UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report pursuant section 13 or 15(d) of the Securities and
Exchange Act of 1934 for the quarterly period ended December 31, 1997.
[ ] Transition report pursuant to section 13 or 15(d) of the Securities and
Exchange Act of 1934 for the transition period from _________ to _________.
COMMISSION FILE NUMBER: 0-21932
CALIFORNIA CULINARY ACADEMY, INC.
(Exact name of small business issuer in its charter)
California 94-3042862
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
625 Polk Street
San Francisco, CA 94102
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number: (415) 771-3536
Indicate by check mark whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No .
----- -----
The number of shares outstanding of the registrant's Common Stock as of
December 31, 1997, was 3,771,020.
Transitional Small Business Disclosure Format. Yes No X .
----- -----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CALIFORNIA CULINARY ACADEMY, INC.
BALANCE SHEETS
(IN THOUSANDS)
December 31, June 30, December 31,
1997 1997 1996
------------ ---------- -------------
(UNAUDITED) (NOTE 1) (UNAUDITED)
ASSETS
Current Assets:
Cash and cash equivalents $ 1,293 $2,308 $ 2,264
Accounts receivable 3,397 2,847 3,378
Inventories 291 341 325
Prepaid expenses and other assets 581 531 280
------------ ---------- -------------
Total Current Assets 5,562 6,027 6,247
------------ ---------- -------------
Property and equipment, net 7,000 4,965 4,935
Other assets 646 634 1,082
------------ ---------- -------------
TOTAL ASSETS $13,208 $11,626 $12,264
------------ ---------- -------------
------------ ---------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $1,056 $1,188 $ 982
Deferred revenue 4,011 3,212 3,980
Current portion of long term debt 89 117 77
Other current liabilities 401 444 393
------------ ---------- -------------
Total Current Liabilities 5,557 4,961 5,432
------------ ---------- -------------
Long term debt 1,324 148 226
Other non-current liabilities 438
Convertible Preferred stock 91 953 976
Common stock 10,635 9,649 9,144
Accumulated deficit (4,399) (4,085) (3,952)
------------ ---------- -------------
Total Shareholders' Equity 6,327 6,517 6,168
------------ ---------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $13,208 $11,626 $12,264
------------ ---------- -------------
------------ ---------- -------------
See notes to condensed financial statements
2
CALIFORNIA CULINARY ACADEMY, INC.
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended Six Months Ended
December 31, December 31,
--------------------- ---------------------
1997 1996 1997 1996
-------- -------- -------- --------
Revenues:
Culinary arts education $3,231 $3,022 $6,514 $6,032
Restaurants & catering and other 951 767 1,603 1,286
----------- ---------- ---------- ----------
Total revenues 4,182 3,789 8,117 7,318
Cost of sales
Food & beverage 460 415 886 786
Other cost of sales 390 398 802 729
----------- ---------- ---------- ----------
850 813 1,688 1,515
----------- ---------- ---------- ----------
Gross Margin 3,332 2,976 6,429 5,803
Operating expenses
Occupancy 514 430 958 875
Depreciation & amortization 282 299 551 564
Compensation & benefits 1,684 1,308 3,305 2,639
Outside services 181 180 385 302
Advertising & promotion 209 118 394 266
Legal & other 617 451 1,204 886
----------- ---------- ---------- ----------
3,487 2,786 6,797 5,532
Interest income (expense) (11) 20 5 14
----------- ---------- ---------- ----------
Income (loss) before provision for income taxes (166) 210 (363) 285
Income tax provision (benefit) (34) 84 (70) 114
----------- ---------- ---------- ----------
Net income (loss) $(132) $126 $(293) $171
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
Basic Earnings Per Share $(0.04) $0.03 $0.09 $0.04
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
See notes to condensed financial statements
3
CALIFORNIA CULINARY ACADEMY, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, UNAUDITED)
Six Months Ended December 31,
-----------------------------
1997 1996
-------------- ------------
Cash flows from operating activities:
Net income (loss) $(293) $171
Adjustments to reconcile net income (loss) to net
cash provided by used in operating activities:
Depreciation and amortization 551 565
