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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 29, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO. 0-14311
FAMILY STEAK HOUSES OF FLORIDA, INC.
(exact name of registrant as specified in its charter)
FLORIDA NO. 59-2597349
(State of Incorporation) (I.R.S. Employer Identification)
2113 FLORIDA BOULEVARD
NEPTUNE BEACH, FLORIDA 32266
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (904) 249-4197
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE
(Title of Class)
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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 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 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.
[ ]
As of February 25, 2000, 2,409,000 shares of Common Stock of the
registrant were outstanding. The aggregate market value of such voting Common
Stock (based upon the closing sale price of the registrant's Common Stock on
the NASDAQ SmallCap Market System on February 22, 2000, as reported in The Wall
Street Journal) held by non-affiliates of the registrant was approximately
$2,635,000.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's 1999 Annual Report to Shareholders are
incorporated by reference into Part II. Portions of the Proxy Statement for the
registrant's 2000 Annual Meeting of Shareholders are incorporated by reference
into Part III.
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PART I
ITEM 1. BUSINESS
GENERAL
Family Steak Houses of Florida, Inc. ("Family" or the "Company"), is
the sole franchisee of Ryan's Family Steak House restaurants ("Ryan's
restaurants") in the State of Florida.
The Company's first Ryan's restaurant was opened in Jacksonville,
Florida, in May 1982. The Company presently operates 22 Ryan's restaurants in
Florida.
A Ryan's restaurant is a family-oriented restaurant serving
high-quality, reasonably-priced food in a casual atmosphere with
server-assisted service. Ryan's restaurants serve lunch and dinner seven days a
week and offer a variety of charbroiled entrees, including various cuts of
beef, chicken, and seafood. Most of the restaurants serve a brunch on weekends
only. Each restaurant features a diverse selection of items from "scatter bars"
and a separate fresh bakery and dessert bar. In addition to traditional salad
bar items, the scatter bars offer hot meats, pre-made salads, soups, baked
potatoes with toppings, cheeses and a variety of vegetables.
The Company believes that its operating strategy of selling
top-quality meals at reasonable prices, at food costs to the Company which are
higher than the industry average, creates a perception of value to its
customers.
The Company operates its Ryan's restaurants under a Franchise
Agreement with Ryan's Family Steak Houses, Inc., ("Ryan's", or the
"Franchisor") which grants the Company the exclusive right to operate Ryan's
Family Steak House restaurants throughout North and Central Florida.
COMPANY HISTORY
The Company was formed by the combination, effective September 1985,
of six limited partnerships, each of which owned and operated a Ryan's
restaurant franchise. In April 1986, the Company issued 4,266,000 shares of its
common stock in exchange for the assets and liabilities of the predecessor
partnerships and 1,134,000 shares of its common stock to Eddie L. Ervin, Jr.,
in consideration for Mr. Ervin assigning to the Company all of his rights under
the Franchise Agreement, as defined below. The Company completed its initial
public offering of 4,500,000 shares of its
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common stock in 1986 resulting in net proceeds to the Company of approximately
$4,145,000.
FRANCHISE AGREEMENT
The Company operates its Ryan's restaurants under a Franchise
Agreement between the Company and the Franchisor dated as of September 16,
1987, which Franchise Agreement amended and consolidated all previous franchise
agreements (as amended, the "Franchise Agreement"). The Franchise Agreement
extends through December 31, 2010 and provides for two additional ten-year
renewal options. The renewal options are subject to certain conditions,
including the condition that the Company has fully and faithfully performed its
obligations under the Franchise Agreement during its original term. Under the
terms of the Franchise Agreement, the Company has the right to use the
registered mark "Ryan's Family Steak House" and the right to use the
Franchisor's techniques in the operation of Ryan's Family Steak House
restaurants.
In 1996, the Company and the Franchisor amended the Franchise
Agreement. The amended agreement requires the Company to pay a royalty fee of
3.0% through December 2001 and 4.0% thereafter on the gross receipts of each
Ryan's Family Steak House restaurant. Total royalty fee expenses were
$1,165,300, $1,150,900, and $1,108,400, for the fiscal years ended December 29,
1999, December 30, 1998, and December 31, 1997, respectively.
