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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended June 30, 1997
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from _______________ to ____________________
Commission file Number 0-9037
Piccadilly Cafeterias, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 72-0604977
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3232 Sherwood Forest Blvd., Baton Rouge, Louisiana 70816
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (504) 293-9440
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of class)
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 disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant based on the closing price of such stock on August 26, 1997 was
$ 118,459,622.
The number of shares outstanding of Common Stock, without par value, as of
August 26, 1997 was 10,528,368.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the fiscal year ended June
30, 1997 are incorporated by reference into Part II.
Portions of the definitive proxy statement for the 1997 annual meeting of
shareholders are incorporated by reference into Part III.
PART I
Item 1. Business
General Development of Business
Piccadilly Cafeterias, Inc. was incorporated under the laws of Louisiana in
1965 and is the successor to various predecessor corporations and partnerships
which operated "Piccadilly" cafeterias beginning with the acquisition of the
first unit in 1944. Except where the context otherwise indicates, the terms
"Company", "Piccadilly", and "Registrant" as used herein refer to Piccadilly
Cafeterias, Inc.
At June 30, 1997, the Company operated 129 cafeterias in 15 states. Of
these, 56 are in suburban malls, 22 are in suburban strip centers, and 51 are
free-standing suburban locations. Up to six new cafeterias are expected to be
opened during the year ending June 30, 1998. The following table sets forth
certain information regarding development of the Company's cafeteria chain
during the five years ended June 30, 1997:
- -------------------------------------------------------------------------------
Year Ended June 30 1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------
Net sales per unit (in thousands)(A) $2,179 $2,058 $1,990 $1,916 $1,868
- -------------------------------------------------------------------------------
Units opened 3 1 5 3 1
- -------------------------------------------------------------------------------
Units closed 4 3 3 4 11
- -------------------------------------------------------------------------------
Units open at year-end 129 130 132 130 131
- -------------------------------------------------------------------------------
Total customer volume (in thousands) 49,483 49,629 48,274 48,098 50,564
- -------------------------------------------------------------------------------
(A) Excludes cafeterias opened or closed during period.
At June 30, 1997 the Company operated seven "Ralph and Kacoo's" seafood
restaurants in Louisiana, Alabama, and Mississippi. No additional Ralph &
Kacoo's seafood restaurants are expected to be opened in the year ending June
30, 1998. The following table sets forth certain information regarding the
Company's "Ralph and Kacoo's" seafood restaurant chain during the five years
ended June 30, 1997:
- --------------------------------------------------------------------
Year Ended June 30 1997 1996 1995 1994 1993
- --------------------------------------------------------------------
Net sales per unit (in $3,509 $3,428 $3,394 $3,344 $3,362
thousands) (A)
- --------------------------------------------------------------------
Units opened 0 0 1 0 0
- --------------------------------------------------------------------
Units closed 1 0 0 0 2
- --------------------------------------------------------------------
Units open at year-end 7 8 8 7 7
- --------------------------------------------------------------------
(A) Excludes restaurants opened or closed during period.
Although the Company's operations are primarily in the southern, southwestern,
and western regions of the United States, the Company does not consider its
growth to be limited to such areas. Piccadilly evaluates numerous potential
expansion locations, focusing on demographic data such as population
densities, population profiles, income levels, traffic counts, as well as
the extent of competition. The number of new cafeterias and restaurants that
the Company can open depends upon its ability to secure appropriate locations,
generate necessary financial resources, and develop personnel for expansion.
Cafeteria and Restaurant Operations
The Company's traditional cafeterias seat from 250 to 450 customers each. During
1997, the Company completed the design of a new cafeteria prototype. The
prototype has approximately 6,000 square feet compared to the Company's 10,000
square feet traditional cafeteria and seats from 165 to 200 customers. This
smaller cafeteria allows the Company to access a broader range of markets. Two
of the three cafeterias opened in fiscal year 1997 used the new prototype
design.