Tax provision (Benefit) (70) 114
Provision for losses on accounts receivable 54 13
Deferred rent (82) 9
Stock issued for services 31
Gain on disposal of property (10)
Changes in assets and liabilities:
Accounts receivable (604) (605)
Inventories 50 (117)
Prepaid expenses and other assets 27 (136)
Accounts payable and accrued and other liabilities (86) (122)
Deferred revenue 799 184
-------------- ------------
Net cash provided by (used in) operating activities 377 66
-------------- ------------
Cash flows from investing activities:
Acquisition of property and equipment (2,523) (1,319)
Decrease in long-term investments 646
-------------- ------------
Net cash used in investing activities (2,523) (673)
-------------- ------------
Cash flows from financing activities:
Borrowings under long term debt agreements 1,230
Principal payments on long term debt (81) (803)
Proceeds from exercise of stock options and warrants*
(Net a Note Receivable) 61 1,119
Repurchase of common stock (717)
Payment of Preferred Stock dividends (76)
Cost of offering - preferred stock (3) (11)
-------------- ------------
Net cash provided by (used in) financing activities 1,131 (412)
-------------- ------------
Net decrease in cash and cash equivalents (1,015) (1,019)
Cash and cash equivalents, beginning of period 2,308 3,283
-------------- ------------
Cash and cash equivalents, end of period $1,293 $2,264
-------------- ------------
-------------- ------------
See notes to condensed financial statements
4
CALIFORNIA CULINARY ACADEMY, INC.
CONDENSED STATEMENT OF CASH FLOWS
Supplemental disclosure of cash paid for:
For the Six Months Ended
December 31,
------------
1997 1996
------- -------
Interest $41,000 $93,000
Income taxes 1,000 1,000
Supplemental disclosure of non-cash investing and financing activities:
The Academy issued 254,541 shares of Series A Preferred Stock upon conversion of
$1,400,000 of Convertible Subordinated Debt for the six months ended December
31, 1996.
The Academy issued a promissory note of approximately $157,000 for the
repurchase of Common Stock for the three months ended December 30, 1996.
The Academy received promissory notes of approximately $529,000 in exchange for
the exercise of stock options for the six months ended December 31, 1997.
5
CALIFORNIA CULINARY ACADEMY, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared from the
records of the California Culinary Academy, Inc. (the "Academy") without audit
and, in the opinion of management, include all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position at
December 31, 1997, and the interim results of operations and cash flows for the
six months ended December 31, 1997 and December 31, 1996. The balance sheet
at June 30, 1997, presented herein, has been derived from the audited financial
statements of the Academy for the fiscal year then ended.
Accounting policies followed by the Academy are described in Note 1 to the
audited financial statements for the fiscal year ended June 30, 1997. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted for the purposes of the interim condensed financial
statements. The interim condensed financial statements should be read in
conjunction with the audited financial statements including notes thereto, for
the year ended June 30, 1997.
The results of operations for the three months presented herein are not
necessarily indicative of the results to be expected for the full year.
Certain prior year amounts have been reclassified to conform to current year
presentation.
NOTE 2 -- PREFERRED STOCK
During March 1996 and July 1996, the Board of Directors and shareholders,
respectively, authorized the Academy to issue up to 5,000,000 shares of
Preferred Stock in one or more series to be determined by the Board of Directors
from time to time. An amendment to the Articles of Incorporation authorizing
the issuance of Preferred Stock was filed with the California Secretary of State
in August 1996. On August 23, 1996, the Academy became legally authorized to
issue up to 700,000 shares of Series A Preferred Stock. On the same date, the
entire issue of Convertible Subordinated Notes in the aggregate principal amount
of $1,400,000 automatically converted to 254,500 shares of Series A Preferred
Stock. The preferred stock was recorded net of $447,000 of issuance costs.
