UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10 -Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended April 2, 2005
or
--
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE OF 1934
For the transition period from ________to_________
Commission File Number I-6836
Flanigan's Enterprises, Inc.
(Exact name of registrant as specified in its charter)
Florida 59-0877638
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5059 N.E. 18th Avenue, Fort Lauderdale, Florida 33334
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code, (954) 377 - 1961
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 the subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuers classes of
Common Stock as of the latest practicable date 1,886,575 as of May 17, 2005.
1
FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
---------------------------------------------
INDEX TO FORM 10-Q
------------------
APRIL 2, 2005
-------------
PART I. FINANCIAL INFORMATION
---------------------
Item 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Income -- For the Thirteen and Twenty Six Weeks ended
April 2, 2005 and March 27, 2004 (Unaudited)
Consolidated Balance Sheets -- As of April 2, 2005 (Unaudited) and October 2,
2004.
Consolidated Statements of Cash Flows -For the Twenty Six weeks ended April 2,
2005 and March 27, 2004.
Notes to Consolidated Financial Statements (Unaudited)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Item 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 4. CONTROLS AND PROCEDURES
PART II. OTHER INFORMATION AND SIGNATURES
--------------------------------
Item 1. Legal Proceedings
Item 2. Change in Securities
Item 3. Default upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8K
Signatures
Exhibit - 31.1
Exhibit - 31.2
Exhibit - 32.1
Exhibit - 32.2
2
FLANIGAN'S ENTERPRISES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
Thirteen Weeks Twenty Six Weeks
Ended Ended
April 2 Mar. 27 April 2 Mar. 27
2005 2004 2005 2004
-------- -------- -------- --------
REVENUES:
Restaurant food sales $ 7,351 $ 7,262 $ 13,949 $ 13,235
Restaurant bar sales 1,708 1,747 3,287 3,186
Package good sales 3,073 2,957 6,409 5,758
Franchise related revenues 200 295 450 614
Owner's fee 37 38 75 92
Other operating income 80 2 104 43
-------- -------- -------- --------
12,449 12,301 24,274 22,928
-------- -------- -------- --------
COSTS AND EXPENSES:
Cost of merchandise sold:
Restaurant and lounges 3,171 3,158 6,096 5,750
Package goods 2,205 2,121 4,604 4,135
Payroll and related costs 3,336 3,443 6,459 6,274
Occupancy costs 669 716 1,365 1,303
Selling, general and
administrative expenses 2,470 2,481 4,813 4,732
-------- -------- -------- --------
11,851 11,919 23,337 22,194
-------- -------- -------- --------
Income from operations 598 382 937 734
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense (29) (33) (58) (61)
Minority interest in earnings of
consolidated joint ventures (197) (53) (210) (99)
Interest income 30 25 41 31
Other 34 7 46 22
-------- -------- -------- --------
(162) (54) (181) (107)
-------- -------- -------- --------
Income before Provision for Income Taxes 436 328 756 627
Provision for Income Taxes 109 76 189 144
-------- -------- -------- --------
Net Income $ 327 $ 252 $ 567 $ 483
======== ======== ======== ========
3
FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
(Continued)
Thirteen Weeks Twenty Six Weeks
Ended Ended
April 2 Mar. 27 April 2 Mar 27
2005 2004 2005 2004
---------- ---------- ---------- ----------
Net Income Per Common Share:
Basic $ 0.17 $ 0.13 $ 0.30 $ 0.25
========== ========== ========== ==========
Diluted $ 0.17 $ 0.13 $ 0.29 $ 0.25
========== ========== ========== ==========
Weighted Average Shares and Equivalent
Shares Outstanding
Basic 1,904,720 1,927,181 1,910,102 1,927,181
========== ========== ========== ==========
Diluted 1,932,531 1,960,042 1,931,575 1,960,715
========== ========== ========== ==========
See accompanying notes to unaudited condensed consolidated financial statements.
4
FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
APRIL 2, 2005 (UNAUDITED) AND OCTOBER 2, 2004
(In Thousands)
ASSETS
APRIL 2 OCTOBER 2
2005 2004
--------- ---------
Current Assets:
Cash and cash equivalents $ 3,555 $ 2,936
Marketable securities 303 328
Notes and mortgages receivables,
current maturities, net 19 25
Due from franchisees 163 --
Other receivables 253 271
Inventories 2,072 1,650
Prepaid expenses 997 565
Deferred tax asset 114 114
--------- ---------
Total Current Assets 7,475 5,889
--------- ---------
Property and Equipment 12,270 12,091
--------- ---------
Investments in Joint Ventures 100 124
--------- ---------
Other Assets:
Liquor licenses, net 347 347
Notes and mortgages receivable, net 122 128
Deferred tax asset 368 368
Other 1,059 827
--------- ---------
Total Other Assets 1,896 1,670
--------- ---------
Total Assets $ 21,741 $ 19,774
========= =========
5
FLANIGAN'S ENTERPRISES, INC, AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
APRIL 2, 2005 (UNAUDITED) AND OCTOBER 2, 2004
LIABILITIES AND STOCKHOLDER'S EQUITY
(In Thousands)
APRIL 2 OCTOBER 2,
2005 2004
--------- ----------
Current Liabilities:
Accounts payable and accrued expenses $ 4,218 $ 2,824
Due to franchisees 486 767
Current portion of long term debt 109 97
Deferred revenues 59 70
--------- ---------
Total Current Liabilities 4,872 3,758
--------- ---------
Long Term Debt, Net of Current Maturities 1,290 1,217
--------- ---------
Minority Interest in Equity of
Consolidated Joint Ventures 5,737 4,698
--------- ---------
Stockholder's Equity:
Common stock, $.10 par value; 5,000,000 shares
authorized; 4,197,642 shares issued 420 420
Capital in excess of par value 6,147 6,147
Retained earnings 8,962 8,974
Accumulated other comprehensive income -- 25
Treasury stock, at cost, 2,307,917 shares
at April 2, 2005 and 2,280,817
shares at October 2, 2004 (5,687) (5,465)
--------- ---------
Total Stockholders' Equity 9,842 10,101
--------- ---------
Total Liabilities and Stockholders' Equity $ 21,741 $ 19,774
========= =========
See accompanying notes to unaudited condensed consolidated financial statements.