Each cafeteria unit offers a wide variety of food, at reasonable prices, and
with the convenience of cafeteria service, to a diverse luncheon and dinner
clientele. Cafeteria personnel cook and prepare from scratch substantially all
food served. All items are prepared from standardized recipes. Menus are varied
at the discretion of unit management in response to local and seasonal customer
preferences.
Through an agreement with Associated Grocers, Inc., a Baton Rouge-based
association of 235 food stores in Louisiana, Mississippi and Texas, the Company
has begun placing small cafeterias in grocery stores. The agreement with
Associated Grocers, Inc. allows the Company to rent a portion of the space
within the supermarket. These mini cafeterias, called Piccadilly Express,
feature a scaled-down version of the cafeteria serving counter and feature many
of the Company's most popular items that are prepared on-site. This initiative
focuses on the take-out segment of the Company's business by providing home meal
solutions through convenient customer alternatives while leveraging the high
traffic flow of grocery stores. Some seating capacity is provided within the
Piccadilly Express when space is available.
Like most industry participants, the Company purchases foodstuffs in small
quantities from local and regional suppliers in order to better assure
freshness. As a result, inventory is kept relatively low; average per-
cafeteria-inventory at June 30, 1997 was $15,500.
Ralph & Kacoo's restaurants seat from 250 to 600 customers each. These
restaurants are full-service menu facilities. All of the food served is cooked
and prepared by the restaurant staff from standardized recipes. Substantially
all of the food, supplies, and other materials required for the preparation of
meals are supplied by the Company-owned commissary.
The commissary, located in Baton Rouge, Louisiana, contains approximately 26,500
square feet of restaurant food and supplies storage. Seafood accounts for
approximately 50% of inventory at the commissary. In order to provide
consistent quality, selection, and price throughout the year, the commissary
purchases in-season seafood in quantities sufficient to supply the restaurants
during periods when such products would otherwise not be available at reasonable
prices in the marketplace. On the average, seafood inventory turns
approximately once every four months. Inventory maintained at the commissary at
June 30, 1997, was approximately $2,575,000 while the average "Ralph and
Kacoo's" restaurant inventory level at year-end was approximately $43,800. The
commissary is not dependent upon a single supplier nor a small group of
suppliers.
Each cafeteria, express unit, and restaurant is operated as a separate unit
under the control of a manager and associate manager who have responsibility for
virtually all aspects of the unit's business, including purchasing, food
preparation, and employee matters. Twelve district managers, under the
supervision of one general manager, and the chief executive officer oversee and
regularly inspect cafeteria operations. Two district managers, under the
supervision of a general manager and the chief executive officer, oversee
restaurant operations. The Company employed approximately 8,200 persons at June
30, 1997, of whom all but 69 corporate headquarters employees worked at
Piccadilly's 139 cafeteria and restaurant locations and its commissary.
The food service industry is highly competitive. Competitive factors include
food quality and variety, price, customer service, location, the number and
proximity of competitors, decor, and public reputation. The Company considers
its principal competitors to be other cafeterias, casual dining venues, and
fast-food operations. Like other food service operations, the Company is
attuned to changes in both consumer preferences for food and habits in
patronizing eating establishments.
Customer volume at established cafeterias and sales volume at established
restaurants are generally higher in the Company's second fiscal quarter and
lower in the third quarter. These patterns reflect the general seasonal
fluctuations of the retail industry.
Cost of sales is affected by statutory minimum wage rates. The Company's
operations are subject to federal, state, and local laws and regulations
relating to environmental protection, including regulation of discharges into
the air and water, and relating to safety and labor, including the Federal
Occupational Safety and Health Act and wage and hour laws. Additionally, the
Company's operations are regulated pursuant to state and local sanitation and
public health laws. Operating units utilize electricity and natural gas, which
are subject to various federal and state regulations concerning the allocation
of energy. The Company's operating costs have been and will continue to be
affected by increases in the cost of energy.
Item 2. Properties
All but 23 of the cafeterias, express unit, and restaurants operated by the
Company at June 30, 1997, were operated on premises held under long-term leases
with differing provisions and expiration dates. The 23 cafeterias and
restaurants not operated on premises held under long-term leases are owned.
