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EXHIBIT 13.2
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JANUARY 1, 1995
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-9573
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UNO RESTAURANT CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 04-2953702
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Charles Park Road, West Roxbury, Massachusetts 02132
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(Address of principal executive offices) (Zip Code)
(617) 323-9200
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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As of January 31, 1995, 9,099,229 shares of the registrant's Common Stock,
$.01 par value, were outstanding.
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UNO RESTAURANT CORPORATION
INDEX
Page
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PART I. FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS.........................................3
Consolidated Balance Sheets --
January 1, 1995 and October 2, 1994..........................3
Consolidated Statements of Income --
Thirteen weeks ended
January 1, 1995 and January 2, 1994..........................4
Consolidated Statements of Cash Flows --
Thirteen weeks ended January 1, 1995 and
January 2, 1994..............................................5
Notes to Consolidated Financial
Statements...................................................6
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS....................................7
PART II. OTHER INFORMATION
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.............................9
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3
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except share data)
Jan. 1, Oct. 2,
1995 1994
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(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 169 $ 961
Royalties receivable 466 553
Consumer products receivables 515 473
Inventory 1,869 1,744
Prepaid expenses 1,675 990
Deferred pre-opening costs 805 568
Deferred income taxes 193 139
Other current assets 649 610
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TOTAL CURRENT ASSETS 6,341 6,038
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Land 8,336 7,601
Buildings 11,455 9,729
Leasehold improvements 61,275 55,657
Equipment 34,915 31,797
Construction in progress 4,959 2,870
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120,940 107,654
Less allowance for depreciation and amortization 29,575 27,597
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91,365 80,057
OTHER ASSETS
Deposit 3,000
Deferred income taxes 1,365 1,303
Royalty fee 467 487
Liquor licenses and other assets 3,108 1,336
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$102,646 $ 92,221
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 5,733 $ 5,006
Accrued expenses 4,763 4,064
Accrued compensation and taxes 1,808 2,357
Income taxes payable 917 654
Current portion--bank loan 3,400 3,400
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TOTAL CURRENT LIABILITIES 16,621 15,481
LONG-TERM DEBT 24,878 17,303
CAPITAL LEASE OBLIGATION 804 820
DEFERRED RENT 2,805 2,659
SHAREHOLDERS' EQUITY
Preferred Stock, $1.00 par value, 1,000,000 shares
authorized, none issued
Common Stock, $.01 par value, 12,000,000 shares auth-
orized, 9,086,998 and 9,072,499 shares issued and out-
standing in Fiscal Years 1995 and 1994, respectively 91 91
Additional paid-in capital 30,673 30,613
Retained earnings 26,774 25,254
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TOTAL SHAREHOLDERS' EQUITY 57,538 55,958
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$102,646 $ 92,221
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CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands except per share data)
Thirteen Weeks Ended
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Jan 1, Jan 2,
1995 1994
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REVENUES
Restaurant sales $32,894 $24,861
Consumer product sales 2,108 1,721
Franchise income 974 985
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35,976 27,567
COSTS AND EXPENSES
Cost of sales 9,067 6,813
Labor and benefits 10,660 8,304
Occupancy 5,310 4,216
Other operating costs 3,189 2,513
General and administrative 2,697 2,195
Depreciation and amortization 2,267 1,771
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33,190 25,812
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OPERATING INCOME 2,786 1,755
OTHER INCOME (EXPENSE) (371) 25
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Income before income taxes 2,415 1,780
Provision for income taxes 895 721
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NET INCOME $ 1,520 $ 1,059
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EARNINGS PER COMMON SHARE $.16 $.12
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Weighted average shares outstanding 9,297 9,116
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Thirteen weeks Ended
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Jan 1, Jan 2,
1995 1994
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OPERATING ACTIVITIES
Net Income $ 1,520 $ 1,059
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,283 1,799
Credit for deferred income taxes (116) 204
Gain on disposal of equipment (4) (327)
Changes in operating assets and liabilities:
Decrease in receivables 45 7
Increase in inventory (126) (54)
Increase in other assets and prepaid expenses (1,263) (191)
Increase in accounts payable and
accrued expenses 877 34
(Decrease) Increase in income taxes payable 263 (339)
Increase in deferred rent 146 187
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NET CASH PROVIDED BY OPERATING ACTIVITIES $ 3,625 $ 2,379
INVESTMENT ACTIVITIES
Additions to improvements and equipment (11,738) (4,643)
Proceeds from sale of fixed assets 4 2,510
Decrease in deposits 3,000
Business acquisition, less cash acquired (3,301) (1,800)
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NET CASH USED FOR INVESTING ACTIVITIES (12,035) (3,933)
FINANCING ACTIVITIES
Proceeds from revolving credit agreement 15,915 6,165
Principal payments on revolving credit agreement
and capital lease obligations (8,357) (5,330)
Exercise of stock options 60 15
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NET CASH PROVIDED BY FINANCING ACTIVITIES 7,618 850
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DECREASE IN CASH AND CASH EQUIVALENTS (792) (704)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 961 998
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CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 169 $ 294
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Certain amounts in fiscal 1994 have been reclassified to permit comparison.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - Basis of Presentation
The accompanying unaudited, consolidated financial statements have been
prepared in accordance with instructions to Form 10-Q and, therefore, do not
include all information and footnotes normally included in financial statements
prepared in conformity with generally accepted accounting principles. They
should be read in conjunction with the financial statements of the company for
the fiscal year ended October 2, 1994.