6
FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY SIX WEEKS ENDED APRIL 2, 2005 AND MARCH 27, 2004
(In Thousands)
APRIL 2 MARCH 27
2005 2004
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 597 $ 483
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 702 718
Minority interest in earnings of
consolidated joint ventures 210 99
Recognition of deferred revenue (11) --
Changes in operating assets
and liabilities:
(Increase) decrease in:
Due from franchises (163) 180
Other receivables 18 (15)
Inventories (422) (269)
Prepaid expenses (431) (52)
Refundable deposit, major supplier -- 77
Other assets (232) (338)
Increase (decrease) in:
Accounts payable and accrued expenses 1,394 1,006
Due to franchises (281) 287
--------- ---------
Net cash provided by operating activities 1,381 2,176
--------- ---------
Cash flows from Investing Activities:
Collection on notes and mortgages receivable 12 11
Purchase of property and equipment (881) (1,038)
Proceeds from certificate of deposit redemption -- 354
Investment in marketable securities -- (172)
Distributions from unconsolidated joint ventures 24 --
--------- ---------
Net cash used in investing activities (845) (845)
7
FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWENTY SIX WEEKS ENDED APRIL 2, 2005 AND MARCH 27, 2004
(In Thousands)
APRIL 2 MARCH 27
2005 2004
-------- --------
Cash flows from Financing Activities:
Payment of long term debt (228) (157)
Proceeds from long term debt 313 --
Dividends paid (609) (581)
Purchase of treasury stock (223) (68)
Distributions to joint ventures
minority partners (536) (580)
Proceeds from joint venture interests 1,365 1,325
Proceeds from exercise of stock options 1 31
-------- --------
Net cash provided by (used in) financing activities 83 (30)
-------- --------
Net Increase In Cash and Cash Equivalents 619 1,301
Cash and Cash Equivalents,
Beginning of Period 2,936 1,587
-------- --------
Cash and Cash Equivalents
End of Period $ 3,555 $ 2,888
======== ========
Supplemental Disclosure for Cash Flow Information:
Cash paid during period for:
Interest $ 56 $ 61
======== ========
Income taxes $ 81 $ 161
======== ========
See accompanying notes to unaudited condensed consolidated financial statements
8
FLANIGAN'S ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 2, 2005
(1) BASIS OF PRESENTATION:
The financial information for the periods ended April 2, 2005, and March 27,
2004 are unaudited. Financial information as of October 2, 2004 has been derived
from the audited financial statements of the Company, but does not include all
disclosures required by generally accepted accounting principles. In the opinion
of management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of the financial information for the periods
indicated have been included. For further information regarding the Company's
accounting policies, refer to the Consolidated Financial Statements and related
notes included in the Company's Annual Report on Form 10- K for the year ended
October 2, 2004. Operating results for interim periods are not necessarily
indicative of results to be expected for a full year.
(2) EARNINGS PER SHARE:
Statements of Financial Accounting Standards ("SFAS") No. 128, Earnings per
share establishes standards for computing and presenting earnings per share
("EPS"). This statement requires the presentation of basic and diluted EPS. The
data on Page 4 shows the amounts used in computing earnings per share and the
effects on income and the weighted average number of shares of potentially
dilutive common stock equivalents.
(3) RECLASSIFICATION:
Certain amounts in the fiscal 2004 financial statements have been reclassified
to conform to the fiscal 2005 presentation.
(4) RECENT ACCOUNTING PRONOUNCEMENTS:
In December 2004, the Financial Accounting Standards Boards ("FASB") issued its
final standard on accounting for share-based payments ("SBP"), FASB Statement
No. 123R (revised 2004), Share-Based Payment. The Statement requires companies
to expense the value of employee stock options and similar awards. Under FAS
123R, SBP awards result in a cost that will be measured at fair value on the
awards' grant date, based on the estimated number of awards that are expected to
vest. Compensation cost for awards that vest would not be reversed if the awards
expire without being exercised. The effective date for public companies is
interim and annual periods beginning after January 1, 2006, and applies to all
outstanding and unvested SBP awards at a company's adoption. Management does not
anticipate that this Statement will have a significant impact on the Company's
consolidated financial statements.
(5) INVESTMENT IN JOINT VENTURES:
Pinecrest, Florida
9
During the third quarter of fiscal year 2003, the Company, as general partner of
the limited partnership, entered into a Sale of Business Agreement for the
purchase of an existing restaurant in Pinecrest, Florida, which transaction
closed during the first quarter of fiscal year 2004. The purchase price of
approximately $340,000 related to the acquisition of a below market lease and
will therefore be recognized as additional lease expense over the remaining life
of the lease once operation of the restaurant commences. As of April 2, 2005 the
$340,000 is included in the accompanying balance sheet in other assets. The
Company agreed to unconditionally guaranty the lease for the business premises
in order to procure the consent of the landlord to the assignment of the lease.
During the second quarter of fiscal year 2004 and after removing the interior
finishes in anticipation of completing its building plans for the renovation of
business premises, the Company found numerous, substantial structural
deficiencies which must be rectified prior to any renovations being made.