Leases provide for monthly rentals, typically computed on the basis of a fixed
amount plus a percentage of sales. Most leases contain provisions permitting
the Company to renew for one or more specified terms. These leases are scheduled
to expire, exclusive of renewal provisions, as follows:
-------------------------------------------------------
Five-year
periods Units Units
ending June 30 Operating Closed
-------------------------------------------------------
2002 49 2
-------------------------------------------------------
2007 38 3
-------------------------------------------------------
2012 24 9
-------------------------------------------------------
2017 3 --
-------------------------------------------------------
Total 114 14
-------------------------------------------------------
Reference is made to Note 4 of the Notes to Consolidated Financial Statements
for certain additional information regarding the Company's leases.
All cafeterias, express unit, and restaurants have been constructed or remodeled
since 1992 and all equipment is maintained and modernized as necessary to
maintain appearance and utility. The list below provides a general geographic
review of the locations of the Company's cafeterias and restaurants at June 30,
1997:
-----------------------------------------------------------------------
State Piccadilly Piccadilly Ralph & Kacoo's
Cafeterias Express Units Restaurants
-----------------------------------------------------------------------
Alabama 6 1
-----------------------------------------------------------------------
Arizona 3
-----------------------------------------------------------------------
Florida 21
-----------------------------------------------------------------------
Georgia 18
-----------------------------------------------------------------------
Kansas 1
-----------------------------------------------------------------------
Kentucky 1
-----------------------------------------------------------------------
Louisiana 29 1 5
-----------------------------------------------------------------------
Mississippi 3 1
-----------------------------------------------------------------------
Missouri 3
-----------------------------------------------------------------------
North Carolina 4
-----------------------------------------------------------------------
Oklahoma 3
-----------------------------------------------------------------------
South Carolina 2
-----------------------------------------------------------------------
Tennessee 11
-----------------------------------------------------------------------
Texas 17
-----------------------------------------------------------------------
Virginia 7
-----------------------------------------------------------------------
The Company utilizes generally standardized building configurations for its new
cafeterias and restaurants in terms of seating, food display, preparation areas,
and other factors and attempts to build out floor space to maximize efficient
use of available space.
The Company continues to pursue strategies to increase the capacity and
utilization of its cafeterias. The Company is converting several of its "order
pick-up" counters to Piccadilly Express hot counters where the physical
facilities are condusive to doing so. The new counters allow customers to view
and select their choices rather than simply ordering to go items from a menu.
This delivery system increases the number of take-out orders that can be filled
at peak order times.
Piccadilly's corporate headquarters occupy approximately two-thirds of a
Company-owned 45,000 square foot office building completed in 1974 and located
on a Company-owned tract comprising approximately five acres in Baton Rouge,
Louisiana. The remainder of the building is leased to commercial tenants.
Item 3. Legal Proceedings
The Company is not a party to and does not have any property that is the subject
of any legal proceedings pending or, to the knowledge of management, threatened,
other than ordinary routine litigation incidental to its business and
proceedings which are material or as to which management believes the Company
does not have adequate insurance.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 4(a). Executive Officers of the Registrant
Executive officers are elected annually by the Board of Directors and hold
office until a successor is duly elected. The names and positions of executive
officers of the Registrant, together with a brief description of the business
experience of each such person during the past five years, is set forth below.
W. Scott Bozzell, Vice President and Controller, age 34, has held such positions
since July, 1996. From May 1992 to July 1996 he was Vice President and
Assistant Controller. Prior to that he was Assistant Controller.
Frederick E. Fuchs Jr., Executive Vice President and Director of Real Estate,
age 50, has held such positions since June 1986.
Jere W. Goldsmith Jr., Executive Vice President and Director of Training, age
51, has held such positions since July 1995. Mr. Goldsmith previously served in
this capacity from May 1987 to February 1992. From February 1992 to July 1995
he was Executive Vice President and Region Manager.
J. Fred Johnson, age 46, Executive Vice President, Treasurer, and Chief
Financial Officer, has held such positions since November 1995. From August
1985 through October 1995 he was with Graphic Industries, Inc., a printing
company, in various capacities, including Chief Financial Officer and Treasurer.
