UNITED STATES
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 thirteen weeks ended June 27, 2004
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 0-21423
CHICAGO PIZZA & BREWERY, INC.
(Exact name of registrant as specified in its charter)
| California | 33-0485615 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
16162 Beach Boulevard
Suite 100
Huntington Beach, California 92647
(Address and zip code of principal executive offices)
(714) 848-3747
(Registrants telephone number, including area code)
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 ¨.
Indicate by check mark if the filer is an accelerated filer (as defined in Rule 12B-2 of the Act). YES x NO ¨.
As of July 19, 2004, there were 19,737,286 shares of Common Stock of the Registrant outstanding.
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(In thousands)
| June 27, 2004 (Unaudited) |
December 28, 2003 | |||||
| Assets |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 2,984 | $ | 4,899 | ||
| Investments |
21,125 | 22,041 | ||||
| Accounts and other receivables |
1,987 | 1,869 | ||||
| Inventories |
1,066 | 959 | ||||
| Prepaids and other current assets |
456 | 1,164 | ||||
| Deferred taxes |
933 | 1,175 | ||||
| Total current assets |
28,551 | 32,107 | ||||
| Property and equipment, net |
53,691 | 46,306 | ||||
| Goodwill |
4,673 | 4,762 | ||||
| Notes receivable |
950 | – | ||||
| Other assets, net |
464 | 530 | ||||
| Total assets |
$ | 88,329 | $ | 83,705 | ||
| Liabilities and Shareholders’ Equity |
||||||
| Current liabilities: |
||||||
| Accounts payable |
$ | 2,974 | $ | 2,798 | ||
| Accrued expenses |
8,401 | 8,533 | ||||
| Current portion of reserve for store closures |
— | 55 | ||||
| Current portion of notes payable to related parties |
— | 151 | ||||
| Total current liabilities |
11,375 | 11,537 | ||||
| Deferred income taxes |
423 | 143 | ||||
| Reserve for store closures |
72 | 74 | ||||
| Other liabilities |
898 | 900 | ||||
| Total liabilities |
12,768 | 12,654 | ||||
| Commitments and contingencies |
||||||
| Shareholders’ equity: |
||||||
| Preferred stock, 5,000 shares authorized, none issued or outstanding |
— | — | ||||
| Common stock, no par value, 60,000 shares authorized and 19,737 and 19,649 shares issued and outstanding as of June 27, 2004 and December 28, 2003, respectively |
62,914 | 62,513 | ||||
| Capital surplus |
2,439 | 2,109 | ||||
| Retained earnings |
10,208 | 6,429 | ||||
| Total shareholders’ equity |
75,561 | 71,051 | ||||
| Total liabilities and shareholders’ equity |
$ | 88,329 | $ | 83,705 | ||
See accompanying notes to unaudited consolidated financial statements.
1
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
| For The Thirteen Weeks Ended |
For The Twenty-Six Weeks Ended | ||||||||||||
| June 27, 2004 |
June 29, 2003 |
June 27, 2004 |
June 29, 2003 | ||||||||||
| Revenues |
$ | 29,315 | $ | 25,412 | $ | 58,292 | $ | 49,207 | |||||
| Costs and expenses: |
|||||||||||||
| Cost of sales (see related party note) |
7,624 | 6,732 | 15,033 | 13,022 | |||||||||
| Labor and benefits |
10,185 | 8,982 | 20,761 | 17,626 | |||||||||
| Occupancy |
2,226 | 1,856 | 4,456 | 3,615 | |||||||||
| Operating expenses |
3,179 | 2,895 | 6,272 | 5,555 | |||||||||
| General and administrative |
2,213 | 2,248 | 4,733 | 4,352 | |||||||||
| Depreciation and amortization |
1,183 | 964 | 2,341 | 1,877 | |||||||||
| Restaurant opening expense |
770 | 291 | 1,009 | 703 | |||||||||
| Gain from sale of Pietro’s restaurants |
