[
X
]
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 [FEE REQUIRED]
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 [NO FEE REQUIRED]
|
Texas
|
76-0493269
|
(State
or other jurisdiction of
incorporation
or organization)
|
(IRS
Employer Identification Number)
|
1135
Edgebrook, Houston, Texas
|
77034-1899
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Part
I
|
Page
|
|
Special
Note Regarding Forward-Looking Statements
|
3
|
|
Business
|
4
|
|
Risk
Factors
|
11
|
|
Unresolved
Staff Comments
|
14
|
|
Properties
|
14
|
|
Legal
Proceedings
|
15
|
|
Submission
of Matters to a Vote of Security Holders
|
15
|
|
Part
II
|
||
Market
for the Registrant’s Common Equity, Related Shareholder Matters and Issuer
Purchases of Equity Securities
|
15
|
|
Selected
Financial Data
|
17
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
18
|
|
Quantitative
and Qualitative Disclosures about Market Risk
|
26
|
|
Financial
Statements and Supplementary Data
|
26
|
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
26
|
|
Controls
and Procedures
|
26
|
|
Other
Information
|
27
|
|
Part
III
|
||
Directors
and Executive Officers of the Registrant and Corporate
Governance
|
27
|
|
Executive
Compensation
|
27
|
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Shareholder Matters
|
28
|
|
Certain
Relationships and Related Transactions and Director
Independence
|
28
|
|
Principal
Accountant Fees and Services
|
28
|
|
Part
IV
|
||
Exhibits
and Financial Statement Schedules
|
28
|
Ÿ
|
Offering
consistent, high-quality, original recipe Mexican menu items that
reflect
both national and local taste
preferences;
|
Ÿ
|
Pricing
its menu offerings at levels below many family and casual-dining
restaurant concepts;
|
Ÿ
|
Selecting,
training and motivating its employees to enhance customer dining
experiences and the friendly casual atmosphere of its
restaurants;
|
Ÿ
|
Providing
customers with the friendly, attentive service typically associated
with
more expensive casual-dining experiences;
and
|
Ÿ
|
Reinforcing
the perceived value of the dining experience with a comfortable
and
inviting Mexican decor.
|
1) |
matching
the customer profile of the respective restaurant concept to the
profile
of the population of the target local
market;
|
2) |
easy
site accessibility, adequate parking, and prominent visibility of
each
site under consideration;
|
3) |
the
site’s strategic location within the
marketplace;
|
4) |
the
site’s proximity to the major concentration of shopping centers within
the
market;
|
5) |
the
site’s proximity to a large employment base to support the lunch segment;
and
|
6) |
the
impact of competition from other restaurants in the
market.
|
Casa
Olé
|
|||
Company-operated
|
30
|
Leased
|
|
Franchisee-operated
|
17
|
||
Concept
total
|
47
|
||
Monterey’s
Tex-Mex Café
|
|||
Company-operated
|
5
|
Leased
|
|
Concept
total
|
5
|
||
Monterey’s
Little Mexico
|
|||
Company-operated
|
11
|
Leased
|
|
Licensee-operated
|
1
|
||
Concept
total
|
12
|
||
Tortuga
Coastal Cantina
|
|||
Company-operated
|
4
|
Leased
|
|
Concept
total
|
4
|
||
La
Señorita
|
|||
Company-operated
|
5
|
Leased
|
|
Franchisee-operated
|
1
|
||
Concept
total
|
6
|
||
Crazy
Jose’s
|
|||
Company-operated
|
3
|
Leased
|
|
Concept
total
|
3
|
||
Mission
Burritos
|
|||
Company-operated
|
2
|
Leased
|
|
System
total
|
79
|
||
