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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q

(Mark One)

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

For the quarterly period ended September 26, 2004

OR

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 No. 0-23226

 
GRILL CONCEPTS, INC.
  
(Exact name of registrant as specified in its charter)

 
Delaware
  
13-3319172
  
 
(State or other jurisdiction
  
(IRS Employer
  
 
of incorporation or organization)
  
Identification No.)
  

 
11661 San Vicente Blvd., Suite 404, Los Angeles, California 90049
  
(Address of principal executive offices)(Zip code)

 
(310) 820-5559
  
(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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o   No x

As of November 1, 2004, 5,650,146 shares of Common Stock of the issuer were outstanding.

  
     
 
 
GRILL CONCEPTS, INC.

INDEX

   
Page
   
Number
     
PART I - FINANCIAL INFORMATION
  
     
Item 1.
Financial Statements
  
     
   
 
2
 
    
   
   
 
4
     
   
   
 
5
     
 
6
     
Item 2.
  
 
25
     
Item 3.
47
     
Item 4.
47
     
PART II - OTHER INFORMATION
  
     
Item 1.
48
     
Item 6.
48
 
    
50

  
  1  
 
 
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
 
GRILL CONCEPTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(Unaudited)
ASSETS
 
   
September 26,
  
December 28,
  
   
2004
  
2003
  
       
(restated)
  
Current assets:
              
Cash and cash equivalents
  
$
1,096,000
  
$
1,496,000
  
Inventories
    
570,000
    
585,000
 
Receivables, net of reserve ($21,000 in
              
2004 and $13,000 in 2003)
    
560,000
    
658,000
 
Reimbursable cost receivable
    
529,000
    
580,000
  
Prepaid expenses
    
644,000
   
612,000
 
               
Total current assets
    
3,399,000
   
3,931,000
  
               
Furniture, equipment, & improvements, net
    
11,488,000
    
11,061,000
 
               
Goodwill, net
    
205,000
    
205,000
 
Restricted cash
    
132,000
    
72,000
  
Note receivable
    
100,000
    
111,000
  
Liquor licenses
    
355,000
    
350,000
 
Other assets
    
213,000
   
275,000
 
               
Total assets
  
$
15,892,000
  
$
16,005,000
  

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

  
  2  
 
 
GRILL CONCEPTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Continued)

LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY

   
September 26,
  
December 28,
  
   
2004
  
2003
  
       
(restated)
  
Current liabilities:
              
Accounts payable
  
$
1,643,000
  
$
1,046,000
  
Accrued expenses
    
1,919,000
    
2,400,000
 
Reimbursable costs payable
    
529,000
    
580,000
  
Current portion of long term debt
    
230,000
    
298,000
 
Current portion notes payable - related parties
    
290,000
   
345,000
 
Total current liabilities
    
4,611,000
    
4,669,000
 
               
Long-term debt
    
155,000
    
285,000
 
Notes payable - related parties
    
865,000
   
969,000
  
Other long-term liabilities
    
3,665,000
    
2,734,000
  
               
Total liabilities
    
9,296,000
    
8,657,000
 
               
Minority interest
    
1,511,000
    
2,058,000
 
               
Stockholders' equity:
              
Series I, Convertible Preferred Stock, $.001 par
              
value; 1,000,000 shares authorized, none
             
issued and outstanding in 2004 and 2003
    
-
    
-
 
Series II, 10% Convertible Preferred Stock, $.001 par
              
value; 1,000,000 shares, authorized, 500 shares
              
issued and outstanding in 2004 and 2003
    
-
    
-
 
Common stock, $.00004 par value; 12,000,000 shares
              
authorized in 2004 and 2003, 5,650,146 shares
             
issued and outstanding in 2004, 5,537,071 shares
              
issued and outstanding in 2003
    
-
   
-
  
Additional paid-in capital
    
13,649,000
   
13,601,000
 
Accumulated deficit
    
(8,564,000
)
  
(8,311,000
)
Total stockholders' equity
    
5,085,000
   
5,290,000
 
Total liabilities, minority interest and
              
stockholders' equity
  
$
15,892,000
  
$
16,005,000
  

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

  
  3  
 

GRILL CONCEPTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

   
Three Months Ended
  
Nine Months Ended
  
   
September 26,
  
September 28,
  
September 26,
  
September 28,
  
   
2004
  
2003
  
2004
  
2003
  
Revenues:
      
(restated)
      
(restated)
  
Sales
  
$
12,169,000
  
$
11,192,000
  
$
38,325,000
  
$
35,376,000
  
Cost reimbursements
    
2,615,000
    
2,330,000
    
8,708,000
    
6,614,000
  
Management and license fees
    
308,000
    
243,000
    
910,000
    
709,000
  
Total revenues
    
15,092,000
    
13,765,000
    
47,943,000
   
42,699,000
  
Cost of sales (exclusive of depreciation,
                          
presented separately)
    
3,367,000
   
3,135,000
    
10,746,000
    
9,772,000
 
Gross profit
    
11,725,000
    
10,630,000
    
37,197,000
   
32,927,000
  
                           
Operating expenses:
                          
Restaurant operating expenses
    
7,752,000
    
7,325,000
    
23,931,000
    
22,076,000