-15-
17
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(A) DOCUMENTS FILED AS PART OF THIS FORM 10-K.
(1) Financial Statements:
Independent Accountants' Report dated January 29, 1996
Balance Sheet as of December 31, 1995 and January 1, 1995
Statement of Income for the Fiscal Years Ended December 31, 1995,
January 1, 1995 and January 2, 1994
Statement of Changes in Shareholders' Equity for the Fiscal Years
Ended December 31, 1995, January 1, 1995 and January 2, 1994
Statement of Cash Flows for the Fiscal Years Ended December 31,
1995, January 1, 1995 and January 2, 1994
Notes to Financial Statements for the Fiscal Years Ended December
31, 1995, January 1, 1995 and January 2, 1994
(2) FINANCIAL STATEMENT SCHEDULES:
Not applicable.
(3) The following exhibits are filed as part of this Form 10-K.
(3) ARTICLES OF INCORPORATION AND BY-LAWS.
3.1. Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 28.2 of
Registrant's quarterly report on Form 10-Q for the quarterly
period ended March 29, 1992; Commission File Number
0-16806).
3.2. Amended and Restated Code of Regulations of the Registrant
(incorporated by reference to Exhibit 4.5 of the
Registrant's quarterly report on Form 10-Q for the fiscal
quarter ended April 1, 1990; Commission File No. 0-16806).
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS.
4.1. See Articles FOURTH, FIFTH and SIXTH of the Amended and
Restated Articles of Incorporation of the Registrant (see
3.1 above).
4.2. See Articles One, Four, Seven and Eight of the Amended and
Restated Code of Regulations of the Registrant (see 3.2
above).
4.3. Rights Agreement dated as of February 1, 1990 between the
Registrant and National City Bank (incorporated by
reference to Exhibit 1 of the Registrant's Form 8-A filed
with the Commission on February 9, 1990; Commission File No.
0-16806).
-16-
18
4.4. Amendment to Rights Agreement dated as of November 1, 1992
between the Registrant and National City Bank (incorporated
by reference to Exhibit 4.4 of Registrant's annual report on
Form 10-K for the fiscal year ended January 3, 1993 (the
"1992 Form 10-K"); Commission File No. 0-16806).
4.5. Letter dated October 29, 1992 from the Registrant to First
Union National Bank of North Carolina (incorporated by
reference to Exhibit 4.5 to the 1992 Form 10-K).
4.6. Letter dated October 29, 1992 from National City Bank to the
Registrant (incorporated by reference to Exhibit 4.6 to the
1992 Form 10-K).
4.7. See Section 7.4 of the Amended and Restated Loan Agreement
dated December 22, 1995 between Registrant and First Union
National Bank of Tennessee. (see 10.4 below).
4.8. Indenture dated as of October 28, 1992 between Registrant
and First Union National Bank of North Carolina, as Trustee
(incorporated by reference to Exhibit 2.5 of Registrant's
Form 8-A filed with the Commission on November 10, 1992;
Commission File Number 0-16806).
(10) MATERIAL CONTRACTS (* Management contract or compensatory
plan or arrangement.)
10.1. Purchase and Sale Agreement dated October 20, 1995 between
GMRI, Inc. and Registrant (incorporated by reference to
Exhibit 99.1 of the Registrant's Current Report on Form 8-K
dated January 4, 1996 (the "1996 8-K"); Commission File No.
1-13044).
10.2. First Amendment to Purchase and Sale Agreement dated October
__, 1995 between GMRI, Inc. and Registrant (incorporated by
reference to Exhibit 99.2 of the 1996 8-K; Commission File
No. 1-13044).
10.3. Joinder of Escrow Agreement dated October 25, 1995 among
Lawyers Title Insurance Corporation, GMRI, Inc. and
Registrant (incorporated by reference to Exhibit 99.3 of the
1996 8-K; Commission File No. 1-13044).
10.4. Amended and Restated Loan Agreement dated December 22, 1995
between Registrant and First Union National Bank of
Tennessee.