HIGH
|
LOW
|
||
Fiscal
Year 2007:
|
|||
First
Quarter (as of March 28, 2007)
|
11.70
|
9.36
|
|
Fiscal
Year 2006:
|
|||
First
Quarter (ended April 2, 2006)
|
13.33
|
10.00
|
|
Second
Quarter (ended July 2, 2006)
|
13.50
|
9.14
|
|
Third
Quarter (ended October 1, 2006)
|
11.00
|
9.64
|
|
Fourth
Quarter (ended December 31, 2006)
|
11.99
|
9.90
|
Fiscal
Year 2005:
|
|||
First
Quarter (ended April 3, 2005)
|
10.50
|
8.50
|
|
Second
Quarter (ended July 3, 2005 )
|
10.42
|
7.79
|
|
Third
Quarter (ended October 2, 2005 )
|
10.50
|
8.69
|
|
Fourth
Quarter (ended January 1, 2006 )
|
12.06
|
9.17
|
|
|
Fiscal
Years
|
||||||||||||||||
(In
thousands, except share and per share amounts)
|
||||||||||||||||
2002
|
2003
|
2004
|
2005
|
2006
|
||||||||||||
Income
Statement Data:
|
||||||||||||||||
Revenues:
|
||||||||||||||||
Restaurant
sales
|
$
|
49,981
|
$
|
50,244
|
$
|
74,035
|
$
|
76,902
|
$
|
81,379
|
||||||
Franchise
fees, royalties and other
|
1,181
|
1,139
|
753
|
694
|
825
|
|||||||||||
Business
interruption
|
105
|
--
|
--
|
534
|
60
|
|||||||||||
51,266
|
51,383
|
74,788
|
78,130
|
82,264
|
||||||||||||
Costs
and expenses:
|
||||||||||||||||
Cost
of sales
|
13,455
|
13,829
|
20,473
|
20,915
|
22,429
|
|||||||||||
Restaurant
operating expenses
|
27,837
|
28,344
|
40,793
|
42,818
|
45,731
|
|||||||||||
General
and administrative
|
5,198
|
5,306
|
6,587
|
6,942
|
7,717
|
|||||||||||
Depreciation
and amortization
|
1,721
|
1,867
|
2,136
|
2,684
|
3,131
|
|||||||||||
Asset
impairments
|
--
|
266
|
322
|
-
|
544
|
|||||||||||
Gain
on disposal of assets - Hurricane Rita
|
--
|
--
|
--
|
(472
|
)
|
(367
|
)
|
|||||||||
(Gain)
loss on sale of assets
|
(28
|
)
|
(292
|
)
|
180
|
368
|
32
|
|||||||||
48,183
|
49,320
|
70,491
|
73,255
|
79,217
|
||||||||||||
Operating
income
|
3,083
|
2,063
|
4,297
|
4,875
|
3,047
|
|||||||||||
Other
income (expense), net
|
(85
|
)
|
(97
|
)
|
(459
|
)
|
(404
|
)
|
(303
|
)
|
||||||
Income
before income tax expense
|
2,998
|
1,966
|
3,838
|
4,471
|
2,744
|
|||||||||||
Income
tax expense
|
1,003
|
712
|
1,269
|
1,475
|
849
|
|||||||||||
Income
from continuing operations
|
1,995
|
1,254
|
2,569
|
2,996
|
1,895
|
|||||||||||
Discontinued
Operations
|
||||||||||||||||
Loss
from discontinued operations, net of taxes
|
(291
|
)
|
(2,289
|
)
|
(808
|
)
|
(679
|
)
|
(757
|
)
|
||||||
Net
income (loss)
|
$
|
1,704
|
$
|
(
1,035
|
)
|
$
|
1,761
|
$
|
2,317
|
$
|
1,138
|
2002
|
2003
|
2004
|
2005
|
2006
|
||||||||||||
Basic
income (loss) per share:
|
||||||||||||||||
Income
from continuing operations
|
$
|
0
.57
|
$
|
0.37
|
$
|
0.76
|
$
|
0.88
|
$
|
0.55
|
||||||
Loss
from discontinued operations
|
(0.08
|
)
|
(0.68
|
)
|
(0.24
|
)
|
(0.20
|
)
|
(0.22
|
)
|
||||||
Net
income (loss)
|
$
|
0.49
|
$
|
(0.31
|
)
|
$
|
0.52
|
$
|
0.68
|
$
|
0.33
|
|||||
Diluted
income (loss) per share:
|
||||||||||||||||
Income
from continuing operations
|
$
|
0.56
|
$
|
0.37
|
$
|
0.70
|
$
|
0.81
|
$
|
0.53
|
||||||
Loss
from discontinued operations
|
(0.08
|
)
|
(0.68
|
)
|
(0.22
|
)
|
(0.18
|
)
|
|
(
0.21
|
)
|
|||||
Net
income (loss)
|
$
|
0.48
|
$
|
(0.31
|
)
|
$
|
0.48
|
$
|
0.63
|
$
|
0.32
|
|||||
Weighted
average shares - Basic
|
3,447,957
|
3,384,605
|
3,388,489
|
3,415,806
|
3,402,207
|
|||||||||||
Weighted
average shares - Diluted
|
3,520,769
|
3,384,605
|
3,634,849
|
3,700,876
|