During the third quarter of fiscal year 2004, the Company, as general partner of
the limited partnership, and the landlord agreed upon the structural repairs
required, as set forth by the landlord's engineering firm, and to equally share
the cost thereof in order to minimize further delay to the renovation of the
business premises. During fourth quarter of fiscal year 2004, the structural
repairs were made by the landlord's contractor. Upon submitting its building
plans to Pinecrest, Florida for review and the issuance of building plans, the
Company was advised that there were structural problems that had not been
addressed and other structural problems that were not adequately repaired and
that its building plans would not be reviewed until the structural problems were
rectified. The Company, as general partner of the limited partnership, is
proceeding with the necessary structural repairs, while preserving its right to
pursue a claim against the landlord for its contribution to any additional
structural repairs and reimbursement of rent paid while the processing of its
building plans is delayed. The structural repairs should be completed during the
fourth quarter of fiscal year 2005, after which the limited partnership's
building plans will be processed by Pinecrest, Florida, building permits issued
and the renovations made to the business premises. The limited partnership still
intends to raise funds through a private offering to renovate the restaurant
once the renovation costs have been determined. At the end of the second quarter
of fiscal year 2005, the Company had advanced $ 999,000 to the limited
partnership, the use of which included, but was not limited to, funds to close
on the purchase of the existing business, architectural and engineering fees and
its contribution to structural repairs made to date. The Company continues to
act as a general partner and will also be the owner of up to thirty three and
one-third percent limited partnership interest. It is anticipated that the
renovated restaurant will be open for business by the end of calendar year 2005.
Wellington, Florida
During the fourth quarter of fiscal 2004, a limited partnership was formed with
the Company as general partner, which limited partnership entered into a lease
agreement to own and operate a restaurant in Wellington, Florida. During the
first quarter of fiscal year 2005, the limited partnership completed its private
offering, raising the sum of $1,850,000 to renovate the business premises for
operation as a "Flanigan's Seafood Bar and Grill" restaurant. The Company
continues to act as general partner and is also the owner of a twenty six
percent limited
10
partnership interest, as are other related parties, including but not limited to
officers and directors of the Company and their families. Possession of the
business premises was turned over to the limited partnership at the start of the
first quarter of fiscal quarter year 2005, renovations are underway and it is
anticipated that the renovated restaurant will open for business during the
third quarter of fiscal year 2005.
(6) INVESTMENTS:
Investments in equity securities that have readily determinable values are
classified and accounted for as available-for-sale. Available-for-sale
securities are carried at fair value with unrealized gains and losses recorded
as a separate component of accumulated other comprehensive income. Realized
gains and losses are calculated based on the specific identification method and
recorded in "other income" on the income statement. At April 2, 2005, cost
approximated fair market value.
(7) INCOME TAXES:
Financial Accounting Standards Board Statement No. 109, Accounting for Income
Taxes, requires among other things, recognition of future tax benefits measured
at enacted rates attributable to deductible temporary differences between
financial statement and income tax basis of assets and liabilities and to tax
net operating loss carryforwards and tax credits to the extent that realization
of said tax benefits is more likely than not. The deferred tax asset was
$482,000 as of April 2, 2005 and as of October 2, 2004.
(8) COMMITMENTS AND CONTINGENCIES:
Guarantees
The Company guarantees various leases for franchisees, limited partnerships and
locations sold in prior years. Remaining rental commitments required under these
leases are approximately $2,418,000. The remaining rental commitment as of the
end of the fiscal quarter ending April 2, 2005 only decreased by $21,000 as
compared to the remaining rental commitments as of the end of fiscal quarter
ending January 1, 2005 due to the exercise of a five year renewal option for one
of such leases during the fiscal quarter ending April 2, 2005. In the event of a
default under any of these agreements, the Company will have the right to
repossess the premises and operate the business to recover amounts paid under
the guarantee either by liquidating assets or operating the business.
Litigation
The Company is a party to various litigation matters incidental to its business.
Certain claims, suits and complaints arising in the ordinary course of business
have been filed or are pending against the Company.
Certain states have "liquor liability" laws which allow a person injured by an
"intoxicated person" to bring a civil suit against the business (or social host)
who served intoxicating liquors
11
to an already "obviously intoxicated person", know as "dram shop" claims.
Florida has restricted its dram shop claims by statute, permitting persons
injured by an "obviously intoxicated person" to bring court action only against
the business which had served alcoholic beverages to a minor or to an individual
known to be habitually addicted to alcohol. The Company is generally
self-insured for liability claims, with major losses partially covered by
third-party insurance carriers. The extent of this coverage varies by year. The
Company currently has no dram shop cases pending. For further discussion see the
section headed Legal Proceedings on page 16 of the Company's Annual Report on
Form 10-K for the fiscal year ended October 2, 2004. The Company accrues for
potential uninsured losses based upon estimates received from legal counsel and
its historical experience, when uninsured claims are pending. Such accrual is
included in the "Accounts payable and accrued expenses". See Note 6 in the
Company's Annual Report on Form 10-K for the fiscal year ended October 2, 2004.
(9) BUSINESS SEGMENTS
The Company operates principally in two segments - retail package stores and
restaurants. The operation of package stores consists of retail liquor sales.
Information concerning the revenues and operating income for the thirteen and
twenty six weeks ended April 2, 2005 and March 27, 2004, and identifiable assets
for the two segments in which the Company operates, are shown in the following
table. Operating income is total revenue less cost of merchandise sold and
operating expenses are shown in the following tables. Operating income is total
revenue less cost of merchandise sold and operating expenses relative to each
segment. In computing operating income, none of the following items have been
included: interest expense, other non-operating income and expense and income
taxes. Identifiable assets by segment are those assets that are used in the
Company's operations in each segment. Corporate assets are principally cash and
notes and mortgages receivable. The Company does not have any operations outside
of the United States and intersegment transactions are not material.
Thirteen Weeks Ended
April 2 March 27
2005 2004
-------- --------
Operating Revenues:
Restaurants $ 9,059 $ 9,009
Retail package stores 3,073 2,957
Other revenues 317 335
-------- --------
Total operating revenues $ 12,449 $ 12,301
12
Thirteen Weeks Ended
April 2 March 27
2005 2004
-------- --------
Operating Income Reconciled to Income
before Income Taxes:
Restaurants $ 697 $ 759
Retail package stores 255 84
-------- --------
952 843
Corporate expenses, net of other
revenues (354) (461)
-------- --------
Operating Income 598 382
Other (162) (54)
-------- --------
Income Before Income Taxes $ 436 $ 328
Depreciation and Amortization:
Restaurants $ 231 $ 301
Retail package stores 32 13
-------- --------
263 314
Corporate 61 44
-------- --------
Total Depreciation and Amortization $ 324 $ 358
Capital Expenditures:
Restaurants $ 512 $ 217
Retail package store 80 9
-------- --------
592 226
Corporate (34)* 77
-------- --------
Total Capital Expenditures $ 558 $ 303
* Includes ($72,000) transfer of furniture and fixtures from Corporate warehouse
to retail package stores.