Ronald A. LaBorde, age 41, President and Chief Executive Officer, has held such
positions since June 1995. From January 1992 to May 1995 he was Executive Vice
President, Treasurer and Chief Financial Officer. Prior to that he was
Executive Vice President, Secretary, and Controller.
D. Thomas Landry, Executive Vice President and Director of Maintenance,
Construction and Design, age 45, has held such positions since May 1992. From
July 1990 to May 1992 he was Vice President and Director of Maintenance.
Robert P. Listen, Executive Vice President and Director of Technical Services,
age 49, has held such positions since December 1992. From July 1987 to November
1992 he was Executive Vice President and District Manager.
Mark L. Mestayer, Executive Vice President, Secretary, and Director of Finance,
age 39, has held such positions since July 1996. From May 1992 to July 1996, he
was Executive Vice President, Secretary and Controller. From January 1992 to
May 1992, he was Vice President and Controller. Prior to that, he was Vice
President and Controller, Ralph & Kacoo's.
Joseph S. Polito, Executive Vice President and General Manager, age 55, has held
such positions since July 1995. From October 1992 to July 1995, he was
Executive Vice President and Director of Training. From 1987 to October 1992 he
was Executive Vice President and District Manager.
Patrick R. Prudhomme, Executive Vice President and Region Manager, age 45, has
held such positions since February 1992. From January 1989 to February 1992 he
was Vice President and District Manager, Ralph & Kacoo's.
C. Warriner Siddle, Executive Vice President and Director of Development, age
46, has held such positions since July 1995. From February 1992 to July 1995 he
was Executive Vice President and Region Manager. From October 1984 to February
1992 he was Executive Vice President and District Manager.
Donovan B. Touchet, Executive Vice President and Director of Data Processing,
age 48, has held such positions since June 1988.
Brian G. Von Gruben, Executive Vice President and Director of Administrative
Services, age 49, has held such positions since May 1987.
PART II
Item 5. Market for the Registrant's Common Stock and Related Security Holder
Matters
Information regarding Common Stock market prices and dividends, on the inside
cover of the Annual Shareholders Report for the year ended June 30, 1997, is
incorporated herein by reference.
Item 6. Selected Financial Data
"Selected Financial and Other Data", on page 11 of the Annual Shareholders
Report for the year ended June 30, 1997, is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Management's Discussion and Analysis of Financial Condition and Results of
Operations, on pages 12 and 13 of the Annual Shareholders Report for the year
ended June 30, 1997, is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The following consolidated financial statements and supplementary data, included
on pages 14 through 22 of the Annual Shareholders Report for the year ended June
30, 1997, are incorporated herein by reference:
Consolidated balance sheets as of June 30, 1997 and 1996
Consolidated statements of income for the fiscal years ended June 30, 1997,
1996 and 1995
Consolidated statements of changes in shareholders' equity for the fiscal years
ended June 30, 1997, 1996 and 1995
Consolidated statements of cash flows for the fiscal years ended June 30, 1997,
1996 and 1995
Notes to consolidated financial statements
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
In accordance with General Instruction G (3) to Form 10-K, Items 10, 11, 12, and
13 have been omitted since the Company will file with the Commission a
definitive proxy statement complying with Regulation 14A relating to its 1997
annual meeting and involving the election of directors not later than 120 days
after the close of its fiscal year. The Company incorporates by reference the
information in response to such items set forth in its definitive proxy
statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (1) Financial Statements--The following are incorporated herein by
reference in this Annual Report on Form 10-K from the indicated pages
of the Registrant's Annual Shareholders Report for the year ended June
30, 1997:
- -------------------------------------------------------------------------------
Annual
Shareholders
Description Report Page
- -------------------------------------------------------------------------------
Consolidated balance sheets as of June 30, 1997 and 1996 14
- -------------------------------------------------------------------------------
Consolidated statements of income for the fiscal years
ended June 30, 1997, 1996 and 1995 15
- -------------------------------------------------------------------------------
Consolidated statements of changes in shareholders'
equity for the fiscal years ended June 30, 1997, 1996 and 1995 15
- -------------------------------------------------------------------------------
Consolidated statements of cash flows for the fiscal
years ended June 30, 1997, 1996 and 1995 16
- -------------------------------------------------------------------------------
Notes to consolidated financial statements 17-22
- -------------------------------------------------------------------------------
Report of independent auditors 22
- -------------------------------------------------------------------------------
(2) Schedules-The following consolidated schedules and information are
included in this annual report on Form 10-K on the pages indicated.