3,521,587
|
As
of the End of Fiscal Years
|
||||||||||||||||
2002
|
2003
|
2004
|
2005
|
2006
|
||||||||||||
(In
thousands)
|
||||||||||||||||
Balance
Sheet Data:
|
||||||||||||||||
Working
capital (deficit)
|
$
|
(2,736
|
)
|
$
|
(2,669
|
)
|
$
|
(1,359
|
)
|
$
|
(1,632
|
)
|
$
|
(1,928
|
)
|
|
Total
assets
|
$
|
28,983
|
$
|
25,861
|
$
|
32,326
|
$
|
33,137
|
$
|
33,276
|
||||||
Long-term
debt, less current
portion
|
$
|
3,400
|
$
|
1,775
|
$
|
6,000
|
$
|
4,500
|
$
|
3,800
|
||||||
Total
stockholders’ equity
|
$
|
16,948
|
$
|
15,954
|
$
|
17,868
|
$
|
18,884
|
$
|
20,573
|
Contractual
Obligation
|
Total
|
Less
than
1
Year
|
1
to 3
Years
|
3
to 5
Years
|
More
Than
5
Years
|
|||||||||||
Long-Term
Debt
|
$
|
3,800,000
|
$
|
--
|
$
|
500,000
|
$
|
3,300,000
|
$
|
--
|
||||||
Long-Term
Debt Fixed Interest
|
71,458
|
35,000
|
36,458
|
--
|
--
|
|||||||||||
Operating
Leases
|
49,712,735
|
5,556,932
|
10,537,546
|
9,128,657
|
24,489,600
|
|||||||||||
Total
Contractual Cash Obligations
|
$
|
53,584,193
|
$
|
5,591,932
|
$
|
11,074,004
|
$
|
12,428,657
|
$
|
24,489,600
|
(a) |
The
following documents are filed as part of this
Report:
|
1. |
Financial
Statements:
|
3.
|
The
following exhibits are filed, furnished or incorporated by reference
as
exhibits to this Report as required by Item 601 of Regulation S-K.
The
exhibits designated with a cross are management contracts and compensatory
plans and arrangements required to be filed as exhibits to this report.
|
3.1
|
Articles
of Incorporation of the Company, as amended (incorporated by reference
to
the corresponding Exhibit number of the Company’s Form 8-K filed on May
25, 1999 with the Securities and Exchange Commission).
|
‡3.2
|
Bylaws
of the Company.
|
‡4.1
|
Specimen
of Certificate of Common Stock of the Company.
|
4.2
|
Articles
of Incorporation of the Company (see 3.1 above).
|
‡4.3
|
Bylaws
of the Company (see 3.2 above).
|
‡10.1
|
Employment
Agreement by and between the Company and Louis P. Neeb dated
February 28, 1996.
|
10.2
|
Indemnity
Agreement by and between the Company and Louis P. Neeb dated as of
April 10, 1996 (incorporated by reference to Exhibit 10.4 of the
Company’s Form S-1 Registration Statement filed under the Securities Act
of 1933, dated April 24, 1996, with the Securities and Exchange Commission
(Registration Number 333-1678) (the “1996 Form
S-1”)).
|
10.3
|
Indemnity
Agreement by and between the Company and Larry N. Forehand dated as
of April 10, 1996 (incorporated by reference to Exhibit 10.5 of the
1996 Form S-1).
|
10.4
|
Indemnity
Agreement by and between the Company and John C. Textor dated as
of
April 10, 1996 (incorporated by reference to Exhibit 10.6 of the 1996
From S-1).
|
10.5
|
Indemnity
Agreement by and between the Company and Michael D. Domec dated as of
April 10, 1996 (incorporated by reference to Exhibit 10.8 of the 1996
Form S-1).
|
10.6
|
Indemnity
Agreement by and between the Company and J. J. Fitzsimmons dated
as of
April 10, 1996 (incorporated by reference to Exhibit 10.10 of the
1996 Form S-1).
|
10.7
|
Indemnity
Agreement by and between the Company and Richard E. Rivera dated as
of April 10, 1996 (incorporated by reference to Exhibit 10.11 of the
1996 Form S-1).
|
10.8
|
Form
of the Company's Multi-Unit Development Agreement (incorporated by
reference to Exhibit 10.14 of the 1996 Form S-1).