The non-redeemable Series A Preferred Stock into which the Notes converted
provides for quarterly dividends at an annual rate of 7.5% per share from the
date of first issuance, when and if declared by the Board of Directors, with a
liquidation preference of $5.50 per share, plus accrued dividends. Although the
Series A Preferred Stock is nonvoting, in the event the Academy fails to pay a
quarterly dividend, a meeting of the Board of Directors can be called at which
the holders of the Series A Preferred Stock will be entitled to elect one-third
of the Academy's Board of Directors. Upon payment of the missed dividend(s),
the right to elect one-
6
third of the Board will be rescinded. Each share of Series A Preferred Stock is
convertible at the option of the holder into the Academy's Common Stock at the
conversion price of $5.50 per share. After February 23, 1997, each share of
Series A Preferred Stock will convert automatically if the closing price of the
Common Stock equals or exceeds $8.00 for 20 consecutive trading days. Certain
provisions for price protection are set forth in the terms of the Series A
Preferred Stock, but in no event will the conversion price be less than $3.50.
The Academy granted certain registration rights to the holders of the
Convertible Notes (and subsequently, the Preferred shareholders). Certain
penalties were payable to the holders of the Series A Preferred Stock if the
Academy did not use its best efforts to file a registration statement to
register for resale the Common Stock underlying the Series A Preferred Stock
conversion right with an effective date not later than November 23, 1996. Such
registration statement was declared effective on April 15, 1997. Penalties
payable to the Series A Preferred shareholders were accrued as of June 30, 1997
and paid in July 1997. A total of 6,300 shares of Series A Preferred Stock and
$35,000 in cash was distributed in connection with this penalty.
During the three months and 6 months ended December 31, 1997, certain Series
A Preferred Stock shareholders elected to convert approximately 165,000 and
73,000 shares into Common Stock, respectively.
NOTE 3 -- MASTER LEASE AGREEMENT
On July 21, 1997 the Academy entered into a master lease agreement for a 68 room
hotel in San Francisco. This lease commenced on September 1, 1997 and expires
August 31, 2012, and requires initial monthly payments of $27,083 with a step
rent clause increasing payments to 33,333 by the end of the lease. The master
lease also requires payment of a pro-rata share of common area maintenance.
NOTE 4 -- RELATED PARTY TRANSACTIONS
On December 15, 1997, the Chairman of the Board and another member of the Board
elected to exercise approximately 108,000 and 15,000 vested stock options
respectively. In exchange, as permitted by the Academy's 1992 Stock Option
Plan, each director delivered to the Academy a promissory note for the value of
the stock options in the amount of approximately $465,000 and $62,000,
respectively. The notes bear an interest rate of 9.5% and are due no later than
June 30, 1998.
NOTE 5 -- ACQUISITION OF PROPERTY
On October 3, 1997 the Academy purchased for approximately $1,900,000 a 70 room
residential hotel adjacent to the Academy's main campus in San Francisco to
provide student housing. In connection with this purchase, the Academy issued a
promissory note of $1,200,000 with principal and interest payments due monthly.
The initial monthly payment of $10,434 will commence on December 1, 1997. The
note bears interest at a variable rate based on the LIBOR index rate plus 4.15%
(9.75% as of October 3, 1997) and mature on November 1, 2007.
7
NOTE 6 - EARNINGS PER SHARE
The components of basic and diluted earning per share are as follows:
THREE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
-------- ------ ------- -------
Net Income ($132) $125 ($293) $171
Less: preferred stock dividends (6) (27) (21) (37)
Less: convertible note interest expense (9) (9)
-------- ------ ------- -------
Income available to common shareholders (138) 89 (314) 125
Weighted average shares outstanding 3,636 3,229 3,581 3,229
-------- ------ ------- -------
BASIC EARNINGS PER SHARE ($0.04) $0.03 ($0.09) $0.04
-------- ------ ------- -------
-------- ------ ------- -------
EFFECT OF DILUTIVE SECURITIES
Add: preferred stock dividends 6 27 21 37
Add: convertible note interest expense 0 9 0 9
-------- ------ ------- -------
Income available to common shareholders (132) 125 (293) 171
Weighted average shares outstanding 3,636 3,229 3,581 3,229
Add: Stock options and warrants 137 136
Add: convertible preferred stock 254 205
-------- ------ ------- -------
Weighted average shares outstanding 3,636 3,620 3,581 3,570
-------- ------ ------- -------
DILUTED EARNINGS PER SHARE ($0.04) $0.03 ($0.09) $0.04
-------- ------ ------- -------
-------- ------ ------- -------
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following discussion should be read in conjunction with the financial
statements and notes thereto.