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable,
and therefore have been omitted.
- -------------------------------------------------------------------------------
Annual Report
on Form 10-K
Description Page
- -------------------------------------------------------------------------------
Schedule II-Valuation and qualifying accounts 10
- -------------------------------------------------------------------------------
(3) Listing of Exhibits - See sub-section (c) below.
(b) No reports on Form 8-K were filed during the last quarter of the year
covered by this report.
(c) EXHIBITS
3. (a) Articles ofIncorporation of the Company(1), as amended on September
14, 1987(2) as amended on September 27, 1988(3), and as amended on
September 28, 1989(4).
(b) By-laws of the Company, as amended through July 22, 1996(5).
- -------------------------------------------------------------------------------
**FOOTNOTES**
(1) Incorporated by reference from the Registrant's Registration Statement
on Form S-1 (Registration No. 2-63249) filed with the Commission on
December 19, 1978.
(2) Incorporated by reference from the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1987.
(3) Incorporated by reference from the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1988.
(4) Incorporated by reference from the Registrant's Annual Report on Form
10-K, as amended, for the fiscal year ended June 30, 1989.
(5) Incorporated by reference from the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996.
- -------------------------------------------------------------------------------
4. (a) Piccadilly Cafeterias, Inc. Stockholder Rights Agreement[(]6).
(b) Note Agreement, dated as of January 31, 1989, relating
to $30 million principal amount of 10.15% Senior Notes due
January 31, 1999(7).
10. (a) Piccadilly Cafeteria, Inc. Pension Plan, as amended, dated
May 3, 1993(8).
(b) Piccadilly Cafeterias, Inc. Employee Stock Purchase Plan(9).
as amended on September 27, 1991(10).
(c) Piccadilly Cafeterias, Inc. 1988 Stock Option Plan(11),
as amended on August 2, 1993(8).
(d) Form of Management Continuity Agreement, effective March 27,
1995, unless otherwise indicated, between Piccadilly Cafeterias,
Inc. and each of Messrs. LaBorde, Bozzell, Fuchs, Goldsmith,
Johnson (November 16, 1995), Landry, Listen, Mestayer, Polito,
Prudhomme, Siddle, Touchet, and Von Gruben(5).
(e) Form of Director Indemnity Agreement, effective April 27, 1995,
unless otherwise indicated, between Piccadilly Cafeterias, Inc.
and each of Messrs. LaBorde, Francis, Guyton (July 1, 1996),
Murrill, Redman (September 25, 1995), Simmons, Smith and
Ms. Hamilton(5).
(f) Agreement between Piccadilly Cafeterias, Inc. and Ronald A.
LaBorde, effective June 26, 1995(5).
(g) Form of Agreement, effective August 1, 1995, between Piccadilly
Cafeterias, Inc. and each of Malcolm T. Stein, Jr. and James E.
Durham, Jr. (5).
13. The Registrant's Annual Report to Shareholders for the fiscal year
ended June 30, 1997.
21. List of Subsidiaries of the Registrant.
23. Consent of Independent Auditors.
27. Financial Data Schedule.
- ------------------------------------------------------------------------------
**FOOTNOTES**
(6) Incorporated by reference from the Company's Current Report on Form 8-K
filed with the Commission on August 22, 1988.
(7) Incorporated by reference from the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended December 31, 1988.
(8) Incorporated by reference from the Company's Annual Report on Form 10-K,
as amended, for the fiscal year ended June 30, 1993.
(9) Incorporated by reference from the Registrant's Registration Statement
on Form S-8 (Registration No. 33-17737) filed with the Commission on
October 7, 1989.