|
10.9
|
Form
of the Company's Franchise Agreement (incorporated by reference to
Exhibit
10.15 of the 1996 Form S-1).
|
†10.10
|
1996
Long Term Incentive Plan (incorporated by reference to Exhibit 10.16
of
the 1996 Form S-1).
|
†10.11
|
Mexican
Restaurants, Inc. 2005 Long Term Incentive Plan (incorporated by
reference
to Exhibit 99.1 of the 2005 Form S-8 filed December 1,
2005).
|
†10.12
|
Stock
Option Plan for Non-Employee Directors (incorporated by reference
to
Exhibit 10.17 of the 1996 Form S-1).
|
10.13
|
Indemnification
letter agreement by Larry N. Forehand dated April 10, 1996
(incorporated by reference to Exhibit 10.35 of the 1996 Form S-1).
|
†10.14
|
1996
Manager’s Stock Option Plan (incorporated by reference to Exhibit 99.2 of
the Company’s Form S-8 Registration Statement filed under the Securities
Act of 1933, dated February 24, 1997 filed with the Securities and
Exchange Commission).
|
†10.15
|
Employment
Agreement by and between the Company and Andrew J. Dennard dated
May 20,
1997 (incorporated by reference to Exhibit 10.45 of the Company’s Form
10-K Annual Report filed on March 30, 1998 with the Securities and
Exchange Commission).
|
10.23
|
Fleet
Revolving Credit and Term Loan Agreement between Mexican Restaurants,
Inc., as the Borrower, and Fleet National Bank, as the Bank, for
$10,000,000 dated June 29, 2001 and as amended on January 7, 2004
and
April 1, 2005 (incorporated by reference to Exhibit 10.22 of the
Company’s
Form 10-K Annual Report filed in April, 2005 with the Securities
and
Exchange Commission).
|
10.24
|
Amendment
No. 2 to Amended and Restated Revolving Credit and Term Loan Agreement
dated November 15, 2005 (effective June 30, 2005) between Mexican
Restaurants, Inc., as the Borrower, and Bank of America, successor
to
Fleet National Bank, as the Bank, for $10,000,000 dated June 29,
2001 and
as amended on January 7, 2004 and April 1, 2005 (incorporated by
reference
to Exhibit 10.24 to the Company’s Form 10-K Annual Report filed on March
30, 2006 with the Securities and Exchange Commission).
|
†10.25
|
Performance
Unit Agreement by and between Mexican Restaurants, Inc. and Andrew
Dennard
dated August 16, 2005 (incorporated by reference to Exhibit 10.25
to the
Company’s Form 10-K Annual Report filed on March 30, 2006 with the
Securities and Exchange Commission).
|
†10.26
|
Separation
Agreement by and between Mexican Restaurants, Inc. and Curt Glowacki
dated
December 1, 2006 (incorporated by reference to Exhibit 10.1 to the
Company’s Form 8-K filed on December 7, 2006 with the Securities and
Exchange Commission).
|
†10.27
|
Performance
Unit Agreement by and between Mexican Restaurants, Inc. and Louis
P. Neeb
dated August 16, 2005 (incorporated by reference to Exhibit 10.27
to the
Company’s Form 10-K Annual Report filed on March 30, 2006 with the
Securities and Exchange Commission).
|
†10.28
|
Performance
Unit Agreement by and between Mexican Restaurants, Inc. and Dennis
Vegas
dated August 16, 2005 (incorporated by reference to Exhibit 10.28
to the
Company’s Form 10-K Annual Report filed on March 30, 2006 with the
Securities and Exchange Commission)..
|
Amendment
No. 3 to Amended and Restated Revolving Credit and Term Loan Agreement
dated March 29, 2007 between Mexican Restaurants, Inc. as the Borrower,
and Bank of America, successor to Fleet National Bank, as the Bank,
for
$10,000,000 dated June 29, 2001 and as amended on January 7, 2004
and
April 1, 2005 and March 29, 2007.
|
|
21.1
|
List
of subsidiaries of the Company (incorporated by reference to Exhibit
22.1
of the Company’s Form S-1 Registration Statement Under the Securities Act
of 1933, dated April 24, 1996, filed by the Company with the Securities
and Exchange Commission).