The Academy's revenues are derived primarily from culinary arts education as
well as restaurant, retail and media operations. Culinary arts education
primarily consists of the AOS Program, the B&P Certificate program, the College
of Food Basic Professional Culinary Skills Program, and weekend professional
skills program offerings. The AOS Program enrolls students on a two-week cycle.
The program can accommodate up to 25 students per class. The 30-week B&P
Program enrolls classes on a five week cycle typically ranging in size from 15
to 20 students with five classes enrolled as of December 31, 1997. The College
of Food programs commenced October 14, 1996 at the Academy's prototype facility
in Salinas, California. As of December 31, 1997, approximately 52 students are
enrolled in the Basic Professional Culinary Skills program in Salinas. The
College of Food enrolls students every three to four weeks. Weekend
professional programs are currently offered every eight or fourteen weeks. As
of December 31, 1997, the Academy has 35 students enrolled in various weekend
professional programs.
Consumer education consists of programs oriented to a part-time audience. The
course length and content address the interests of food industry professionals,
home cooks and career changers. These courses include single topic classes and
various three or four class series current topics and basic skills.
Restaurant and retail operations include two restaurants and a private dining
room which is generally open to the public seven days per week, banquet services
generally offered seven days per week and a small on-site retail shop offering
student-prepared foods, beverages, cookbooks, video tapes, kitchen wares and
selected clothing. Media operations primarily consist of the marketing of the
Cooking at the Academy television series and cookbook royalties. Certain
expenses such as food costs and costs of goods sold related to both educational
services and retail restaurant operations.
Revenues from the Academy's AOS Program and the B&P Program rely exclusively on
enrollments in those programs. Tuition is initially recorded as deferred
revenue at the commencement of each enrollment period and recognized over the
length of program as students complete course work required for graduation.
The Academy has available housing for students enrolled in the AOS and B&P
programs. In July 1997, the Academy entered into a master lease of a 68-room
hotel in San Francisco, approximately one block from the main campus, to provide
student housing. In October 1997, the Academy purchased for approximately
$1,900,000 a hotel building in San Francisco, across the street from its main
campus, which it intends to use for student housing. Management
9
believes available student housing will have a favorable impact on new student
enrollments and student retention rates.
The Academy believes that manageable growth is achievable through the addition
of extension campuses offering selected courses from the AOS Program at training
facilities such as its College of Food at Salinas, California and by the
addition of contract training programs offered to the food industry. While
management believes that this strategy will enable it to significantly increase
revenues by providing additional educational and training resources to the food
industry, there can be no assurance that management will be able to successfully
implement such a strategy.
Except for historical information contained herein, this report contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The
forward-looking statements contained herein are based upon current expectations,
and actual results may differ materially. Forward-looking statements contained
in this Report involve numerous risks and uncertainties, including those
discussed in this Report and the Academy's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1997, that could cause actual results to differ
materially from those projected. Investors are cautioned not to place undue
reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. The Academy undertakes no obligation to
publicly release the results of any revision to these forward-looking statements
that may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
The primary risks and uncertainties that could affect future results include,
without limitation, (i) the event of a net loss of $999,000 for the year ended
June 30, 1996 from which there can be no assurance that the recent efforts will
be successful in achieving profitable operations, or if achieved, that
profitability can be sustained in future periods; (ii) the inability of
management to successfully implement and manage the Academy's new growth
strategy of adding more remote training facilities and new programs to be
offered to the foodservice industry; (iii) uncertainties associated with
overhauling the structure of the A.O.S. degree program enrollment process and
the inability of the Academy to make appropriate adjustments in a timely manner;
(iv) the increased competition from both for-profit and non-profit culinary arts
education institutions; (v) the continued dependence on financial aid programs
to fund a majority of Academy's students' education, thereby providing a
significant portion of the Academy's revenues, together with the uncertainty
that budgetary constraints or other factors in the future could impact the
availability and amount of both public and private sources of financial aid;
(vi) increase of the Academy's cohort default rate, the percentage of Academy
students who have defaulted on repayment of government student loans, which
could in the future impair or limit the Academy's participation in government
financial aid programs; and (vii) the possibility that regulatory agencies that
directly or indirectly impact aspects of the Academy's business could revise
regulations in such a way that the Academy would not be able to comply with new
regulations in a timely manner.