10.5. Form of Contingent Employment Agreement and schedule of
executed Agreements. *
10.6. The Registrant's 1988 Employee Stock Option Plan, as amended
and restated (incorporated by reference to Exhibit 10.12 of
the Registrant's annual report on Form 10-K for the fiscal
year ended December 29, 1991 (the "1991 Form 10-K"),
Commission File No. 0-16806).*
10.7. The Registrant's 1992 Employee Stock Option Plan
(incorporated by reference to Exhibit 10.14 to the 1991 Form
10-K).*
10.8. The Registrant's 1988 Directors Stock Option Plan, as
amended and restated (incorporated by reference to Exhibit
10.15 of the Registrant's Annual Report on Form 10-K for the
fiscal year ended January 2, 1994 (the "1993 Form 10-K"),
Commission File No. 0-16806).*
10.9. The Registrant's 1992 Directors Stock Option Plan, as
amended and restated (incorporated by reference to Exhibit
10.16 of the 1993 Form 10-K).*
10.10. The Registrant's 1996 Officers' Stock Option Plan. *
-17-
19
10.11. Guaranty and Suretyship Agreement dated March 22, 1994
between the Registrant and First Union National Bank of
Tennessee (incorporated by reference to Exhibit 10.17 of the
1993 Form 10-K).
10.12. Reaffirmation and Amendment to Guaranty and Suretyship
Agreement between Registrant and NationsBank of Tennessee,
N.A. dated July 24, 1995 (incorporated by reference to
Exhibit 10.5 of the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended July 2, 1995;
Commission File No. 1-13044).
10.13. Separation Agreement and General Release dated October 26,
1994 between Registrant and William Z. Esch (incorporated
by reference to Exhibit 10.16 of the Registrant's Annual
Report on Form 10-K for the fiscal year ended January 1,
1995; Commission File No. 1-13044).*
(23) CONSENTS OF EXPERTS AND COUNSEL.
23.1 Consent of Price Waterhouse LLP.
(24) POWERS OF ATTORNEY.
24.1. Powers of Attorney.
24.2. Certified resolution of the Registrant's Board of Directors
authorizing officers and directors signing on behalf of the
Registrant to sign pursuant to a power of attorney.
(27) FINANCIAL DATA SCHEDULE.
27.1. Financial Data Schedule.
(B) REPORTS ON FORM 8-K.
No current report on Form 8-K was filed by the Registrant during the
fourth quarter of fiscal 1995.
-18-
20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: March 28, 1996
COOKER RESTAURANT CORPORATION
(the "Registrant")
By: /s/ G. Arthur Seelbinder
--------------------------------
G. Arthur Seelbinder
Chairman of the Board,
Chief Executive Officer and Director
(principal executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 28, 1996.
SIGNATURE TITLE
/s/ G. Arthur Seelbinder Chairman of the Board, Chief Executive
- ---------------------------------------
G. Arthur Seelbinder Officer and Director (principal executive
officer)
/s/ Phillip L. Pritchard * President, Chief Operating
- ---------------------------------------
Phillip L. Pritchard Officer and Director
/s/ Glenn W. Cockburn * Senior Vice President - Operations
- ---------------------------------------
Glenn W. Cockburn and Director
/s/ David C. Sevig * Vice President - Chief Financial Officer
- ---------------------------------------
David C. Sevig (principal financial and accounting officer)
/s/ Joseph E. Madigan * Director
- ---------------------------------------
Joseph E. Madigan
/s/ Robin V. Holderman * Director
- ---------------------------------------
Robin V. Holderman
/s/ David T. Kollat * Director
- ---------------------------------------
David T. Kollat
/s/ David L. Hobson * Director
- ---------------------------------------
David L. Hobson
/s/ Henry R. Hillenmeyer * Director
- ---------------------------------------
Henry R. Hillenmeyer
/s/ Margaret T. Monaco * Director
- ---------------------------------------
Margaret T. Monaco
* By: /s/ G. Arthur Seelbinder
- ---------------------------------------
G. Arthur Seelbinder
Attorney-in-Fact
21
COOKER RESTAURANT CORPORATION
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Accountants.................................................................. F-2
Balance Sheet at December 31, 1995 and January 1, 1995............................................. F-3
Statement of Income for the fiscal years ended December 31, 1995, January 1, 1995 and
January 2, 1994.................................................................................... F-4
Statement of Changes in Shareholders' Equity for the fiscal years ended December 31, 1995,
January 1, 1995 and January 2, 1994................................................................ F-5
Statement of Cash Flows for the fiscal years ended December 31, 1995, January 1, 1995 and
January 2, 1994.................................................................................... F-6
Notes to Financial Statements...................................................................... F-7
F-1
22
REPORT OF INDEPENDENT ACCOUNTANTS
January 29, 1996
To the Board of Directors and Shareholders
of Cooker Restaurant Corporation
In our opinion, the accompanying balance sheet and the related statements of
income, of changes in shareholders' equity and of cash flows present fairly, in
all material respects, the financial position of Cooker Restaurant Corporation
(the Company) at December 31, 1995 and January 1, 1995, and the results of its
operations and its cash flows for each of the three fiscal years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Columbus, Ohio
F-2
23
COOKER RESTAURANT CORPORATION
BALANCE SHEET
DECEMBER 31, 1995 AND JANUARY 1, 1995
DECEMBER 31, JANUARY 1,
1995 1995
ASSETS (in thousands)
CURRENT ASSETS:
Cash and cash equivalents $ 1,299 $ 2,087
Inventory 914 830
Preoperational costs 302 678
Prepaid expenses and other current assets 511 739
-------- --------
TOTAL CURRENT ASSETS 3,026 4,334
PROPERTY AND EQUIPMENT 78,127 64,481
OTHER ASSETS 2,028 2,037
-------- --------
$ 83,181 $ 70,852
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,421 $ 2,604
Accrued liabilities 5,543 4,433
Income taxes payable 783 633
Deferred income taxes 79 79
-------- --------
TOTAL CURRENT LIABILITIES 8,826 7,749
LONG-TERM DEBT 35,976 28,600
DEFERRED INCOME TAXES 433 595
-------- --------
TOTAL LIABILITIES 45,235 36,944
-------- --------
SHAREHOLDERS' EQUITY:
Common shares - without par value; authorized, 26,082 26,003
30,000,000 shares; issued 7,663,000 and 7,651,000
shares at December 31, 1995 and January 1, 1995,
respectively
Retained earnings 18,013 13,939
Treasury stock, at cost, 513,000 and 500,000 shares (6,149) (6,034)
at December 31, 1995 and January 1, 1995,
respectively
COMMITMENTS (Note 13)
-------- --------
37,946 33,908
-------- --------
$ 83,181 $ 70,852
======== ========
The accompanying notes are an integral part of the financial statements.