|
Consent
of UHY LLP, Independent Registered Public Accounting
Firm.
|
|
Consent
of KPMG LLP, Independent Registered Public Accounting
Firm.
|
|
*24.1
|
Power
of Attorney (included on the signature page to this Form
10-K).
|
Certification
filed pursuant to Rule 13a-14(a) or Rule 15d-14(a).
|
|
Certification
filed pursuant to Rule 13a-14(a) or Rule 15d-14(a).
|
|
Certification
of Chief Executive Officer furnished pursuant to 18 U.S.C. Section
1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
Certification
of Chief Financial Officer furnished pursuant to 18 U.S.C. Section
1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
_____
|
|
*
|
Filed
herewith.
|
‡
|
Incorporated
by reference to corresponding Exhibit number of the Company’s Form S-1
Registration Statement under the Securities Act of 1933, dated April
24,
1996, with the Securities and Exchange Commission (Registration number
333-1678) (the “1996 Form S-1”).
|
†
|
Management
contract or compensatory plan or arrangement.
|
#
|
Furnished
herewith.
|
MEXICAN
RESTAURANTS, INC.
|
By:
/s/
Louis P. Neeb
|
Louis
P. Neeb,
|
Chairman
of the
Board of Directors
|
Signatures
|
Title
|
Date
|
/s/
Louis P. Neeb
|
Chairman
of the Board of Directors
|
March
30, 2007
|
Louis
P. Neeb
|
Chief
Executive Officer
|
|
(Principal
Executive Officer)
|
||
/s/
Larry N. Forehand
|
Founder
and Vice Chairman of the Board of Directors
|
March
30, 2007
|
Larry
N. Forehand
|
||
/s/
Andrew J. Dennard
|
Exec.
Vice President and Chief Financial Officer
|
March
30, 2007
|
Andrew
J. Dennard
|
(Principal
Financial and Accounting Officer)
|
|
/s/
Cara Denver
|
Director
|
March
30, 2007
|
Cara
Denver
|
||
/s/
Michael D. Domec
|
Director
|
March
30, 2007
|
Michael
D. Domec
|
||
/s/
J. J. Fitzsimmons
|
Director
|
March
30, 2007
|
J.
J. Fitzsimmons
|
||
/s/
Curt Glowacki
|
Director
|
March
30, 2007
|
Curt
Glowacki
|
||
/s/
Thomas E. Martin
|
Director
|
March
30, 2007
|
Thomas
E. Martin
|
||
/s/
J. Stuart Sargent
|
Director
|
March
30, 2007
|
J.
Stuart Sargent
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Report
of Independent Registered Public Accounting Firm
|
F-3
|
Consolidated
Balance Sheets as of January 1, 2006 and December 31, 2006
|
F-4
|
Consolidated
Statements of Operations for each of the years in the three fiscal-year
period
ended December 31, 2006
|
F-5
|
Consolidated
Statements of Stockholders' Equity for each of the years in the
three fiscal-year period ended December 31, 2006
|
F-6
|
Consolidated
Statements of Cash Flows for each of the years in the three fiscal-year
period ended December 31, 2006
|
F-7
|
Notes
to Consolidated Financial Statements
|
F-8
|
Fiscal
Years
|
|||||||
ASSETS
|
2005
|
2006
|
|||||
Current
assets:
|
|||||||
Cash
|
$
|
788,109
|
$
|
653,310
|
|||
Royalties
receivable
|
176,649
|
90,627
|
|||||
Other
receivables
|
2,088,035
|
856,704
|
|||||
Inventory
|
744,397
|
710,633
|
|||||
Taxes
receivable
|
--
|
408,787
|
|||||
Prepaid
expenses and other current assets
|
833,678
|
851,580
|
|||||
Total
current assets
|
4,630,868
|
3,571,641
|
|||||
Property,
plant and equipment
|
31,511,205
|
34,682,615