Twenty Six Weeks Ended
April 2 March 27
2005 2004
-------- --------
Operating Revenues
Restaurants $ 17,236 $ 16,421
Retail package stores 6,409 5,758
Other revenues 629 749
-------- --------
Total operating revenues $ 24,274 $ 22,928
Operating Income Reconciled to Income
before Income Taxes:
Restaurants $ 1,355 $ 1,393
Retail package stores 450 194
-------- --------
1,805 1,587
Corporate expenses, net of other
Revenues (868) (853)
-------- --------
13
Twenty Six Weeks Ended
April 2 March 27
2005 2004
-------- --------
Operating income 937 734
Other (181) (107)
-------- --------
Income Before Income Taxes $ 756 $ 627
Depreciation and Amortization:
Restaurants $ 548 $ 581
Retail package stores 63 40
-------- --------
611 621
Corporate 91 97
-------- --------
Total Depreciation and Amortization $ 702 $ 718
Capital Expenditures:
Restaurants $ 763 $ 938
Retail package store 89 51
-------- --------
852 989
Corporate 29* 49
-------- --------
Total Capital Expenditures $ 881 $ 1,038
* Includes ($72,000) transfer of furniture and fixtures from Corporate warehouse
to retail package stores.
April 2 October 2
2005 2004
-------- ---------
Identifiable Assets:
Restaurants $ 10,797 $ 10,033
Retail package store 2,594 2,505
-------- --------
13,391 12,538
Corporate 8,350 7,236
-------- --------
Consolidated Totals $ 21,741 $ 19,774
======== ========
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
Reported financial results may not be indicative of the financial results of
future periods. All non-historical information contained in the following
discussion constitutes forward-looking statements within the meaning of Section
27A of the Securities Ace of 1933 and Section 21E of the Securities Exchange Act
of 1934. Words such as "anticipates, appears, expects, trends, intends, hopes,
plans, believes, seek, estimates, may, will," and variations of these words or
similar expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance and involve a number of
risks and uncertainties, including but not limited to customer demand and
competitive conditions. Factors that could cause actual
14
results to differ materially are included in, but not limited to, those
identified in the "Management's Discussion and Analysis of Financial Condition
and Results of Operations," in the Annual Report on Form 10-K for the Company's
fiscal year ended October 2, 2004 and in this Quarterly Report on Form 10-Q. The
Company undertakes no obligation to publicly release the results of any
revisions to these forward-looking statements that may reflect events or
circumstances after the date of this report.
The Company owns and/or operates full service restaurants, package liquor stores
and an entertainment oriented club (collectively the "units"). At April 2, 2005,
the Company operated 18 units and had equity interests in seven units which have
been franchised by the Company. The table below sets out the changes, if any, in
the type and number of units being operated.
April 2 Oct. 2 Mar 27 Note
2005 2004 2004 Number
-------- -------- -------- --------
Types of Units
-----------------------------------------------------------------
Company owned:
Combination package
and restaurant 4 4 4
Restaurant only 2 2 2
Package store only 5 5 5 (1)
Company Managed
Restaurants Only:
Limited Partnerships 5 5 5 (2) (3) (4)
Franchise 1 1 1
Company Owned Club: 1 1 1
Total Company
Owned/Operated Units 18 18 18
Franchised Units 7 7 7 (5)
Notes:
(1) During the second quarter of fiscal year 2001, the Company completed
renovations to its new corporate offices and relocated to the same. The new
corporate offices consist of a two (2) story building, with space set aside on
the ground floor for a package liquor store. The Company filed an application
for its building permits during the third quarter of fiscal year 2002, but is
still involved in litigation with the adjacent shopping center over the
Company's right to non-exclusive parking in the shopping center. The
construction of the package liquor store has been postponed until the litigation
is concluded, which should occur during fiscal year 2005. This package liquor
store is not included in the table of units.
15
(2) During the third quarter of fiscal year 2003, the Company, as general
partner of the limited partnership, entered into a Sale of Business Agreement
for the purchase of an existing business in Pinecrest, Florida, which
transaction closed during the first quarter of fiscal year 2004. The Company, as
general partner of the limited partnership, is proceeding with necessary
structural repairs, while preserving its right to pursue a claim against the
landlord for its contribution to the additional structural repairs and
reimbursement of rent paid while the processing of its building plans is
delayed. The structural repairs should be completed during the fourth quarter of
fiscal year 2005, after which the limited partnership's building plans will be
processed by Pinecrest, Florida, building permits issued and the renovations
made to the business premises. It is anticipated that the renovated restaurant
will be open for business by the end of calendar year 2005 and is not included
in the table of units.
(3) During the third quarter of fiscal year 2003, a limited partnership was
formed with the Company as general partner, which limited partnership entered
into a lease agreement to own and operate a restaurant in a Howard Johnson's
Hotel in Stuart, Florida. During the fourth quarter of fiscal year 2003, the
limited partnership raised funds through a private offering to renovate the
business premises for operation as a "Flanigan's Seafood Bar and Grill"
restaurant. The Company acts as general partner and owns a twelve percent
limited partnership interest. The restaurant opened for business on January 11,
2004.
(4) During the fourth quarter of fiscal year 2004, a limited partnership was
formed with the Company as general partner, which limited partnership entered
into a lease agreement to own and operate a restaurant in Wellington, Florida
under the "Flanigan's Seafood Bar and Grill" servicemark. During the first
quarter of fiscal year 2005, the limited partnership raised funds through a
private offering to renovate the business premises for operation as a
"Flanigan's Seafood Bar and Grill" restaurant. The Company acts as general
partner and owns a twenty six percent limited partnership interest. It is
anticipated that the renovated restaurant will open for business during the
third quarter of fiscal year 2005 and is not included in the table of units.
