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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 June 30, 2002 or
 
¨
 
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 33-14051
 
Prandium, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
33-0197361
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
2701 Alton Parkway, Irvine, California 92606
(Address of principal executive offices) (Zip Code)
 
Registrant’s telephone number, including area code: (949) 863-8500
 
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 and (2) has been subject to such filing requirements for the past 90 days.
 
Yes  x    No  ¨
 
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
 
Yes  x    No  ¨
 
As of August 9, 2002 the registrant had issued and outstanding 5,000,000 shares of common stock, $.01 par value per share.
 
 

1


 
PART I.    FINANCIAL INFORMATION
 
Item 1.    Financial Statements
 
PRANDIUM, INC.
 
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
 
    
June 30,
2002

    
December 30,
2001

 
    
(Unaudited)
        
ASSETS
                 
Current assets:
                 
Cash and cash equivalents
  
$
26,058
 
  
$
27,982
 
Restricted cash
  
 
10,661
 
  
 
12,992
 
Receivables, net
  
 
1,822
 
  
 
1,894
 
Inventories
  
 
1,679
 
  
 
1,887
 
Other current assets
  
 
5,019
 
  
 
5,139
 
Property held for sale
  
 
14,786
 
  
 
15,844
 
    


  


Total current assets
  
 
60,025
 
  
 
65,738
 
Property and equipment, net
  
 
91,472
 
  
 
96,926
 
Other assets, net
  
 
10,430
 
  
 
11,218
 
    


  


    
$
161,927
 
  
$
173,882
 
    


  


LIABILITIES AND STOCKHOLDERS’ DEFICIT
                 
Liabilities not subject to compromise
                 
Current liabilities:
                 
Current portion of long-term debt, including capitalized lease obligations
  
$
620
 
  
$
234,271
 
Accounts payable
  
 
6,492
 
  
 
6,178
 
Current portion of self-insurance reserves
  
 
1,862
 
  
 
2,012
 
Other accrued liabilities
  
 
35,614
 
  
 
81,117
 
Income taxes payable
  
 
3,373
 
  
 
3,379
 
    


  


Total current liabilities
  
 
47,961
 
  
 
326,957
 
Self-insurance reserves
  
 
5,840
 
  
 
5,964
 
Other long-term liabilities
  
 
2,511
 
  
 
2,648
 
Long-term debt, including capitalized lease obligations, less current portion
  
 
902
 
  
 
967
 
Liabilities subject to compromise under reorganization proceedings
  
 
282,996
 
  
 
—  
 
    


  


Total liabilities
  
 
340,210
 
  
 
336,536
 
    


  


Commitments and contingencies
                 
Stockholders’ deficit:
                 
Common stock—authorized 300,000,000 shares, par value $.01 per share, 180,380,513 shares issued and outstanding on June 30, 2002 and on December 30, 2001
  
 
1,804
 
  
 
1,804
 
Additional paid-in capital
  
 
222,353
 
  
 
222,353
 
Accumulated deficit
  
 
(402,440
)
  
 
(386,811
)
    


  


Total stockholders’ deficit
  
 
(178,283
)
  
 
(162,654
)
    


  


    
$
161,927
 
  
$
173,882
 
    


  


 
See accompanying notes to condensed consolidated financial statements

2


PRANDIUM, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share amounts)
(Unaudited)
 
    
For the Quarters Ended

 
    
June 30,
2002

    
July 1,
2001

 
Sales
  
$
67,494
 
  
$
74,528
 
    


  


Product costs
  
 
16,584
 
  
 
19,846
 
Payroll and related costs
  
 
23,660
 
  
 
26,509
 
Occupancy and other operating expenses
  
 
18,856
 
  
 
22,402
 
Depreciation and amortization
  
 
3,062
 
  
 
3,900
 
General and administrative expenses
  
 
4,094
 
  
 
5,842
 
Opening costs
  
 
—  
 
  
 
57
 
Loss on disposition of properties, net
  
 
513
 
  
 
369
 
Provision for divestitures and write-down of long-lived assets
  
 
550
 
  
 
—  
 
Restructuring costs
  
 
1,391
 
  
 
2,057
 
    


  


Total costs and expenses
  
 
68,710
 
  
 
80,982
 
    


  


Operating loss
  
 
(1,216
)
  