Investors are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis only as of the date hereof. The
Academy undertakes no obligation to publicly release the results of any revision
to these forward-looking statements that may be
10
made to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
RESULTS OF OPERATIONS
REVENUES
Culinary arts education revenue increased 6.9% to $3,231,000 for the quarter
ended December 31, 1997 from $3,022,000 reported in the same period last year.
Culinary arts education revenue increased 8.0% to $6,514,000 for the six months
ended December 31, 1997 from $6,032,000 reported in the same period last year.
The increase in culinary arts education revenue is due primarily to a 16.8%
increase in student enrollment in certificate and degree programs as of December
31, 1997; offset by a reduction in consumer education revenues as a result of
the discontinuation of the program during the quarter ended June 30, 1997.
Restaurant & catering and other revenue increased 24.0% to $951,000 for the
quarter ended December 31, 1997 from $767,000 in the same period last year.
Restaurant & catering and other revenue increased 24.7% to $1,603 for the six
months ended December 31, 1997 from $1,286 in the same period last year. The
increase is due primarily to increase banquet and catering activity in the
Academy's two restaurants.
COST OF SALES
Food and beverage cost increased 10.8% to $460,000 for the quarter ended
December 31, 1997 from $415,000 reported in the same period last year. Food and
beverage cost increased 12.7% to $886,000 for the six months ended December 31,
1997 from $786,000 reported in the same period last year. Food and beverage cost
increased in dollar amounts as the Academy incurred higher costs primarily
associated with an increase in culinary arts education revenue and restaurant
and catering revenue. The increase in food and beverage cost as a percent of
related culinary arts education and restaurant revenue is consistent with the
comparable periods last year.
Other costs decreased 2.0% to $390,000 for the quarter ended December 3, 1997
from $398,000 reported in the same period last year. Other costs increased 10.0%
to $802,000 for the six months ended December 31, 1997 from $729,000 for the
same period last year. The decrease for the quarter ended December 31, 1997 is
attributed to lower cost of merchandise associated with decreased merchandise
sales in the Academy's retail store; offset by increased decoration and
entertainment expenses associated with the increased restaurant revenue. The
increase for the six months ended December 31, 1997 is due primarily to student
program supplies costs as a result of increased enrollment levels and increased
decoration and entertainment expenses associated with the increased restaurant
revenue.
OPERATING EXPENSES
Occupancy cost increased 19.5% to $514,000 for the quarter ended December 31,
1997 from $430,000 for the same period last year. Occupancy cost increased 9.5%
to $958,000 for the six months ended December 31, 1997 from $875,000 in the same
period last year. The increase is
11
due primarily to the lease of a 68 room residential hotel in September 1997 and
the purchase of a 70 room residential hotel on October 1997; offset by reduction
in rent for the Academy's main campus facility as a result of lease
renegotiation completed in May 1997.
Depreciation and amortization decreased 5.7% to $282,000 for the quarter ended
December 31, 1997 from $299,000 for the same period last year. Depreciation and
amortization decreased 2.3% to $551,000 for the six months ended December 31,
1997 from $564,000 for the same period last year. The decrease is due primarily
to lower expense as a result of the renegotiated lease for the Academy's main
campus facility offset by the depreciation expense associated with the purchase
of a 70 room residential hotel and continued investment to improve kitchen
facilities and information systems.
Compensation and benefits cost increased 28.7% to $1,684,000 for the quarter
ended December 31, 1997 from $1,308,000 for the same period last year.
Compensation and benefits cost increased 25.2% to $3,305,000 for the quarter
ended December 31, 1997 from $2,639,000 for the same period last year. The
increase is due primarily to addition of faculty as a result of the increase in
student enrollments; addition of staff in the College of Food to support
increase enrollment and the opening of a second campus in San Diego in February
1998; addition of administrative and marketing staff to support growth in
enrollments and revenue; and normal cost increases for wages.