(5) Since the fourth quarter of 1999, the Company has managed the restaurant for
a franchisee. The franchised restaurant is included in the table of units as a
restaurant operated by the Company and the franchise is also included as a unit
franchised by the Company and in which the Company has an interest.
Results of Operation
--------------------
Thirteen Weeks Ended
April 2, Mar. 27,
2005 2004
Amount Percent Amount Percent
-------------- --------------
(In Thousands) (In Thousands)
Restaurant food sales $ 7,351 60.59 $ 7,262 60.68
Restaurant bar sales 1,708 14.07 1,747 14.60
Package goods sales 3,073 25.34 2,957 24.72
-------- -------- -------- --------
Total sales $ 12,132 100.00 $ 11,966 100.00
Franchise related revenues 200 295
Owners fee 37 38
Other operating income 80 2
-------- --------
Total Revenue $ 12,449 $ 12,301
======== ========
16
Twenty Six Weeks Ended
April 2, Mar. 27,
2005 2004
Amount Percent Amount Percent
-------------------- -------------------
(In Thousands) (In Thousands)
Restaurant food sales $ 13,949 59.00 $ 13,235 59.67
Restaurant bar sales 3,287 13.88 3,186 14.36
Package goods sales 6,409 27.12 5,758 25.97
-------- -------- -------- --------
Total sales $ 23,645 100.00 $ 22,179 100.00
Franchise related revenues 450 614
Owners fee 75 92
Other operating income 104 43
-------- --------
Total Revenue $ 24,274 $ 22,928
======== ========
As the table above illustrates, total revenues increased by 1.20% and 5.87% for
the thirteen weeks and twenty six weeks of fiscal year 2005, respectively, as
compared to the total revenues for the thirteen weeks and twenty six weeks of
fiscal year 2004. The increase in total revenue for the twenty six weeks, was
primarily due to the restaurant in Stuart, Florida being open for the first
quarter of fiscal year 2005 and the package goods store in Hollywood, Florida
being open for the entire first quarter of fiscal year 2005. Total revenues
should continue to increase due to the opening of the restaurant in Wellington,
Florida during the third quarter of fiscal year 2005. The restaurant in
Pinecrest, Florida will not open for business prior to the end of fiscal year
2005 and will not contribute to total revenues during the fiscal year.
Restaurant food sales represented 60.59% and 59.00% of total sales in the
thirteen weeks and twenty six weeks of fiscal year 2005, respectively, as
compared to 60.68% and 59.67% of total sales in the thirteen weeks and twenty
six weeks of fiscal year 2004 respectively. The weekly average of same store
restaurant food sales, which now includes three joint ventures restaurants
instead of one, were $437,403 and $423,762 for the twenty six weeks, ended April
2, 2005 and March 27, 2004, respectively, an increase of 3.2%. The weekly
average of same store restaurant food sales were $463,403 and $452,271 for the
thirteen weeks ended April 2, 2005 and March 27, 2004, respectively, an increase
of 2.4%. The increase in restaurant food sales for both the thirteen weeks and
the twenty six weeks of fiscal year 2005 is due to menu price increases and the
continued increase in the weekly average of same store restaurant food sales.
Restaurant food sales should continue to increase throughout the balance of the
fiscal year due to additional
17
menu price increases instituted subsequent to the end of the second fiscal
quarter to off-set increased costs, especially higher payroll costs due to the
new Florida minimum wage, effective May 2, 2005.
Restaurant bar sales represented 14.07% and 13.88% of total sales in the
thirteen weeks and twenty six weeks of fiscal year 2005, respectively, as
compared to 14.60% and 14.36% of total sales in the thirteen weeks and twenty
six weeks of fiscal year 2004, respectively. Restaurant bar sales were
$1,708,000 and $1,747,000 for the thirteen weeks ended April 2, 2005 and March
27, 2004 respectively, a decrease of 2.2%. Restaurant bar sales were $3,287,000
and $3,186,000 for the twenty six weeks ended April 2, 2005 and March 27, 2004,
respectively, an increase of 3.2%. Restaurant bar sales decreased during the
thirteen weeks ended April 2, 2005 due primarily to the decrease in restaurant
bar sales generated by the joint venture restaurant in Stuart, Florida, which
had just opened for business during the thirteen weeks ended March 27, 2004, and
the joint venture restaurant in Weston, Florida which has been adversely
affected by four (4) competitors who have opened for business in the immediate
vicinity since the beginning of the calender year. Restaurant bar sales
increased during the twenty six weeks ended April 2, 2005 due primarily to the
joint venture restaurant in Stuart, Florida being open for the entire twenty six
weeks versus thirteen weeks of the prior fiscal year. The weekly average of same
store restaurant bar sales were $100,653 and $96,176 for the twenty six weeks
ended April 2, 2005 and March 27, 2004, respectively, an increase of 4.7%. The
weekly average of same store restaurant bar sales were $105,079 and $100,079 for
the thirteen weeks ended April 2, 2005 and March 27, 2004, respectively, an
increase of 5.0%. The increase in the weekly average of same store restaurant
bar sales for both the thirteen weeks and twenty six weeks of fiscal year 2005
is consistent with the increase in the weekly average of same store restaurant
food sales and is also attributed to promotions designed to increase restaurant
bar sales. Subsequent to the end of the second quarter of fiscal year 2005, the
Company introduced additional promotions designed to increase restaurant bar
sales, without jeopardizing the Company's perception as a family restaurant.