F-3
24
COOKER RESTAURANT CORPORATION
STATEMENT OF INCOME
FISCAL YEARS ENDED DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
DECEMBER 31, JANUARY 1, JANUARY 2,
1995 1995 1994
(in thousands, except per share data)
SALES $ 91,678 $ 84,169 $ 66,688
-------- -------- --------
COST OF SALES:
Food and beverages 26,218 24,193 18,780
Labor 31,977 31,389 23,384
Restaurant operating expenses 15,065 13,549 10,540
Restaurant depreciation and amortization 3,957 5,030 4,063
-------- -------- --------
77,217 74,161 56,767
-------- -------- --------
Restaurant operating income 14,461 10,008 9,921
-------- -------- --------
OTHER EXPENSES (INCOME):
General and administrative 5,785 4,532 3,710
Interest expense 1,848 1,787 1,105
Gain on sale of property (305) -- --
Interest and other income (30) (72) (409)
-------- -------- --------
7,298 6,247 4,406
-------- -------- --------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM 7,163 3,761 5,515
PROVISION FOR INCOME TAXES BEFORE
EXTRAORDINARY ITEM 2,731 1,280 2,021
-------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM 4,432 2,481 3,494
EXTRAORDINARY GAIN, NET OF INCOME TAXES -- 484 --
-------- -------- --------
NET INCOME $ 4,432 $ 2,965 $ 3,494
======== ======== ========
EARNINGS PER COMMON SHARE:
Before extraordinary item $ .60 $ .34 $ .45
Extraordinary item -- .07 --
-------- -------- --------
TOTAL $ .60 $ .41 $ .45
======== ======== ========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
AND COMMON EQUIVALENT SHARES OUTSTANDING 7,387 7,254 7,846
======== ======== ========
The accompanying notes are an integral part of the financial statements.
F-4
25
COOKER RESTAURANT CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FISCAL YEARS ENDED DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
Common Shares Treasury Stock
----------------------- Retained -----------------------
Shares Amounts Earnings Shares Amounts Total
-------- -------- -------- -------- -------- --------
(in thousands)
Balance, January 3, 1993 7,591 $ 25,393 $ 8,226 -- $ -- $ 33,619
Purchase of treasury stock -- -- -- 105 (1,347) (1,347)
Issuance of common shares
under stock option plans 55 338 -- -- -- 338
Tax benefits of stock -- 244 -- -- -- 244
options exercised
Dividends paid $.05 per -- -- (380) -- -- (380)
share
Net income -- -- 3,494 -- -- 3,494
-------- -------- -------- -------- -------- --------
Balance, January 2, 1994 7,646 25,975 11,340 105 (1,347) 35,968
Purchase of treasury stock -- -- -- 395 (4,687) (4,687)
Issuance of common shares
under stock option plans 5 22 -- -- -- 22
Tax benefits of stock -- 6 -- -- -- 6
options exercised
Dividends paid $.05 per -- -- (366) -- -- (366)
share
Net income -- -- 2,965 -- -- 2,965
-------- -------- -------- -------- -------- --------
Balance, January 1, 1995 7,651 26,003 13,939 500 (6,034) 33,908
Addition to treasury stock -- -- -- 13 (115) (115)
Issuance of common shares
under stock option plans 12 52 -- -- -- 52
Tax benefits of stock -- 27 -- -- -- 27
options exercised
Dividends paid $.05 per -- -- (358) -- -- (358)
share
Net income -- -- 4,432 -- -- 4,432
-------- -------- -------- -------- -------- --------
Balance, December 31, 1995 7,663 $ 26,082 $ 18,013 513 $ (6,149) $ 37,946
======== ======== ======== ======== ======== ========
The accompanying notes are an integral part of the financial statements.