(10) Incorporated by reference from the Registrant's Annual Report on Form
10-K, as amended, for the fiscal year ended June 30, 1991.
(11) Incorporated by reference from the Registrant's Registration Statement
on Form S-8 (Registration No. 33-27793) filed with the Commission on
March 29, 1989.
- ------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Piccadilly Cafeterias, Inc.
(Registrant)
By:/s/ Ronald A. LaBorde
Ronald A. LaBorde
President and Chief Executive Officer
Date: August 4, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Norman C. Francis 8/4/97 /s/ Dale E. Redman 8/4/97
- --------------------------- -------- ------------------------- --------
Norman C. Frances, Director Date Dale E. Redman, Director Date
/s/ Robert P. Guyton 8/4/97 /s/ Christel C. Slaughter. 8/4/97
- --------------------------- -------- -------------------------- --------
Robert P. Guyton, Director Date Christel C. Slaughter, Date
Director
/s/Julia H. R. Hamilton 8/4/97 /s/ Edward M. Simmons, Sr. 8/4/97
- --------------------------- -------- -------------------------- --------
Julia H. R. Hamilton, Date Edward M. Simmons, Sr., Date
Director Director
/s/ Ronald A. LaBorde 8/4/97 /s/ C. Ray Smith 8/4/97
- --------------------------- -------- -------------------------- --------
Ronald A. LaBorde, Date C. Ray Smith, Director Date
President, Chief Executive
Officer and Director
/s/ Paul W. Murrill 8/4/97
- --------------------------- ---------
Paul W. Murrill, Chairman of Date
the Board
/s/ J. Fred Johnson 8/4/97 /s/ Mark L. Mestayer 8/4/97
- --------------------------- -------- -------------------------- -------
J. Fred Johnson Date Mark L. Mestayer, Secretary Date
Executive Vice President, and Director of Finance
Treasurer and Chief (Principal Accounting
Financial Officer Officer)
(Principal Financial
Officer)
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
- --------------------------------------------------------------------------------------------------------
| COL. A | COL. B | COL. C | COL. D | COL. E |
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
| | | Additions | | |
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
| | | | (2) | | |
| |Balance at | (1) | Charged to | | |
| |Beginning |Charged to| Other |Deduction-- |Balance at |
| | | | | | |
| Description |of Period |costs and | Accounts- | Describe | End of |
| | |expenses | Describe | | Period |
- --------------------------------------------------------------------------------------------------------
Reserves for Unit Closings:
Year ended June 30, 1997:
Property, plant & equipment
allowance $ 4,407,472 $ 1,760,984(A) $ 2,646,488
Current liability 347,496 347,496(A) ---
Long-term liability 5,049,509 2,274,568(A) 2,774,941
----------- ----------- -----------
$ 9,804,477 $ 4,383,048 $ 5,421,429
============ =========== ==========
Year ended June 30, 1996:
Property, plant & equipment
allowance $ 800,796 $ 3,726,958 $ 120,282(A) $ 4,407,472
Current liability 254,339 100,000 6,843(A) 347,496
Long-term liability 5,009,297 1,000,819 960,607(A) 5,049,509
----------- ----------- ----------- -----------
$ 6,064,432 $ 4,827,777 $ 1,087,732 $ 9,804,477
=========== =========== =========== ===========
Year ended June 30, 1995:
Property, plant & equipment
allowance $ 1,356,659 $ 555,863(A) $ 800,796
Current liability 350,482 96,143(A) 254,339
Long-term liability 6,502,486 1,493,189(A) 5,009,297
----------- ----------- ----------
$ 8,209,627 $ 2,145,195 $ 6,064,432
=========== =========== ===========
(A) Deductions are for the write-off of certain property, plant and equipment relating to units closed and for the
payment of other obligations (primarily rent) for those units closed and for those units for which a provision for
unit closing was recorded during the year ended June 30, 1992 and June 30, 1996. During 1997, the Company reduced
its accrued liability for rental and other occupancy costs associated with these properties by $600,000 as a result
of a favorable change in management's estimate of future sublease income.