 
(6,454
)
Interest expense, net (contractual interest of $7,373 for 2002)
  
 
3,056
 
  
 
7,066
 
    


  


Loss before reorganization items and income tax provision
  
 
(4,272
)
  
 
(13,520
)
Reorganization items
  
 
492
 
  
 
—  
 
    


  


Loss before income tax provision
  
 
(4,764
)
  
 
(13,520
)
Income tax provision
  
 
93
 
  
 
107
 
    


  


Net loss
  
$
(4,857
)
  
$
(13,627
)
    


  


Net loss per share—basic and diluted
  
$
(0.03
)
  
$
(0.08
)
    


  


Weighted average shares outstanding—basic and diluted
  
 
180,380,513
 
  
 
180,380,513
 
    


  


 
 
See accompanying notes to condensed consolidated financial statements

3


PRANDIUM, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share amounts)
(Unaudited)
 
    
For the Six Months Ended

 
    
June 30,
2002

    
July 1,
2001

 
Sales
  
$
135,389
 
  
$
150,510
 
    


  


Product costs
  
 
33,850
 
  
 
40,307
 
Payroll and related costs
  
 
48,148
 
  
 
54,116
 
Occupancy and other operating expenses
  
 
37,778
 
  
 
44,790
 
Depreciation and amortization
  
 
6,085
 
  
 
8,077
 
General and administrative expenses
  
 
8,765
 
  
 
11,715
 
Opening costs
  
 
1
 
  
 
107
 
Loss on disposition of properties, net
  
 
654
 
  
 
771
 
Provision for divestitures and write-down of long-lived assets
  
 
2,757
 
  
 
189
 
Restructuring costs
  
 
1,772
 
  
 
2,553
 
    


  


Total costs and expenses
  
 
139,810
 
  
 
162,625
 
    


  


Operating loss
  
 
(4,421
)
  
 
(12,115
)
Interest expense, net (contractual interest of $14,846 for 2002)
  
 
10,529
 
  
 
13,712
 
    


  


Loss before reorganization items and income tax provision
  
 
(14,950
)
  
 
(25,827
)
Reorganization items
  
 
492
 
  
 
—  
 
    


  


Loss before income tax provision
  
 
(15,442
)
  
 
(25,827
)
Income tax provision
  
 
187
 
  
 
213
 
    


  


Net loss
  
$
(15,629
)
  
$
(26,040
)
    


  


Net loss per share - basic and diluted
  
$
(0.09
)
  
$
(0.14
)
    


  


Weighted average shares outstanding - basic and diluted
  
 
180,380,513
 
  
 
180,380,513
 
    


  


 
See accompanying notes to condensed consolidated financial statements

4


 
PRANDIUM, INC.
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
(Unaudited)
 
    
For the Six Months Ended

 
    
June 30,
2002

    
July 1,
2001

 
Cash flows from operating activities:
                 
Cash received from customers, franchisees and licensees
  
$
135,961
 
  
$
151,197
 
Cash paid to suppliers and employees
  
 
(134,614
)
  
 
(154,701
)
Interest received (paid), net
  
 
(153
)
  
 
406
 
Opening costs
  
 
(1
)
  
 
(107
)
Restructuring costs
  
 
(707
)
  
 
(1,223
)
Income taxes paid
  
 
(193
)
  
 
(396
)
    


  


Net cash provided by (used in) operating activities before reorganization items
  
 
293
 
  
 
(4,824
)
Reorganization items
  
 
(276
)
  
 
—  
 
    


  


Net cash provided by (used in) operating activities
  
 
17
 
  
 
(4,824
)
    


  


Cash flows from investing activities:
                 
Proceeds from disposal of property and equipment
  
 
70
 
  
 
139
 
Proceeds from payments on notes receivable
  
 
—  
 
  
 
348
 
Capital expenditures
  
 
(1,064
)
  
 
(2,994
)
Lease termination payments
  
 
(1,512
)
  
 
(611
)
Other divestment expenditures
  
 
(987
)
  
 
(1,023
)
Cash required for the El Torito Sale
  
 
(128
)
  
 
(1,085
)
Decrease (increase) in restricted cash, net
  
 
2,260
 
  
 
(9,568
)
Other
  
 
126
 
  
 
(1,125
)
    


  


Net cash used in investing activities
  
 
(1,235
)
  
 
(15,919
)
    


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