— | — | (1,658 | ) | — | ||||||||
| Total costs and expenses |
27,380 | 23,968 | 52,947 | 46,750 | |||||||||
| Income from operations |
1,935 | 1,444 | 5,345 | 2,457 | |||||||||
| Other income: |
|||||||||||||
| Interest income, net |
121 | 96 | 224 | 193 | |||||||||
| Other income, net |
29 | 120 | 114 | 282 | |||||||||
| Total other income |
150 | 216 | 338 | 475 | |||||||||
| Income before income taxes |
2,085 | 1,660 | 5,683 | 2,932 | |||||||||
| Income tax expense |
682 | 582 | 1,904 | 1,026 | |||||||||
| Net income |
$ | 1,403 | $ | 1,078 | $ | 3,779 | $ | 1,906 | |||||
| Net income per share: |
|||||||||||||
| Basic |
$ | 0.07 | $ | 0.06 | $ | 0.19 | $ | 0.10 | |||||
| Diluted |
$ | 0.07 | $ | 0.05 | $ | 0.18 | $ | 0.09 | |||||
| Weighted average number of shares outstanding: |
|||||||||||||
| Basic |
19,452 | 19,379 | 19,452 | 19,387 | |||||||||
| Diluted |
20,535 | 20,337 | 20,545 | 20,259 | |||||||||
See accompanying notes to unaudited consolidated financial statements.
2
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
| Common Stock |
Capital Surplus |
Retained Earnings |
Total | |||||||||||
| Shares |
Amount |
|||||||||||||
| Balance, December 28, 2003 |
19,649 | $ | 62,513 | $ | 2,109 | $ | 6,429 | $ | 71,051 | |||||
| Exercise of stock options, net |
88 | 401 | — | — | 401 | |||||||||
| Tax benefit from stock option exercises |
— | — | 330 | — | 330 | |||||||||
| Net income |
— | — | — | 3,779 | 3,779 | |||||||||
| Balance, June 27, 2004 |
19,737 | $ | 62,914 | $ | 2,439 | $ | 10,208 | $ | 75,561 | |||||
See accompanying notes to unaudited consolidated financial statements.
3
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| For The Twenty-Six Weeks Ended |
||||||||
| June 27, 2004 |
June 29, 2003 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 3,779 | $ | 1,906 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
2,341 | 1,877 | ||||||
| Deferred income taxes |
522 | 139 | ||||||
| Tax benefit from stock options exercised |
330 | 53 | ||||||
| Gain on sale of Pietro’s restaurants |
(1,658 | ) | — | |||||
| Changes in assets and liabilities: |
||||||||
| Accounts and other receivables |
(125 | ) | (170 | ) | ||||
| Inventories |
(107 | ) | (64 | ) | ||||
| Prepaids and other current assets |
708 | 977 | ||||||
| Other assets, net |
15 | 2 | ||||||
| Accounts payable |
176 | (2,316 | ) | |||||
| Accrued expenses |
(247 | ) | 1,122 | |||||
| Reserve for store closures |
(57 | ) | — | |||||
| Other liabilities |
45 | 174 | ||||||
| Net cash provided by operating activities |
5,722 | 3,700 | ||||||
| Cash flows from investing activities: |
||||||||
| Purchases of property and equipment |
(10,053 | ) | (6,860 | ) | ||||
| Purchases of investments |
(7,121 | ) | (23,964 | ) | ||||
| Proceeds from investments sold |
8,037 | 2,715 | ||||||
| Proceeds from sale of Pietro’s restaurants |
1,250 | — | ||||||
| Proceeds from sale of restaurant equipment, net of expenses |
— | 36 | ||||||
| Net cash used in investing activities |
(7,887 | ) | (28,073 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Proceeds from exercise of stock options |
401 | 71 | ||||||
| Payments on notes payable to related parties |
(151 | ) | (179 | ) | ||||
| Net cash provided by (used in) financing activities |
250 | (108 | ) | |||||
| Net decrease in cash and cash equivalents |
(1,915 | ) | (24,481 | ) | ||||
| Cash and cash equivalents, beginning of period |
4,899 | 29,053 | ||||||
| Cash and cash equivalents, end of period |
$ | 2,984 | $ | 4,572 | ||||