Package goods sales represented 25.34% and 27.12% of total sales in the thirteen
weeks and twenty six weeks of fiscal year 2005, respectively, as compared to
24.72% and 25.97% of total sales in the thirteen weeks and twenty six weeks of
fiscal year 2004, respectively. The weekly average of same store package good
sales were $223,743 and $210,468 for the twenty six weeks, ended April 2, 2005
and March 27, 2004, respectively, an increase of 6.3%. The weekly average of
same store package sales were $215,649 and $213,520 for the thirteen weeks ended
April 2, 2005 and March 27, 2004 respectively, an increase of 1.0%. The increase
was primarily due to increased volume. Package good sales are expected to
continue increasing through the balance of fiscal year 2005 due to the continued
increase in the weekly average of same store package sales.
The gross profit margin for restaurant and bar sales was 65.00% and 65.42% for
the thirteen weeks ended April 2, 2005 and March 27, 2004, respectively. The
gross profit margin for the restaurant and bar sales was 64.63% and 65.41% for
the twenty six weeks ended April 2, 2005 and March 27, 2004, respectively. The
gross profit margin for restaurant and bar sales for the thirteen weeks and
twenty six weeks of fiscal year 2005 were adversely effected by higher food
costs, especially the cost of ribs. The Company's annual contract with its rib
supplier for calendar year 2005 is at a more favorable cost than the expiring
annual contract from calendar year 2004, but at the start of the thirteen weeks
ending March 27, 2004, the Company still had ribs remaining from its annual
contract from calendar year 2003, at a significantly lower cost. The Company has
offset these increased food costs by menu price increases and will continue to
do so, where competitively possible, through the remainder of fiscal year 2005.
The gross profit margin for package goods stores was 28.25% and 28.27% for the
thirteen weeks ended April 2, 2005 and March 27, 2004, respectively. The gross
profit margin for package goods stores was 28.16% and 28.19% for the twenty six
weeks ended April 2, 2005 and March 27, 2004, respectively. The consistency in
gross profit is attributed to the purchase of "close out" and merchandise
reduction from wholesalers and the continued implementation of a new training
program for package store employees. The gross profit margin for package goods
sales is expected to remain constant through the balance of fiscal year 2005.
18
Operating Costs and Expenses
Operating costs and expenses were $ 11,851,000 and $11,919,000 for the thirteen
weeks ended April 2, 2005 and March 27, 2004 respectively, a decrease of 0.57%.
Operating costs and expenses were $23,337,000 and $22,194,000 for the twenty six
weeks ended April 2, 2005 and March 27, 2004, respectively, an increase of
5.15%. The decrease in operating costs and expenses for the thirteen weeks ended
April 2, 2005 was primarily due to the opening costs of the restaurant in
Stuart, Florida during the second quarter of fiscal year 2004 and efforts by the
Company to reduce costs, where possible. The increase in operating costs and
expenses for the twenty six weeks ended April 2, 2005 was primarily due to the
operation of the restaurant in Stuart, Florida during the first quarter of
fiscal year 2005 and the package goods store in Hollywood, Florida being open
for the entire first quarter of fiscal year 2005, as well as a general increase
in overall operating costs and expenses. Operating costs and expenses are
expected to continue increasing through the balance of fiscal year 2005 with the
anticipated opening of the restaurant in Wellington, Florida during the third
quarter of fiscal year 2005 and a general increase in overall operating costs
and expenses, including but not limited to food costs. The new restaurant in
Pinecrest, Florida will not be open for business, nor will it be preparing to
open for business prior to the end of fiscal year 2005, so the opening or
preparation for opening of the new restaurant in Pinecrest, Florida will not
increase operating costs and expenses for the balance of the fiscal year.
Payroll and related costs were $3,336,000 and $3,443,000 for the thirteen weeks
ended April 2, 2005 and March 27, 2004 respectively, a decrease of 3.11%.
Payroll and related costs were $6,459,000 and $6,274,000 for the twenty six
weeks ended April 2, 2005 and March 27, 2004, respectively, an increase of
2.95%. The decrease in payroll for the thirteen weeks ended April 2, 2005 was
due primarily to the increased labor costs associated with the opening of the
restaurant in Stuart, Florida during the second quarter of fiscal year 2004. The
increase in payroll and related costs for the twenty six weeks ending April 2,
2005 was due to the operation of the restaurant in Stuart, Florida and the new
package store in Hollywood, Florida for the entire twenty six weeks. Payroll and
related costs will increase through the balance of fiscal year 2005 primarily
due to the new Florida minimum wage which increased the minimum wage paid to
"tipped" employees from $2.13 per hour to $3.13 per hour effective May 2, 2005,
subject also to an annual increase based upon the percentage increase in the
cost of living index, and with the opening of the restaurant in Wellington,
Florida. The Company had no alternative but to increase menu prices to offset
anticipated higher payroll and related costs due to the increase in the Florida
minimum wage.
Occupancy costs which include rent, common area maintenance, repairs and taxes
were $669,000 and $716,000 for the thirteen weeks ended April 2, 2005 and March
27, 2004 respectively, a decrease of 6.56%. Occupancy costs were $1,365,000 and
$1,303,000 for the twenty six weeks ended April 2, 2005 and March 27, 2004,
respectively, an increase of 4.76%. The decrease in occupancy costs for the
thirteen weeks ended April 2, 2005 was due to the payment of past due property
taxes during the thirteen weeks ended March 27, 2004. The increase in occupancy
costs for the twenty six weeks ended April 2, 2005 is accounted for by the
payment of rent for the restaurant in Pinecrest, Florida for the entire twenty
six weeks versus thirteen weeks of the prior fiscal year. Occupancy costs will
continue to increase through the balance of fiscal year 2005 with the
19
payment of rent for the restaurant in Wellington, Florida commencing during the
third quarter of fiscal year 2005.
Selling, general and administrative expenses were $2,470,000 and $2,481,000 for
the thirteen weeks ended April 2, 2005 and March 27, 2004, respectively, a
decrease of 0.44%. Selling, general and administrative expenses were $4,813,000
and $4,732,000 for the twenty six weeks ended April 2, 2005 and March 27, 2004,
respectively, an increase of 1.71%. The decrease in selling, general and
administrative expenses for the thirteen weeks ended April 2, 2005 was due
primarily to the costs associated with the opening of the restaurant in Stuart,
Florida during the second quarter of fiscal year 2004, as well as efforts by the
Company to reduce costs, where possible. The increase in selling, general and
administrative expenses for the twenty six weeks ended April 2, 2005 was due to
the opening of the restaurant in Stuart, Florida and the new package store in
Hollywood, Florida being open for the entire twenty six weeks; expenses
associated with the restaurants in Wellington, Florida and Pinecrest, Florida;
and an overall increase in expenses generally.