Outside services cost increased 0.6% to $181,000 for the quarter ended December
31, 1997 from $180,000 for same period last year. Outside services cost
increased 27.5% to $385,000 for the six months ended December 31, 1997 from
$302,000 for same period last year. The increase is due primarily to increased
board of directors fees begun in June 1997 and retention of consultants to
assist with documentation of new education programs and filing with Federal
Department of Education and State regulatory agencies.
Advertising and promotion cost increased 77.1% to $209,000 for the quarter
ended December 31, 1997 from $118,000 for the same period last year. Advertising
and promotion cost increased 48.1% to $394,000 for the quarter ended December
31, 1997 from $266,000 for the same period last year. The increase is due
primarily to additional expenditures for convention and conferences attended to
promote enrollments; and the sponsorship of a week-end street fair at the San
Francisco campus to celebrate the Academy's twentieth anniversary.
Legal and other cost increased 36.8% to $617,000 for the quarter ended December
31, 1997 from $451,000 for the same period last year. Legal and other cost
increased 35.9% to $1,204,000 for the six months ended December 31, 1997 from
$886,000 for the same period last year. The increase is primarily due to legal
representation and settlement costs related to a wrongful
termination lawsuit, which was settled in September 1997.
INTEREST INCOME (EXPENSE), NET
Interest income (expense), net consists primarily of interest earned on cash
equivalents and short-term investments and interest expense incurred on a
$1,200,000 promissory note issued in connection with the Academy's purchase of a
70 room residential hotel in October 1997
12
INCOME TAX PROVISION (BENEFIT)
The Academy has provided for federal and state income taxes at 20% for the
quarter and six months ended December 31, 1997 and compared to a effective tax
rate of 40% for the same comparable periods last year. The decrease in
effective tax rate is the result of net operating losses incurred through
December 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Academy financed its growth from the issuance of equity
securities in private and public transactions, borrowings from related parties,
lease and debt financing obligations and through cash flow provided by
operations.
At December 31, 1997, the Academy's principal sources of liquidity included
cash and cash equivalents of $1,293,000 and net accounts receivable of
$3,397,000 compared to $2,308,000 and $2,847,000 as of June 30, 1997,
respectively. The decrease in cash and cash equivalents is due primarily to
the Academy's using cash and cash flow from operations to fund capital
expenditures and the acquisition of a hotel to be used for student housing.
The increase in net accounts receivable is due primarily to increased
enrollments. The Academy has long-term obligations of $1,324,000 and working
capital of $534,000 at December 31, 1997 compared to $148,000 and $1,066,000
as of June 30, 1997, respectively.
As of December 31, 1997, the Academy had $1,200,000 outstanding loans with
banks. As of June 30, 1997, the Academy had no outstanding term loans with
banks and $50,000 in other term loans.
13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are various legal claims and lawsuits pending by and against the Academy
that, in the opinion of management, after consultation with legal counsel, are
not expected to have in any material adverse effect on the results of operations
or financial position of the Academy.
Item 2. Changes in Securities None
Item 3. Defaults upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders None
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K
(a.) Exhibits
Exhibit No. Description
----------- --------------------------------------------------
10.35 Real estate purchase agreement for 622-632 Polk
Street, San Francisco, California
10.36 Promissory note with Imperial Thrift Savings
10.37 Promissory note from Theodore Crocker
10.38 Promissory note from Grover Wickersham
11.0 Statement re: Computation of Earnings per Share
27.0 Financial Data Schedule
(b.) Reports on Form 8-K None
14
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, as
amended, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CALIFORNIA CULINARY ACADEMY, INC.
February 19, 1998 By: /s/ Keith H. Keogh
---------------------------------------------
President
February 19, 1998 By: /s/ Thomas Spanier
---------------------------------------------
Chief Financial Officer
(Principal Financial and Accounting Officer)
February 19, 1998 By: /s/ Peter Richmond
---------------------------------------------
Director of Finance
15