F-5
26
COOKER RESTAURANT CORPORATION
STATEMENT OF CASH FLOWS
FISCAL YEARS ENDED DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
DECEMBER 31, JANUARY 1, JANUARY 2,
1995 1995 1994
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,432 $ 2,965 $ 3,494
Adjustments to reconcile net income to net
cash providing by operating activities:
Depreciation and amortization 4,375 5,464 4,482
Gain on sale of property (305) -- --
Gain on repurchase of debentures, net of
income taxes
(23) (484) --
(Increase) in inventory (84) (192) (207)
(Increase) in preoperational costs (444) (1,348) (2,441)
Decrease (increase) in prepaid expenses
and other current assets
237 (327) (756)
(Increase) decrease in other assets (276) (131) 130
Increase in accounts payable 460 683 (336)
Increase in accrued liabilities 1,110 356 985
Increase in income taxes payable 175 544 752
Decrease (increase) in deferred income taxes (162) (159) 100
-------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 9,495 7,571 6,203
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (17,200) (11,318) (23,627)
Proceeds from sales of property and equipment 459 206 108
Proceeds from sales of short-term investments -- 749 18,628
Advances to related party -- -- (375)
Payments from related party -- -- 375
-------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES (16,741) (10,363) (4,891)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 8,811 9,300 --
Repurchase of debentures (1,180) (1,200) --
Redemption of debentures (893) (975) --
Exercise of stock options 78 22 337
Purchases of treasury stock -- (6,034) --
Dividends paid (358) (366) (379)
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 6,458 747 (42)
-------- -------- --------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (788) (2,045) 1,270
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 2,087 4,132 2,862
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,299 $ 2,087 $ 4,132
======== ======== ========
The accompanying notes are an integral part of the financial statements.
F-6
27
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cooker Restaurant Corporation (the Company) owns and operates 37
restaurants in Tennessee, Ohio, Indiana, Kentucky, Michigan, Florida,
Georgia, North Carolina, Virginia, and Maryland which have been developed
under the Cooker concept.
Fiscal year. The Company's fiscal year ends on the Sunday closest to
December 31 of each year. Fiscal years 1995, 1994 and 1993 consisted of 52
weeks.
Cash and cash equivalents. Cash and cash equivalents consist of cash on
hand and in banks and credit card receivables. Credit card receivables are
considered cash equivalents because of their short collection period. The
carrying amount of credit card receivables approximates fair value.
Inventories. Inventories consist primarily of food and beverages and are
stated at the lower of cost or market. Cost is determined by the first-in,
first-out (FIFO) method.
Preoperational costs. Preoperational costs consist primarily of costs for
employee training and relocation and supplies incurred in connection with
the opening of each restaurant. These costs are accumulated to the date
the restaurant is opened and are amortized on the straight-line method over
one year commencing from that date. Prior to fiscal 1993, preoperational
costs were amortized on the straight-line method over three years. This
change in estimate decreased fiscal 1993 net income by $611,000 or $.08 per
share. Accumulated amortization of preoperational costs was $136,000 and
$711,000 at December 31, 1995 and January 1, 1995, respectively.
Property and equipment. Property and equipment, including capital
improvements, are recorded at cost. Depreciation is computed by the
straight-line method over the estimated useful lives of the assets.
Leasehold improvements are amortized using the straight-line method over
the shorter of the useful life of the improvements or the remaining lease
term.
Maintenance and repairs are charged directly to expense as incurred. When
property and equipment are sold or otherwise disposed of, the related cost
and accumulated depreciation are removed from the accounts and the
resulting gains or losses are reported in operations.
Interest is capitalized primarily in connection with the construction of
new restaurants. Capitalized interest is amortized over the asset's
estimated useful life. Interest costs of $291,000, $291,000 and $429,000
were capitalized in fiscal 1995, 1994 and 1993, respectively.
Deferred financing costs. Deferred financing costs are being amortized over
the term of the related debt.
Prepaid lease. Prepaid lease represents prepayment of a long-term land lease
and is being amortized over the lease term.
Financial instruments. The carrying amounts of financial instruments,
including cash and cash equivalents, accounts payable and other current
liabilities approximate their estimated fair values. The carrying amount
of borrowings under the Amended and Restated Loan Agreement (see Note 5)
approximates fair value at December 31, 1995. The fair value of the
convertible subordinated debentures is determined using discounted future
cash flows based on similar types of borrowing arrangements. At December
31, 1995, the carrying amount and fair value of the convertible
subordinated debentures are $17,870,000 and $15,569,000, respectively.