The accompanying financial statements include all adjustments (consisting
only of normal recurring accruals) that management considers necessary for a
fair presentation of its financial position and results of operations for the
interim periods presented.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following table sets forth the percentage relationship to total revenues,
unless otherwise indicated, of certain items included in the Company's income
statements and operating data for the period indicated:
THIRTEEN WEEKS ENDED JANUARY 1, 1995 COMPARED TO THIRTEEN WEEKS ENDED JANUARY 2,
1994
13 Weeks 13 Weeks
Ended Ended
1/1/95 1/2/94
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REVENUES:
Restaurant sales 91.4% 90.2%
Consumer product sales 5.9 6.2
Franchise income 2.7 3.6
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Total 100.0% 100.0%
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COSTS AND EXPENSES:
Cost of food & beverages (1) 25.9% 25.6%
Labor and benefits (1) 30.5 31.2
Occupancy costs (1) 15.2 15.9
Other operating costs (1) 9.1 9.5
General and administrative 7.5 8.0
Depreciation and amortization (1) 6.5 6.7
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Operating income 7.7 6.4
Other income (expense) (1.0) --
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Income before taxes 6.7 6.4
Provision for income taxes 2.5 2.6
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Net income 4.2 3.8
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(1) Percentage of restaurant and consumer product sales
NUMBER OF RESTAURANTS
AT END OF QUARTER:
Company-owned Uno's full service 66 57
Franchised Uno's - full service 59 58
Total revenue which increased 30.5% to $36.0 million from $27.6 million last
year. Company-owned restaurant sales rose 32.3% to $32.9 million from $24.9
million last year due primarily to 18% growth in store operating weeks of
full-service Pizzeria Uno units and the acquisition of three Bay Street Seafood
restaurants. Comparable-store sales for Uno units for the first three months of
the fiscal year were 7.4% above the same period last year. For the seventh
consecutive quarter, the company has realized positive comparable-store sales
gains.
Consumer product sales increased 22.5% to $2,108,000 from $1,721,000 for the
first quarter this year. The growth within the core New England region
especially of private label products remains strong and test shipments of a new
frozen product outside of the New England market have generated several new
distribution opportunities.
Franchise income, which includes royalty income and initial franchise fees,
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declined slightly to $974,000 from $985,000 last year. Royalty income increased
5.5% due to average weekly sales gains of 3.4% for the first three months of the
fiscal year. Initial franchise fees amounted to $30,000 this year compared to
$90,000 last year due to the opening of one new unit during the first three
months of this year versus the four openings of last year.
Operating income for the first quarter of the fiscal year improved to $2,786,000
from $1,755,000 last year. The operating margin for the period increased to
7.7% from 6.4%. The principal factors which impacted the operating margin were:
labor costs declined as a percentage of sales due to operating efficiencies and
the leverage of higher unit sales; occupancy costs were lower as a result of
several property purchases and the benefits of higher average sales; other
operating, general and administrative and depreciation/amortization expenses all
declined on a sales percentage basis due primarily to the operating leverage
realized by the company's sales growth. Increased cost of food and beverage as
a percentage of sales reflects changes in sales mix due to expansion of our
non-pizza menu offerings, however, it was the sales mix change that accounted
for most of the gain in comparable-store sales.
Other expense of $371,000 for the period compared unfavorably against other
income of $25,000 last year. Other income last year resulted primarily from a
gain on the sale of an Orlando, Florida restaurant to a franchisee. Net
interest expense this year was approximately $96,000 higher than last year. The
effective tax rate of 37% for the quarter compared favorably to last year's rate
of 40.5% due in part to the FICA tip credit, which was effective on January 1,
1994. Net income increased 40% to $1,520,000 from $1,059,000 last year based on
the factors noted above.
Liquidity and Sources of Capital
Capital expenditures of $11,738,000 during the three months of fiscal 1995 were
funded by cash flow from operations and loan proceeds from the Company's
revolving credit facility. The Company has expanded its credit facility from
$20 million to $50 million and believes that sufficient cash will be available
from operations and its new credit facility to finance development plans for the
foreseeable future.
The Company is currently obligated under 80 leases, including 77 leases for
Company-owned restaurants, two leases for its executive offices, and a lease for
an office building containing one of its restaurants.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11. Statement re: computation of per share earnings
(b) Reports on Form 8-K - Uno Restaurant Corporation filed a Form 8-K
dated November 23, 1994, during the quarter ended January 1,
1995, indicating that on November 15, 1994, the Board of
Directors of Uno Restaurant Corporation declared a 25% stock
split to be effected in the form of a stock dividend payable in
shares of the Company's common stock, $.01 par value, on February
28, 1995 to stockholders of record of the Corporation on February
8, 1995.
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SIGNATURES
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.
UNO RESTAURANT CORPORATION
(Registrant)
Date: February 14, 1995 By: /s/ Craig S. Miller
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Craig S. Miller
President
Date: February 14, 1995 By: /s/ Robert M. Brown
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Robert M. Brown
Senior Vice President-Finance,
and Chief Financial Officer
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Exhibit 11
Statement re: computation of per share earnings
Thirteen Weeks Ended
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Jan 1, Jan 2,
1995 1994
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Weighted average shares
outstanding 9,076,582 8,978,950
Common Stock equivalents:
Stock options 220,342 136,642
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9,296,924 9,115,592
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Net Income $1,520,000 $1,059,000
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EARNINGS PER COMMON SHARE $ .16 $ .12
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