The Franchise Agreement requires the Company to operate a minimum
number of Ryan's restaurants on December 31 of each year. Failure to operate
the minimum number of restaurants could result in the loss of exclusive
franchise rights to the Ryan's concept in North and Central Florida. In 1999,
the Company and Ryan's amended the number of restaurants required to be in
operation as detailed below. The Company operated 23 restaurants as of fiscal
year end 1999 and was therefore in compliance with the Franchise Agreement. In
February 2000 the Company sold a restaurant in Jacksonville, Florida, reducing
the number of operating restaurants to 22. The Company plans to open at least
two restaurants in 2000, and expects to be in compliance with the requirement.
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The following schedule outlines the number of Ryan's restaurants
required to be operated by the Company as of December 31 of each year under the
amended Franchise Agreement:
Number of
Restaurants Required to
End of Fiscal Year be in Operation
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1999 21
2000 23
2001 and subsequent years Increases by two each year
The amendment to the Franchise Agreement adopted in 1999 also
clarified that the Franchisor's consent is needed for certain kinds of
transactions.
The Franchise Agreement contains provisions relating to the operation
of the Company's Ryan's restaurants. Upon the Company's failure to comply with
such provisions, the Franchisor may terminate the Franchise Agreement if such
default is not cured within 30 days of notice from the Franchisor. Termination
of the Franchise Agreement would result in the loss of the Company's right to
use the "Ryan's Family Steak House" name and concept and could result in the
sale of the physical assets of the Company to the Franchisor pursuant to a
right of first refusal. Termination of the Company's rights under the Franchise
Agreement may result in the disruption, and possibly the discontinuance, of the
Company's operations. The Company believes that it has operated and maintained
each of its Ryan's Family Steak House restaurants in accordance with the
operational procedures and standards set forth in the Franchise Agreement, as
amended.
OPERATIONS OF RYAN'S RESTAURANTS
FORMAT. As of February 25, 2000, 19 of the Company's Ryan's
restaurants are located in free-standing buildings which vary in size from
7,500 to 12,000 square feet. Three of the Company's Ryan's restaurants are
located in shopping malls. Each restaurant is constructed of brick or stucco
walls, interior and exterior, with exposed woodwork. The interior of each
Ryan's restaurant contains a dining room, a customer ordering area, and a
kitchen. The dining rooms seat a total of between 270 and 500 persons and
highlight centrally located, illuminated scatter bars and a fresh bakery and
dessert bar. Each Ryan's restaurant has parking for approximately 100 to 175
cars on lots of overall size of approximately 50,000 to 70,000 square feet.
The Ryan's restaurants operate seven days a week. Typical hours of
operation are from 11:00 a.m. to 9:00 p.m., Sunday through Thursday, and from
11:00 a.m. to 10:00 p.m.,
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Friday and Saturday. Restaurants that serve breakfast open at 8:00 a.m.
Saturday and Sunday. In a Ryan's restaurant, the customer enters the
restaurant, orders from the menu, and then enters the dining room. Beverages
are brought to the table by servers. Entrees are cooked to order. The customer
ordering the salad bar is given unlimited access to the scatter bars and the
bakery and dessert bar. Customers receive table service of the entree and
beverage refills. For the fiscal year ended December 29, 1999, the average
weekly customer count per restaurant was approximately 4,900 and the average
meal price (including beverage) was approximately $6.35.
RESTAURANT MANAGEMENT AND SUPERVISION. The Company manages the Ryan's
restaurants pursuant to a standardized operating and control system together
with comprehensive recruiting and training of personnel to maintain food and
service quality. In each Ryan's restaurant, the management group consists of a
general manager, a manager and one to three assistant managers, depending on
sales volume. The Company requires at least two members of the management group
on duty during all peak serving periods. Management-level personnel usually
begin employment at the manager trainee or assistant manager level, depending
on prior restaurant management experience. All new management-level personnel
must complete the Company's five-week training period prior to being placed in
a management position.
Each restaurant management group reports to a supervisor. Presently,
the supervisors each oversee the operations of five to seven restaurants. The
supervisors report directly to the Director of Operations. Communication and
support from all departments in the Company are designed to assist the
supervisors in responding promptly to local problems and opportunities.
All restaurant managers and supervisors participate in incentive
programs based upon the profitability of their restaurants and upon the
achievement of certain pre-set goals. The Company believes these incentive
programs enable it to operate more efficiently and to attract qualified
managers. In 1999, the Company implemented an operating partner program for
certain managers to provide them with an additional career path and give them
increased incentive to maximize the profitability of their restaurants.