Income taxes. Income taxes are accounted for under the liability method in
accordance with Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes.
F-7
28
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
Earnings per share. Earnings per share is calculated using the weighted
average number of common shares outstanding including common share
equivalents, which consist of stock options. The convertible subordinated
debentures have not been included as common share equivalents due to their
antidilutive effect.
Use of estimates. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Reclassifications. Certain fiscal 1994 and 1993 amounts have been
reclassified to conform with fiscal 1995 presentations.
2. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
December 31, January 1,
1995 1995
------------- ----------
(in thousands)
Land $ 19,595 $ 17,512
Buildings and leasehold improvements 43,097 39,135
Furniture, fixtures and equipment 16,836 15,961
Construction in progress 11,013 858
Land held for sale 882 1,089
-------- --------
91,423 74,555
Less accumulated depreciation and
amortization (13,296) (10,074)
-------- --------
$ 78,127 $ 64,481
======== ========
F-8
29
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
3. OTHER ASSETS
Other assets consist of the following:
December 31 January 1,
1995 1995
----------- ----------
(in thousands)
Deferred financing costs, net of
accumulated amortization of $573,000
and $465,000 $ 764 $ 753
Prepaid lease, net of accumulated
amortization of $46,000 and $33,000 643 617
Advances to Employee Stock Ownership
Plan 270 298
Liquor licenses, net of accumulated
amortization of $90,000 and $73,000 209 224
Other 142 145
------ ------
$2,028 $2,037
====== ======
4. ACCRUED LIABILITIES
Accrued liabilities consist of the following:
December 31 January 1,
1995 1995
----------- ----------
(in thousands)
Salaries and wages
$3,221 $2,274
Gift certificates payable 608 567
Sales tax payable 466 442
Property taxes 298 485
Other 950 665
------ ------
$5,543 $4,433
====== ======
F-9
30
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
5. LONG-TERM DEBT
Long-term debt consists of the following:
December 31, January 1,
1995 1995
------------ ----------
(in thousands)
Convertible subordinated debentures $17,870 $19,300
Revolving line of credit 18,106 9,300
------- -------
$35,976 $28,600
======= =======
The convertible subordinated debentures (the "Debentures") mature October
1, 2002. The Debentures bear interest at 6.75% which is payable quarterly
on the first day of each January, April, July and October. The Debentures
are convertible at any time before maturity, unless previously redeemed,
into common shares of the Company at a conversion price of $21.5625 per
share, subject to adjustment for stock splits. The Debentures are
subordinated to all existing and future Senior Indebtedness of the Company
as defined in the indenture relating to the Debentures.
At the holder's option, the Company is obligated to redeem debentures
tendered during the period from August 1 through October 1 of each year,
commencing August 1, 1994, at 100% of their principal amount plus accrued
interest, subject to an annual aggregate maximum (excluding the redemption
option on the death of the holder) of $1,150,000. During fiscal years 1995
and 1994, the Company redeemed the annual aggregate maximum amount required
by the holder's option. The Company is also required to redeem debentures
at 100% of their principal plus accrued interest in the event of death of a
debenture holder up to a maximum of $25,000 per year per deceased debenture
holder. During fiscal years 1995 and 1994, the Company redeemed debentures
subject to this provision of $30,000 and $50,000, respectively.
The Debentures are redeemable at any time on or after October 1, 1994 at
the option of the Company, in whole or in part, at declining premiums. In
addition, upon the occurrence of certain changes of control of the Company,
the Company is obligated to purchase Debentures at the holder's option at
par plus accrued interest.
In December 1994, the Company recorded an extraordinary gain of $734,000
($484,000 after taxes) in connection with the repurchase of debentures in
the principal amount of $2,500,000. In December 1995, the Company
repurchased debentures in the principal amount of $250,000 resulting in a
gain of $23,000. These transactions were financed through funds available
under the revolving line of credit.
On December 22, 1995, the Company entered into a Revolving/Term Loan under
an Amended and Restated Loan Agreement (the Agreement) with a bank for
borrowings up to $33,000,000. Borrowings under the Agreement may be used
for general working capital purposes and costs incurred in expansion of the
restaurant business. The Agreement is secured by certain properties owned
by the Company. Beginning January 1, 1998, borrowing availability will be
reduced quarterly by a maximum of $1,650,000. Borrowings are due December
31, 1998.
Interest, payable quarterly, is at the Company's option at LIBOR plus 1.25%
up to LIBOR plus 2.00% or prime up to prime plus 0.50%, based on a
financial ratio as defined in the Agreement. Interest on borrowings at
December 31, 1995 ranged from 7.43% to 8.75%.