|
|||||
Less
accumulated depreciation
|
(15,315,864
|
)
|
(17,171,172
|
)
|
|||
Net
property, plant and equipment
|
16,195,341
|
17,511,443
|
|||||
Goodwill
|
10,902,664
|
11,403,805
|
|||||
Deferred
tax assets
|
256,274
|
318,519
|
|||||
Property
held for sale, net
|
625,318
|
--
|
|||||
Other
assets
|
526,804
|
470,284
|
|||||
$
|
33,137,269
|
$
|
33,275,692
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Current
installments of long-term debt
|
$
|
1,000,000
|
$
|
--
|
|||
Accounts
payable
|
1,710,068
|
2,087,506
|
|||||
Income
taxes payable
|
203,116
|
--
|
|||||
Accrued
sales and liquor taxes
|
127,283
|
142,787
|
|||||
Accrued
payroll and taxes
|
1,685,235
|
1,440,040
|
|||||
Accrued
expenses
|
1,536,895
|
1,828,916
|
|||||
Total
current liabilities
|
6,262,597
|
5,499,249
|
|||||
Long-term
debt
|
4,500,000
|
3,800,000
|
|||||
Other
liabilities
|
1,930,056
|
2,050,272
|
|||||
Deferred
gain
|
1,561,070
|
1,352,927
|
|||||
Total
liabilities
|
14,253,723
|
12,702,448
|
|||||
Stockholders'
equity:
|
|||||||
Preferred
stock, $0.01 par value, 1,000,000 shares authorized, none
issued
|
--
|
--
|
|||||
Common
stock, $0.01 par value, 20,000,000 shares authorized, 4,732,705 shares
issued
|
47,327
|
47,327
|
|||||
Additional
paid-in capital
|
19,406,139
|
19,041,867
|
|||||
Retained
earnings
|
11,620,788
|
12,759,122
|
|||||
Treasury
stock, cost of 1,375,728 common shares in 2005 and 1,272,383 common
shares
in 2006
|
(12,190,708
|
)
|
(11,275,072
|
)
|
|||
Total
stockholders' equity
|
18,883,546
|
20,573,244
|
|||||
$
|
33,137,269
|
$
|
33,275,692
|
Fiscal
Years
|
||||||||||
2004
|
2005
|
2006
|
||||||||
Revenues:
Restaurant
sales
|
$
|
74,034,769
|
$
|
76,901,353
|
$
|
81,379,597
|
||||
Franchise
fees, royalties and other
|
753,293
|
694,302
|
825,115
|
|||||||
Business
interruption
|
--
|
534,163
|
59,621
|
|||||||
74,788,062
|
78,129,818
|
82,264,333
|
||||||||
Costs
and expenses:
|
||||||||||
Cost
of sales
|
20,473,539
|
20,914,871
|
22,429,076
|
|||||||
Labor
|
24,087,436
|
25,048,534
|
26,358,576
|
|||||||
Restaurant
operating expenses
|
16,670,639
|
17,692,164
|
19,263,309
|
|||||||
General
and administrative
|
6,586,807
|
6,941,683
|
7,716,786
|
|||||||
Depreciation
and amortization
|
2,135,964
|
2,683,651
|
3,131,399
|
|||||||
Pre-opening
costs
|
34,756
|
77,942
|
108,847
|
|||||||
Impairment
costs
|
322,074
|
--
|
543,777
|
|||||||
Gain
on disposal of assets - Hurricane Rita
|
--
|
(471,622
|
)
|
(366,808
|
)
|
|||||
Loss
on sale of assets
|
179,948
|
367,711
|
32,282
|
|||||||
70,491,163
|
73,254,934
|
79,217,244
|
||||||||
|
|
|
||||||||
Operating
income
|
4,296,899
|
4,874,884
|
3,047,089
|
|||||||
Other
income (expense):
|
||||||||||
Interest
income
|
9,711
|
3,451
|
6,239
|
|||||||
Interest
expense
|
(553,371
|
)
|
(521,161
|
)
|
(390,539
|
)
|
||||
Other,
net
|
84,881
|
113,846
|
80,986
|
|||||||
(458,779
|
)
|
(403,864
|
)
|
(303,314
|
)
|
|||||
Income
from continuing operations before income taxes
|
3,838,120
|
4,471,020
|
2,743,775
|
|||||||
Income
tax expense
|
1,269,174
|
1,474,606
|
849,102
|
|||||||
Income
from continuing operations