PURCHASING, QUALITY AND COST CONTROL. The Company has a centralized
purchase control program which is designed to ensure uniform product quality in
all restaurants. The program also helps to maintain reduced food, beverage, and
supply costs. The Company purchases approximately 95% of the products used by
the Company's restaurants through the centralized purchase control program.
USDA choice grain-fed
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beef, the Company's primary commodity, is closely monitored by the Company for
advantageous purchasing and quality control. The Company purchases beef through
various producers and brokers both on a contract basis and on a spot basis.
Beef and other products are generally delivered directly to the restaurants
three times weekly. The Company has in the past obtained satisfactory sources
of supply for all the items it regularly uses and believes it will be able to
do so in the future.
The Franchise Agreement requires that all suppliers to Ryan's
restaurants are subject to approval by the Franchisor. Through its relationship
with the Franchisor, the Company has obtained favorable pricing on the purchase
of food products from several suppliers. In June 1995, the Company renewed its
agreement with Kraft Foodservice, Inc. to serve as its primary supplier. Kraft
was subsequently purchased by Alliant Foodservice, Inc. The Alliant agreement
is cancelable at any time with 90 days notice.
The Company maintains centralized financial and accounting controls
for its restaurants. On a daily basis, restaurant managers forward customer
counts, sales information and supplier invoices to Company headquarters. On a
weekly basis, restaurant managers forward summarized sales reports and payroll
data. Physical inventories of all food and supply items are taken weekly, and
meat is inventoried daily.
DEVELOPMENT
GENERAL. The Company operated 22 Ryan's restaurants as of February 25,
2000.
SITE LOCATION AND CONSTRUCTION. The Company considers the specific
location of a restaurant to be important to its long-term success. The
Company's Franchisor assists the Company in selection of new restaurant sites.
The site selection process focuses on a variety of factors, including trade
area demographics (such as population density and household income level), an
evaluation of site characteristics (such as visibility, accessibility, and
traffic volume), and an analysis of the potential competition. In addition,
site selection is influenced by the general proximity of a site to other Ryan's
restaurants in order to improve the efficiency of the Company's field
supervisors and potential marketing programs. The Company generally locates its
restaurants near or adjacent to residential areas in an effort to capitalize on
repeat business from such areas as opposed to transient business.
The Company constructs its Ryan's restaurants using a general
contractor selected from several solicited bids. For
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certain new restaurants, the Company may use its construction subsidiary to
serve as the general contractor in order to expedite the process of obtaining
building permits. Management believes that by performing site selection through
the Franchisor, the Company can select superior sites with high average sales
volumes and control real estate costs. New Ryan's restaurants are usually
completed within four months of the date on which construction is commenced.
MANAGEMENT OF NEW RESTAURANTS. When a new Ryan's restaurant is opened,
the principal restaurant management positions are staffed primarily with
management personnel who have prior experience in a management position at
another of the Company's restaurants and who have undergone special training.
Prior to opening, all staff personnel at the new location undergo one week of
intensive training conducted by a training team. Such training includes
preopening drills in which test meals are served to the invited public. Both
the staff at the new location and personnel experienced in store openings at
other locations participate in the training and drills.
PROPRIETARY TRADE MARKS
The name "Ryan's Family Steak House," along with all ancillary signs,
building design and other symbols used in conjunction with the name, are the
primary trademarks and service marks of the Franchisor. Such marks are
registered in the United States. All of these registrations and the goodwill
associated with the Franchisor's trademarks are of material importance to the
Company's business and are licensed to the Company under the Franchise
Agreement.
COMPETITION
The food service business in Florida is highly competitive and is
often affected by changes in the taste and eating habits of the public,
economic conditions affecting spending habits, local demographics, traffic
patterns and local and national economic conditions. The principal bases of
competition in the industry are the quality and price of the food products
offered. Location, speed of service and attractiveness of the facilities are
also important factors. The Company's restaurants are in competition with
restaurants operated or franchised by national, regional and local restaurant
companies offering a similar menu, many of which have greater resources than
the Company. The Company is also in competition with specialty food outlets and
other vendors of food.
The amount of new competition near Company restaurants has increased
significantly in the past few years. In some
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cases, competitors have opened new restaurants with superior facilities close
to the Company's restaurants. In addition, in the past several years, many
restaurants have remodeled their restaurants so that they are similar to the
scatter bar format used by the Company. The increased competition had a
significant negative impact on sales of some Company restaurants in 1999.
