WORLDWIDE RESTAURANT CONCEPTS INC - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10 - Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 2, 2003

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number 1-10711

WORLDWIDE RESTAURANT CONCEPTS, INC.

(Exact Name of Registrant as specified in its Charter)

Delaware		95-4307254

(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

15301 Ventura Blvd., Suite 300, Building B, Sherman Oaks, California 91403

(Address of Principal Executive Offices, including zip code)

(818) 662-9800

(Registrant’s telephone number, including area code)



(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 o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at March 3, 2003

Common Stock $0.01 Par Value		27,232,469 shares

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)

			February 2, 2003		April 30, 2002

ASSETS
Current Assets:
	Cash and cash equivalents		$	19,942	$	25,943
	Restricted cash			2,969		2,096
	Receivables, net of an allowance of $793 at February 2, 2003 and $814 at April 30, 2002			2,433		2,101
	Inventories			4,445		4,367
	Deferred income tax asset			2,653		2,191
	Prepaid expenses and other current assets			2,450		1,686

		Total current assets		34,892		38,384

Property and equipment, net				65,789		61,334
Property held for sale, net				2,357		2,632
Long-term notes receivable (including $200 of related party receivables at February 2, 2003 and April 30, 2002)				846		974
Deferred income tax asset				7,234		7,198
Goodwill, net				23,636		20,940
Intangible assets, net of accumulated amortization of $741 at February 2, 2003 and $602 at April 30, 2002				2,149		2,031
Other assets				1,162		1,866

		Total assets	$	138,065	$	135,359

The accompanying notes are an integral part of these condensed consolidated financial statements.

WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share data)

				February 2, 2003			April 30, 2002

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
	Current portion of long-term debt			$	6,415		$	5,971
	Accounts payable				8,791			11,304
	Other current liabilities				20,754			16,383
	Income taxes payable				1,892			2,669

			Total current liabilities		37,852			36,327

	Long-term debt, net of current portion				18,757			23,369
	Deferred gains and revenues				9,416			8,737
	Pension liability				11,346			11,725

			Total liabilities		77,371			80,158

Stockholders’ Equity:
	Capital stock -
		Preferred, authorized 1,000,000 shares, $5 par value; no shares issued			—			—
		Common, authorized 50,000,000 shares, $0.01 par value; issued and outstanding 29,232,469 and 27,232,469 shares and 29,205,491 and 27,205,491 shares at February 2, 2003 and April 30, 2002, respectively			292			292
		Additional paid-in capital			279,986			279,904
		Accumulated deficit			(207,049	)		(212,566	)
		Treasury stock, 2,000,000 shares at February 2, 2003 and at April 30, 2002, at cost			(4,135	)		(4,135	)
		Accumulated other comprehensive loss			(8,400	)		(8,294	)

			Total stockholders’ equity		60,694			55,201

			Total liabilities and stockholders’ equity	$	138,065		$	135,359

The accompanying notes are an integral part of these condensed consolidated financial statements.

WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE FORTY WEEKS ENDED FEB. 2, 2003 AND FEB. 3, 2002
(Unaudited)
(In thousands, except per share data)

		February 2, 2003		February 3, 2002

Revenues
	Restaurant sales	$	215,703	$	197,205
	Franchise revenues		6,331		6,403

	Total revenues		222,034		203,608

Costs and Expenses
	Cost of sales		73,152		67,271
	Labor and related expenses		60,244		56,292
	Other operating expenses (asset write downs of $355 in 2003 and $0 in 2002)		53,219		48,945
	Depreciation and amortization		7,509		7,268
	General and administrative expenses		18,240		18,275

	Total operating costs		212,364		198,051

	Operating income		9,670		5,557

	Interest expense		2,584		2,799
	Investment income		612		639
	Other income		—		412

Income before provision for income taxes			7,698		3,809

Provision for income taxes			2,181		1,417

Net income		$	5,517	$	2,392

Basic and diluted earnings per share		$	0.20	$	0.09

The accompanying notes are an integral part of these condensed consolidated financial statements.

WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIXTEEN WEEKS ENDED FEB. 2, 2003 AND FEB. 3, 2002
(Unaudited)
(In thousands, except per share data)

		February 2, 2003		February 3, 2002

Revenues
	Restaurant sales	$	87,526	$	79,907
	Franchise revenues		2,382		2,486

	Total revenues		89,908		82,393

Costs and Expenses
	Cost of sales		29,804		27,429
	Labor and related expenses		24,487		22,706
	Other operating expenses (asset write downs of $255 in 2003 and $0 in 2002)		21,954		19,966
	Depreciation and amortization		3,180		2,910
	General and administrative expenses		7,406		7,498

	Total operating costs		86,831		80,509

	Operating income		3,077		1,884

	Interest expense		963		1,128
	Investment income		143		227

Income before provision for income taxes			2,257		983

Provision for income taxes			1,421		610

Net income		$	836	$	373

Basic and diluted earnings per share		$	0.03	$	0.01

The accompanying notes are an integral part of these condensed consolidated financial statements.

WORLDWIDE RESTAURANT CONCEPTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FORTY WEEKS ENDED FEB. 2, 2003 AND FEB. 3, 2002
(Unaudited)
(in thousands)

		Feb. 2, 2003			Feb. 3, 2002

OPERATING ACTIVITIES
Net income		$	5,517		$	2,392
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		7,509			7,268
	Deferred income tax (provision) benefit		(40	)		999
	Provision for bad debts		85			40
	Gain on sale of assets		(282	)		(412

Common Stock $0.01 Par Value