|
2,568,946
|
2,996,414
|
1,894,673
|
|||||||
Discontinued
operations:
|
||||||||||
Loss
from discontinued operations
|
(547,176
|
)
|
(303,448
|
)
|
(364,352
|
)
|
||||
Restaurant
closure costs
|
(546,506
|
)
|
(790,708
|
)
|
(832,179
|
)
|
||||
Loss
on sale of assets
|
(212,561
|
)
|
(2,420
|
)
|
(10,449
|
)
|
||||
Loss
from discontinued operations before income taxes
|
(1,306,243
|
)
|
(1,096,576
|
)
|
(1,206,980
|
)
|
||||
Income
tax benefit
|
498,271
|
417,159
|
450,641
|
|||||||
Loss
from discontinued operations
|
(807,972
|
)
|
(679,417
|
)
|
(756,339
|
)
|
||||
Net
Income
|
$
|
1,760,974
|
$
|
2,316,997
|
$
|
1,138,334
|
||||
Basic
income (loss) per share:
|
||||||||||
Income
from continuing operations
|
$
|
0.76
|
$
|
0.88
|
$
|
0.55
|
||||
Loss
from discontinued operations
|
(0.24
|
)
|
(0.20
|
)
|
(0.22
|
)
|
||||
Net
income
|
$
|
0.52
|
$
|
0.68
|
$
|
0.33
|
||||
Diluted
income (loss) per share:
|
||||||||||
Income
from continuing operations
|
$
|
0.70
|
$
|
0.81
|
$
|
0.53
|
||||
Loss
from discontinued operations
|
(0.22
|
)
|
(0.18
|
)
|
(0.21
|
)
|
||||
Net
income
|
$
|
0.48
|
$
|
0.63
|
$
|
0.32
|
||||
Weighted
average number of shares (basic)
|
3,388,489
|
3,415,806
|
3,402,207
|
|||||||
Weighted
average number of shares (diluted)
|
3,634,849
|
3,700,876
|
3,521,587
|
Common
Stock
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Deferred
Compensation
|
Treasury
Stock
|
Total
Stockholders’
Equity
|
||||||||||||||
Balances
at December 28, 2003
|
$
|
47,327
|
$
|
20,121,076
|
$
|
7,542,817
|
$
|
(47,607
|
)
|
$
|
(11,709,513
|
)
|
$
|
15,954,100
|
|||||
Exercise
of Stock Options
|
--
|
--
|
--
|
--
|
111,591
|
111,591
|
|||||||||||||
Amortization
of Deferred Compensation
|
--
|
--
|
--
|
41,304
|
--
|
41,304
|
|||||||||||||
Net
income
|
--
|
--
|
1,760,974
|
--
|
--
|
1,760,974
|
|||||||||||||
Balances
at January 2, 2005
|
47,327
|
20,121,076
|
9,303,791
|
(6,303
|
)
|
(11,597,922
|
)
|
17,867,969
|
|||||||||||
Exercise
of Stock Options Through Issuance
of Treasury Shares
|
--
|
(714,937
|
)
|
--
|
--
|
1,145,481
|
430,544
|
||||||||||||
Repurchase
of shares
|
--
|
--
|
--
|
--
|
(1,738,267
|
)
|
(1,738,267
|
)
|
|||||||||||
Amortization
of Deferred Compensation
|
--
|
--
|
--
|
6,303
|
--
|
6,303
|
|||||||||||||
Net
income
|
--
|
--
|
2,316,997
|
--
|
--
|
2,316,997
|
|||||||||||||
Balances
at January 1, 2006
|
47,327
|
19,406,139
|
11,620,788
|
--
|
(12,190,708
|
)
|
18,883,546
|
||||||||||||
Exercise
of Stock Options Through Issuance
of Treasury Shares
|
--
|
(472,703
|
)
|
--
|
--
|
1,177,366
|
704,663
|
||||||||||||
Repurchase
of shares
|
--
|
--
|
--
|
--
|
(261,730
|
)
|
(261,730
|
)
|
|||||||||||
Stock
based Compensation Expense
|
--
|
63,508
|
--
|
--
|
--
|
63,508
|
|||||||||||||
Excess
Tax Benefit-Options Exercised
|
--
|
44,923
|
--
|
--
|
--
|
44,923
|
|||||||||||||
Net
income
|
--
|
--
|
1,138,334
|
--
|
--
|
1,138,334
|
|||||||||||||
Balances
at December 31, 2006
|
$
|
47,327
|
$
|
19,041,867
|
$
|
12,759,122
|
$
|
--
|
$
|
(11,275,072
|
)
|
$
|
20,573,244
|
Fiscal
Years
|
||||||||||
2004
|
2005
|
2006
|
||||||||
(Revised.