F-10
31
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
The Agreement contains certain restrictive covenants, including maintenance
of a minimum tangible net worth and fixed charge coverage ratio and
limitations on indebtedness, stock acquisitions, encumbrances and new
restaurant expansion. In addition, provided that net income of the prior
year exceeds $2,000,000, dividends can be declared but cannot exceed 15% of
the prior year's net income.
6. SHAREHOLDERS' EQUITY
The Company has authorized 5,000,000 shares of Class A participating
preferred stock, none of which have been issued.
In January 1990, the Board of Directors approved a Shareholder Rights Plan,
as amended, which provides that, in the event that a third party purchases
20% or more of total outstanding stock of the company, a dividend
distribution of one and one-half rights for each outstanding common share
will be made. These rights expire ten years from date of issuance, if not
earlier redeemed by the Company, and entitle the holder to purchase, under
certain conditions, preferred shares or common shares of the Company. As
of December 31, 1995, approximately 10,725,000 rights were outstanding.
7. INCOME TAXES
The provision for income taxes for the following fiscal years then ended
consists of:
December 31, January 1, January 2,
1995 1995 1994
------------ -------- ---------
(in thousands)
Current taxes:
Federal
$ 2,412 $ 1,037 $ 1,453
State and local 481 402 468
------- ------- -------
2,893 1,439 1,921
Deferred taxes (162) (159) 100
------- ------- -------
Provision for income taxes
before extraordinary item 2,731 1,280 2,021
Provision for income taxes on
extraordinary item -- 249 --
------- ------- -------
Provision for income taxes $ 2,731 $ 1,529 $ 2,021
======= ======= =======
F-11
32
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
A reconciliation of the differences between income taxes calculated at the
Federal statutory tax rate and the provision for income taxes before
extraordinary item is as follows:
Fiscal year ended
------------------------------------------
December 31, January 1, January 2,
1995 1995 1994
---- ---- ----
(in thousands)
Income tax expense on income
before extraordinary item
based on the Federal statutory
rate
$ 2,435 $ 1,279 $ 1,875
State taxes, net of Federal tax
benefit
317 265 258
Reserve for tax examination 205 -- --
FICA tip tax credit (376) (250) --
Tax-exempt income and other 150 (14) (112)
------- ------- -------
$ 2,731 $ 1,280 $ 2,021
======= ======= =======
Deferred income taxes are recorded based upon the difference between the
book and tax bases of assets and liabilities, primarily property and
equipment, preoperational costs and accrued liabilities. Deferred tax
assets at December 31, 1995 and January 1, 1995 were $373,000 and $137,000,
respectively. Deferred tax liabilities at December 31, 1995 and January 1,
1995 were $885,000 and $811,000, respectively.
8. EMPLOYEE STOCK OWNERSHIP PLAN
In 1989, the Company established an Employee Stock Ownership Plan (the
"ESOP" or the "Plan"). All employees who have reached the age of 21 years
are participants in the Plan. Participants vest in the Plan based upon a
graduated schedule providing 20 percent after three years of service and
each year thereafter, with full vesting after seven years.
The amount and frequency of contributions to the Plan are at the discretion
of the Company. Contributions of $73,000 were made to the ESOP during
fiscal 1995. No contributions were made during fiscal 1994 and 1993.
Dividends on shares held by the ESOP are used to reduce the Company's
receivable from the ESOP prior to allocation to ESOP participant accounts.
Shares forfeited due to participant withdrawals from the ESOP during fiscal
1995 will be reallocated to remaining participants as of the end of the
plan year, as was done for shares forfeited due to participant withdrawals
from the ESOP during fiscal 1994.
As of December 31, 1995, and January 1, 1995, the ESOP owns 335,000 and
363,000, respectively, of the Company's common shares, all of which are
allocated to eligible participants.
9. STOCK OPTION PLANS
The Company has employee stock option plans adopted in 1988 (1988 Plan) and
1992 (1992 Plan). Under these plans, employees and nonmanagement directors
are granted stock options and stock appreciation rights as determined by a
committee appointed by the Board of Directors (the Committee). Each option
permits the holder to purchase one share of common stock of the Company at
the stated exercise price up to ten years from the date of grant. The
stated exercise price is the market value of the stock on the date of
grant. Options vest at a rate of 25% per year. The Company has reserved
620,000 and 600,000 common shares for issuance to employees and 73,000 and
200,000 for issuance to nonmanagement directors under the 1988 Plan and
1992 Plan, respectively.
F-12
33
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
Changes in the number of shares under the stock option plans are summarized
as follows:
Options Price
-------- -------------------
Balance at January 3 , 1993 536,000 $ 4.03 - $17.75
Granted 282,000 17.75 - 21.75
Canceled (1,000) 4.03 - 4.41
Exercised (55,000) 4.03 - 11.19
-------- ----- ------
Balance at January 2, 1994 762,000 4.03 - 21.75
Granted 772,000 6.63 - 12.88
Canceled (634,000) 4.03 - 21.75
Exercised (6,000) 4.03 - 4.41
-------- ----- ------
Balance at January 1, 1995 894,000 4.03 - 21.75
Granted 65,000 6.75 - 11.00
Canceled (17,000) 6.75 - 11.19
Exercised (11,000) 4.03 - 7.63
-------- ----- ------
Balance at December 31, 1995 931,000 $ 4.03 - $21.75
======== ====== ======
At December 31, 1995, options were exercisable to purchase 417,000 common
shares.