New Joint Venture Restaurants
As the Company opens new joint venture restaurants on a more regular basis the
Company's income from operations will be adversely affected by the higher costs
associated with the opening of the same. To insure that a new restaurant opens
with the high quality of service for which the Company is known, the Company has
a select group of employees, known as "new restaurant openers", who travel to
new restaurants for that purpose. "New restaurant openers" may spend up to 90
days at a new restaurant. If the new joint venture restaurant is not local,
lodging has to be provided for the "new restaurant openers", which increases the
opening costs significantly. To date, lodging for "new restaurant openers" has
only been provided for the new joint venture restaurant in Stuart, Florida. In
addition, immediately prior to the opening of a new restaurant and in order to
provide a "test run" for the same, the Company sponsors pre-opening parties for
its joint venture investors and the Company employees.
In addition, the pre-opening rent is generally less for new leases, rather than
the purchase of an existing location which includes the assumption of an
existing lease. In the case of the joint venture restaurant in Wellington,
Florida, subsequent to the end of the second quarter of fiscal year 2005, the
Company, as general partner of the limited partnership which owns the joint
venture restaurant, extended the period of time in the lease agreement for
renovations prior to the commencement of the lease to two hundred ten (210) days
by adding two (2) months to the initial term of the lease. It is anticipated
that the restaurant will be renovated and open for business within two hundred
forty (240) days, in which event, pre-opening rent should still not exceed
$18,000. As of April 2, 2005, the pre-opening rent paid for the new joint
venture in Pinecrest, Florida aggregated $255,000 and continues at $17,000 per
month.
During the thirteen weeks and twenty six weeks ended April 2, 2005, the joint
venture in Wellington, Florida reported losses of $60,597 and $163,967
respectively and the joint venture restaurant in Pinecrest, Florida, which is
still undergoing structural repairs at this time, reported losses of $70,404 and
$150,818 respectively, thus reducing income from operations for the thirteen
weeks and twenty six weeks ending April 2, 2005. During the balance of fiscal
year
20
2005, income from operations will be adversely affected by the opening costs
still to be incurred for the new joint venture restaurants in Wellington,
Florida and Pinecrest, Florida.
Trends
During the next twelve months management expects continued increases in
restaurant sales, due primarily to the opening of the restaurant in Wellington,
Florida and Pinecrest, Florida and continued increases in same store restaurant
sales. Package good sales are also expected to increase due primarily to
increases in same store package goods sales. At the same time, management also
expects higher food costs, payroll costs and an overall increase in expenses.
The Company has already raised some of its menu prices to offset higher food
costs and payroll costs and will continue to do so wherever competitively
possible. During the next twelve months, management projects an increase in
overall profit before income tax.
Liquidity and Capital Resources
Cash Flows
The following table is a summary of the Company's cash flows for the twenty six
weeks of fiscal years 2005 and 2004.
Twenty Six Weeks Ended
April 2 Mar. 27
2005 2004
----------------------
(In Thousands)
Net cash provided by
operating activities $ 1,381 $ 2,176
Net cash (used in)
investing activities (845) (845)
Net cash provided by (used in)
financing activities 83 (30)
-------- --------
Net Increase in Cash and Cash Equivalents 619 1,301
Cash and Cash Equivalents, Beginning 2,936 1,587
-------- --------
Cash and Cash Equivalents, Ending $ 3,555 $ 2,888
======== ========
On December 9, 2004, the Company declared a cash dividend of 32 cents per share
payable on January 28, 2005 to the shareholders of record on January 14, 2005.
On December 18, 2003 the Company declared a cash dividend of 30 cents per share
payable on January 15, 2004 to shareholders of record on December 30, 2003.
21
Capital Expenditures
The Company had additions to fixed assets of $881,000 during the twenty six
weeks ended April 2, 2005 as compared to $1,038,000 for the twenty six weeks
ended March 27, 2004 and $1,873,000 for the fiscal year ended October 2, 2004.
The additions to fixed assets during the twenty six weeks ended April 2, 2005
included the renovations to the business premises of the restaurant in
Wellington, Florida, while the addition to fixed assets during the twenty six
weeks ended March 27, 2004 included the renovations to the business premises of
the restaurant in Stuart, Florida.
All of the Company's units require periodic refurbishing in order to remain
competitive. The budget for fiscal year 2005 for the foregoing is $325,000. The
Company expects the funds for these improvements to be provided from operations.
In addition, during the first quarter of fiscal year 2005, the limited
partnership which owns the restaurant in Wellington, Florida completed its
private offering, raising the sum of $1,850,000 towards capital expenditures for
fiscal year 2005. It is anticipated that the joint venture in Pinecrest, Florida
will require approximately $2,800,000 in capital expenditures, the majority of
which will be raised through a private offering.
Long Term Debt
As of the fiscal quarter ending April 2, 2005, the Company had long term debt of
$1,399,000, compared to $1,446,000 and $1,314,000 for the fiscal quarter ending
January 1, 2005 and the fiscal year ending October 2, 2004 respectively, a
decrease of 3.3% from the fiscal quarter ending January 1, 2005 and an increase
of 6.5% from the fiscal year ending October 2, 2004. The decrease in long term
debt as of the fiscal quarter ending April 2, 2005 when compared to the long
term debt as of the fiscal quarter ending January 1, 2005 includes a $16,500
discount on the re-financing of a purchase money chattel mortgage by one of the
limited partnerships. The increase in long term debt as of the fiscal quarter
ending April 2, 2005, when compared to long term debt as of the fiscal year
ending October 2, 2004, includes the unsecured $100,000 loan from Bank Atlantic
and two (2) secured auto loans, in the aggregate amount of $65,000, originating
during the first quarter of fiscal year 2005.