See Note 1)
|
||||||||||
Cash
flows from operating activities:
|
||||||||||
Net
income
|
$
|
1,760,974
|
$
|
2,316,997
|
$
|
1,138,334
|
||||
Adjustment
to reconcile net income to net cash provided by operating activities
|
||||||||||
Depreciation
and amortization
|
2,135,964
|
2,683,651
|
3,131,399
|
|||||||
Deferred
gain amortization
|
(208,185
|
)
|
(208,142
|
)
|
(208,143
|
)
|
||||
Loss
from discontinued operations
|
807,972
|
679,417
|
756,339
|
|||||||
Impairment
costs
|
322,074
|
--
|
543,777
|
|||||||
Hurricane
Rita gain
|
--
|
(471,622
|
)
|
(366,808
|
)
|
|||||
Loss
on sale of property, plant and equipment
|
179,948
|
367,711
|
32,282
|
|||||||
Stock
based compensation expense
|
41,304
|
6,303
|
63,508
|
|||||||
Business
interruption proceeds
|
--
|
(534,163
|
)
|
(59,621
|
)
|
|||||
Deferred
income taxes (benefit)
|
677,164
|
697,550
|
(27,109
|
)
|
||||||
Changes
in assets and liabilities, net of effects of acquisitions
|
||||||||||
Royalties
receivable
|
94,140
|
(91,272
|
)
|
86,022
|
||||||
Other
receivables
|
(284,845
|
)
|
(44,729
|
)
|
437,930
|
|||||
Taxes
receivable/payable
|
(228,834
|
)
|
776,956
|
(611,903
|
)
|
|||||
Inventory
|
6,507
|
(275,666
|
)
|
9,711
|
||||||
Prepaids
and other current assets
|
(143,337
|
)
|
4,179
|
(32,750
|
)
|
|||||
Other
assets
|
33,173
|
4,074
|
(25,551
|
)
|
||||||
Accounts
payable
|
25,576
|
17,353
|
289,378
|
|||||||
Accrued
expenses and other liabilities
|
160,653
|
310,334
|
(347,674
|
)
|
||||||
Deferred
rent and other long-term liabilities
|
308,859
|
138,772
|
103,384
|
|||||||
Total
adjustments
|
3,928,133
|
4,060,706
|
3,774,171
|
|||||||
Net
cash provided by continuing operations
|
5,689,107
|
6,377,703
|
4,912,505
|
|||||||
Net
cash provided by (used in) discontinued operations
|
13,883
|
(135,464
|
)
|
132,358
|
||||||
Net
cash provided by operating activities
|
5,702,990
|
6,242,239
|
5,044,863
|
|||||||
Cash
flows from investing activities:
|
||||||||||
Insurance
proceeds received from Hurricane Rita loss
|
--
|
300,000
|
1,211,850
|
|||||||
Purchase
of property, plant and equipment
|
(2,698,460
|
)
|
(4,512,175
|
)
|
(5,138,048
|
)
|
||||
Proceeds
from sale of property, plant and equipment
|
655,752
|
372,691
|
765,000
|
|||||||
Business
Acquisitions, net of cash acquired
|
(6,767,916
|
)
|
--
|
(742,490
|
)
|
|||||
Net
cash used in continuing operations
|
(
8,810,624
|
)
|
(
3,839,484
|
)
|
(3,903,688
|
)
|
||||
Net
cash used in discontinued operations
|
(301,163
|
)
|
(100,759
|
)
|
(63,830
|
)
|
||||
Net
cash used in investing activities
|
(9,111,787
|
)
|
(3,940,243
|
)
|
(3,967,518
|
)
|
||||
Cash
flows from financing activities:
|
||||||||||
Net
borrowings (payment) under line of credit agreement
|
1,225,000
|
(1,500,000
|
)
|
800,000
|
||||||
Purchase
of treasury stock
|
--
|
(1,738,267
|
)
|
(261,730
|
)
|
|||||
Excess
tax benefit - stock-based compensation expense
|
--
|
--
|
44,923
|
|||||||
Exercise
of stock options
|
111,591
|
430,544
|
704,663
|
|||||||
Additions
to (payments on) Long-term debt
|
3,000,000
|
--
|
(2,500,000
|
)
|
||||||
Net
cash provided by (used in) financing activities
|
4,336,591
|