During fiscal 1994, the Committee changed the exercise price of certain
options through the authorization of the surrender and cancellation of
541,000 options and the reissuance of 398,000 options under the 1988 and
1992 Plans. The remaining 143,000 canceled options were made available for
subsequent reissuance.
10. LEASES
The Company leases buildings for certain of its restaurants under long-term
operating leases which expire over the next twenty- five years. In
addition to the minimum rental for these leases, the Company also pays, in
certain instances, additional rent based on a percentage of sales, and its
pro rata share of the lessor's direct operating expenditures. Several of
the leases provide for option renewal periods and scheduled rent increases.
Rental expense totaled $1,378,000, $1,637,000 and $1,394,000, including
percentage rent of $262,000, $247,000 and $245,000 for the fiscal years
ended December 31, 1995, January 1, 1995 and January 2, 1994, respectively.
Minimum rental commitments for noncancelable leases as of December 31, 1995
are as follows:
Fiscal Year Ending Amount
------------------ ------
(in thousands)
1996 $1,494
1997 1,498
1998 1,519
1999 1,545
2000 1,462
Thereafter 14,761
------
$22,279
=======
F-13
34
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
11. SUPPLEMENTAL CASH FLOW INFORMATION
During 1995, the Company received $115,000 of its common stock from
the ESOP for partial repayment of the advances to the ESOP. The
common stock received was recorded as treasury stock.
During fiscal 1993, the Company acquired treasury stock of $1,347,000
which was included in accounts payable at January 2, 1994 and was paid
in fiscal 1994. Also, as described in Note 4, $643,000 related to the
repurchase of Debentures was included in accounts payable at January
1, 1995 and was paid during 1995.
Cash paid for interest for fiscal 1995, 1994 and 1993 was $1,489,000,
$2,175,000 and $1,007,000, respectively.
Cash paid for taxes for fiscal 1995, 1994 and 1993 was $2,581,000,
$895,000 and $1,169,000, respectively.
12. RELATED PARTIES
During October 1993, the Company advanced $375,000 to the Chairman of
the Board of Directors (the Chairman). This advance bore interest at
7%. Principal and interest were repaid in December 1993 and March
1994, respectively.
Effective March 9, 1994, the Board of Directors (the Board) authorized
the Company to execute a Guaranty and Suretyship Agreement whereby the
Company guaranteed $5,000,000 of personal indebtedness of the
Chairman. This indebtedness is secured by a pledge of 570,000 common
shares owned by the Chairman. The guaranty provides that the bank
will sell the pledged shares and apply the proceeds thereof to the
loan prior to calling on the Company for its guaranty. A fee of .25%
per annum is charged on the amount of the guarantee. On June 27,
1995, the Board requested the Chairman to refinance his personal
indebtedness with another bank. On December 27, 1995, the Board
authorized the Company to reimburse the Chairman $42,000 for
refinancing costs incurred in executing the request. The Company does
not consider it necessary to provide for a potential loss related to
the guarantee in the financial statements at this time.
13. SUBSEQUENT EVENT
In January 1996, the Company borrowed an additional $7,050,000 on its
revolving line of credit to finance the purchase of land and buildings
for which commitments existed at December 31, 1995.
F-14
35
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
14. QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarterly financial data for fiscal year 1995 and 1994 are summarized
as follows:
First Second Third Fourth
1995 Quarter Quarter Quarter Quarter
---- ------- ------- ------- -------
(in thousands, except per share data)
Sales $22,899 $22,694 $22,758 $23,327
Restaurant operating 3,556 3,547 3,615 3,743
income (a)
Income before income taxes 1,806 1,723 1,733 1,901
Net income 1,005 1,102 1,109 1,216
Earnings per share $.14 $.15 $.15 $.16
First Second Third Fourth
1994 Quarter Quarter Quarter Quarter
---- ------- ------- ------- -------
(in thousands, except per share data)
Sales $20,120 $20,830 $21,226 $21,993
Restaurant operating 2,473 2,159 2,452 2,924
income (a)
Income before income taxes
and extraordinary item 1,003 814 820 1,124
Extraordinary gain (net -- -- -- 484
of tax)
Net income 652 554 549 1,210
Earnings per share from
operations before
extraordinary item $ .09 $ .08 $ .07 $ .10
Earnings per share from
extraordinary gain -- -- -- $ .07
Net income per share $ .09 $ .08 $ .07 $ .17
(a) Sales less food and beverages, labor, restaurant operating expenses
and depreciation and amortization.