Working Capital
The table below summarizes the current assets, current liabilities, and working
capital for the fiscal quarters ended April 2, 2005, and March 27, 2004 and the
fiscal year ended October 2, 2004.
April 2, Mar. 27, Oct. 2,
Item 2005 2004 2004
-------- -------- --------
(In Thousands)
Current Assets $ 7,475 $ 6,378 $ 5,889
Current Liabilities 4,872 4,104 3,758
-------- -------- --------
Working Capital 2,603 2,274 2,131
22
Working capital for the fiscal quarter ending April 2, 2005 increased by 14.47%
and 22.15% from the working capital for the fiscal quarter ending March 27, 2004
and the fiscal year ending October 2, 2004, respectively. The increase in
working capital is due to the completion of the private offering by the limited
partnership owning the restaurant in Wellington, Florida during the first
quarter of fiscal year 2005. In addition, the Company made minimal advances in
excess of the monthly rent paid for the restaurant in Pinecrest, Florida during
the second quarter of fiscal year 2005.
Management believes that positive cash flow from operations will adequately fund
operations, debt reductions and planned capital expenditures during the balance
of fiscal year 2005. However, it is also anticipated that during the balance of
fiscal year 2005, working capital will be adversely affected by investments
and/or advances made by the Company to the limited partnership in Pinecrest,
Florida pending reimbursement of advances made by the Company in excess of its
investment once the private offering by the limited partnership is completed and
the exercise by the Company of its option to purchase the real property and
ground lease of one location currently leased by the Company.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company does not ordinarily hold market risk sensitive instruments for
trading purposes but as of April 2, 2005 holds one equity security at a cost of
$303,000 to receive dividend payments and for the Company to satisfy debt in the
future. There is no assurance that market price will increase or decrease in the
next year. Even if the price of the equity security decreased by 10% below its
cost, results of operations would be reduced by $30,000, an amount management
considers immaterial.
Interest Rate Risk
At April 2, 2005, the Company has two debt arrangements which have variable
interest rates. For one of these instruments, a mortgage note, the Company has
entered into an interest rate swap agreement to hedge the interest rate risk.
The mortgage note has an outstanding principal balance at April 2, 2005 of
$824,219.
During the first quarter of fiscal year 2005, the Company closed on a new
unsecured loan from Bank Atlantic, in the principal amount of $100,000, which
funds are to be used in connection with the Company's exercise of an option to
purchase the real property and take an assignment of a ground lease at one of
its locations. The promissory note has a variable interest, at prime, but even
if interest rates increased by 10%, results of operations would be reduced by
less than $10,000, an amount management considers immaterial.
At April 2, 2005, the Company's cash resources earn interest at variable rates.
Accordingly, the Company's return on these funds is affected by fluctuations in
interest rates. Any decrease in interest rates will have negative effect on the
Company's earnings. In addition, the Company incurs interest charges on debt at
variable rates, which to the extent the Company has not entered
23
into interest rate swap agreements to hedge this risk, could negatively impact
the Company's earnings. There is no assurance that interest rates will increase
or decrease over the next fiscal year.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Within the ninety (90) day period prior to the filing of this quarterly report,
our Chief Executive Officer and Chief Financial Officer have, with the
participation of management and the assistance of an independent third party
expert, evaluated the effectiveness of the design and operation of the Company's
"disclosure controls and procedures" (as defined in the Securities Exchange Act
of 1934 ("Exchange Act") Rule 13a-15(e) of 15d-15(e)). It is the conclusion of
our Chief Executive Officer and Chief Financial Officer that such disclosure
controls and procedures operate such that important information flows to
appropriate collection and disclosure points in a timely manner and are
effective in ensuring that material information is accumulated and communicated
to management and made known to the Chief Executive Officer and Chief Financial
Officer particularly during the period in which this report was prepared, as
appropriate, to allow timely decisions regarding timely disclosure. In designing
and evaluating the disclosure controls and procedures, management recognizes
that any system of controls and procedures, no matter how well designed and
operated, is subject to limitations, including the exercise of our judgment in
evaluating the same. As a result, there can be no assurance that our disclosure
controls and procedures will prevent all errors.
(b) Change in Internal Control over Financial Reporting
During the second quarter of fiscal year 2005, the Company continued to assess
the effectiveness of our "internal controls over financial reporting" on an
account by account basis as a part of our on-going accounting and financial
reporting review process. The assessments were made by management, under the
supervision of our Chief Financial Officer. We made no changes in our internal
control over financial reporting during the fiscal quarter ending April 2, 2005
that materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting. Notwithstanding, the
effectiveness of our system of internal control over financial reporting is
subject to limitations, including the exercise of our judgment in evaluating the
same. As a result, there can be no assurance that our internal control over
financial reporting will prevent all errors.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings: See "Litigation" on page 11 of this report and Item
1 and Item 3 to Part 1 of the Annual Report on Form 10-K for the fiscal year
ended October 2, 2004 for a discussion of other legal proceedings resolved in
prior years.
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds: None
Item 3 - Defaults Upon Senior Securities: None
24
Item 4 - Submission of Matters to a Vote of Security Holders: None
Item 5 - Other Information: None
Item 6 - Exhibits and Reports on Form 8-K
a. Exhibits: Exhibits 31.1, 31.2, 32.1 and 32.2 (Certifications)
b. Form 8-K - None
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized. The information furnished reflects all
adjustments to the statement of the results for the interim period.
FLANIGAN'S ENTERPRISES, INC.
Date: May 17, 2005 /s/ James G. Flanigan
--------------- ----------------------------------------------
JAMES G. FLANIGAN
Chief Executive Officer and President
Date: May 17, 2005 /s/ Jeffrey D. Kastner
--------------- ----------------------------------------------
JEFFREY D. KASTNER
Chief Financial Officer and Secretary
25