F-15
36
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
COOKER RESTAURANT CORPORATION
-----------------------
FORM 10-K ANNUAL REPORT
FOR THE FISCAL YEAR ENDED:
DECEMBER 31, 1995
-----------------------
EXHIBITS
-----------------------
37
EXHIBIT INDEX
EXHIBIT NUMBER OF PAGES INCORPORATED BY
NUMBER DESCRIPTION IN ORIGINAL DOCUMENT + REFERENCE
3.1. Amended and Restated Articles of Incorporation of the
Registrant. 13 *
3.2. Amended and Restated Code of Regulations of the
Registrant. 12 *
4.1. See Articles FOURTH, FIFTH and SIXTH of the
Amended and Restated Articles of Incorporation of the
Registrant (see 3.1 above). 13 *
4.2. See Articles One, Four, Seven and Eight of the
Amended and Restated Code of Regulations of the
Registrant (see 3.2 above). 12 *
4.3. Rights Agreement dated as of February 1, 1990 between
the Registrant and National City Bank. 65 *
4.4. Amendment to Rights Agreement dated as of November
1, 1992 between the Registrant and National City Bank. 1 *
4.5. Letter dated October 29, 1992 from the Registrant to
First Union National Bank of North Carolina. 1 *
4.6. Letter dated October 29, 1992 from National City Bank
to the Registrant. 1 *
4.7. See Section 7.4 of the Amended and Restated Loan
Agreement dated as of December 22, 1995 between the
Registrant and First Union National Bank of
Tennessee (see 10.4 below). 31
4.8. Indenture dated as of October 28, 1992 between
Registrant and First Union National Bank of North
Carolina, as Trustee. 61 *
10.1. Purchase and Sale Agreement dated October 20, 1995
between GMRI, Inc. and Registrant. 17 *
10.2. First Amendment to Purchase and Sale Agreement dated
October __, 1995 between GMRI, Inc. and Registrant. 2 *
10.3. Joinder of Escrow Agreement dated October 25, 1995
among Lawyers Title Insurance Corporation, GMRI,
Inc. and Registrant. 2 *
10.4. Amended and Restated Loan Agreement dated
December 22, 1995 between Registrant and First Union
National Bank of Tennessee. 31 40
10.5. Form of Contingent Employment Agreement and
schedule of executed Agreements. 10 71
10.6. The Registrant's 1988 Employee Stock Option Plan, as
amended and restated. 14 *
10.7. The Registrant's 1992 Employee Stock Option Plan. 13 *
+ The Registrant will furnish a copy of any exhibit to a beneficial owner of its
securities or to any person from whom a proxy was solicited in connection with
the Registrant's most recent Annual Meeting of Shareholders upon the payment of
a fee of fifty cents ($.50) per page.
E-1
38
EXHIBIT NUMBER OF PAGES INCORPORATED BY
NUMBER DESCRIPTION IN ORIGINAL DOCUMENT + REFERENCE
10.8. The Registrant's 1988 Directors Stock Option Plan, as
amended and restated. 6 *
10.9. The Registrant's 1992 Directors Stock Option Plan, as
amended and restated. 6 *
10.10. The Registrant's 1996 Officers' Stock Option Plan 10 81
10.11. Guaranty and Suretyship Agreement dated March 22,
1994 between the Registrant and First Union National
Bank of Tennessee. 7 *
10.12. Reaffirmation and Amendment to Guaranty and
Suretyship Agreement between Registrant and
NationsBank of Tennessee, N.A. dated July 24, 1995. 2 *
10.13. Separation Agreement and General Release dated
October 26, 1994 between Registrant and William Z.
Esch 8 *
23.1. Consent of Price Waterhouse LLP. 1 91
24.1. Powers of Attorney. 10 92
24.2. Certified resolution of the Registrant's Board of Directors
authorizing officers and directors signing on behalf
of the Registrant to sign pursuant to a power of
attorney. 1 93
27.1. Financial Data Schedules (submitted electronically for
SEC information only). 1
+ The Registrant will furnish a copy of any exhibit to a beneficial owner of its
securities or to any person from whom a proxy was solicited in connection with
the Registrant's most recent Annual Meeting of Shareholders upon the payment of
a fee of fifty cents ($.50) per page.
E - 2
39
+ The Registrant will furnish a copy of any exhibit to a beneficial owner of its
securities or to any person from whom a proxy was solicited in connection with
the Registrant's most recent Annual Meeting of Shareholders upon the payment of
a fee of fifty cents ($.50) per page.
E - 3