Management has developed a plan to attempt to reduce the negative impact on
sales from new competition, but there can be no assurance that sales trends
will improve. The strategies implemented include the installation of an
exhibition grill cooking area in one restaurant, which has to date offset any
negative impact from a newly opened competitor's restaurant, and the addition
of "all you can eat" steak nights on certain nights at all Company restaurants,
which has resulted in positive sales trends for those nights. In addition, the
Franchisor has the right to operate restaurants in several west Florida and
south Florida counties.
EMPLOYEES
As of December 29, 1999, the Company employed approximately 1,100
persons, of whom approximately 50% are considered by management as part-time
employees. No labor unions currently represent any of the Company's employees.
The Company has not experienced any work stoppages attributable to labor
disputes and considers employee relations to be good.
EXECUTIVE OFFICERS
The following persons were executive officers of the Company effective
December 29, 1999:
Edward B. Alexander, age 41, has been Executive Vice President since
September 1999, and has been Chief Financial Officer of the Company since 1990.
In addition, Mr. Alexander served on the Company's Board of Directors from May
1996 to July 1999.
Kevin R. Pickett, age 40, has been Vice President of the Company since
September 1999, and Director of Operations of the Company since August 1996.
Mr. Pickett served as regional supervisor for the Company from July 1993 to
August 1996, and was a manager of various Company restaurants from October 1988
to June 1993.
GOVERNMENT REGULATION
The Company is subject to the Fair Labor Standards Act which governs
such matters as minimum wage requirements, overtime and other working
conditions. A large number of
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the Company's restaurant personnel are paid at or slightly above the federal
minimum wage level and, accordingly, any change in such minimum wage will
affect the Company's labor costs. The Company is also subject to the Equal
Employment Opportunity Act and a variety of federal and state statutes and
regulations. Any new legislation or regulation that may require the Company to
pay more in health insurance premiums may adversely affect the Company's labor
costs. The Company's restaurants are constructed to meet local and state
building requirements and are operated in accordance with state and local
regulations relating to the preparation and service of food. More stringent and
varied requirements of local governments with respect to land use, zoning and
environmental factors may in some cases delay the Company's construction of new
restaurants or remodels of existing ones.
The Company believes that it is in substantial compliance with all
applicable federal, state and local statutes, regulations and ordinances
including those related to protection of the environment and that compliance
has had no material effect on the Company's capital expenditures, earnings or
competitive position, and such compliance is not expected to have a material
adverse effect upon the Company's operations. The Company, however, cannot
predict the impact of possible future legislation or regulation on its
operations.
SOURCES AND AVAILABILITY OF RAW MATERIALS
The Company procures its food and other products from a variety of
suppliers, and follows a policy of obtaining its food and products from several
major suppliers under competitive terms. A substantial portion of the beef used
by the Company is obtained from one supplier, although the Company believes
comparable beef meeting its specifications is available in adequate quantities
from other suppliers. To ensure against interruption in the flow of food
supplies due to unforeseen or catastrophic events, to take advantage of
favorable purchasing opportunities, and to insure that meat received by the
Company is properly aged, the Company maintains a two to six-week supply of
beef.
WORKING CAPITAL REQUIREMENTS
Substantially all of the Company's revenues are derived from cash
sales. Inventories are purchased on credit and are converted rapidly to cash.
The Company does not maintain significant receivables and inventories.
Therefore, with the exception of debt service, working capital requirements for
continuing operations are not significant.
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In December 1996, the Company entered into a $15.36 million Loan
Agreement with FFCA Mortgage Corporation ("FFCA"). The Loan Agreement governs
fifteen Promissory Notes payable to FFCA. Each Note is secured by a mortgage on
a Company restaurant property. The Promissory Notes provide for a term of
twenty years and an interest rate equal to the thirty-day LIBOR rate plus
3.75%, adjusted monthly. The Loan Agreement provides for various covenants,
including the maintenance of prescribed debt service coverages.
The Company used the proceeds of the FFCA loan to retire its Notes
with Cerberus Partners, L.P. ("Cerberus") and its loans with the Daiwa Bank
Limited and SouthTrust Bank of Alabama, N.A. In addition, the Company retired
warrants for 210,000 shares of the Company's common stock previously held by
Cerberus. Cerberus continues to hold warrants to purchase 140,000 shares of the
Company's common stock at an exercise price of $2.00 per share.
Also in December 1996, the Company entered into a separate loan
agreement with FFCA under which it borrowed an additional $2,590,000 in 1998.
This additional financing is evidenced by three additional Promissory Notes
secured by mortgages on three Company restaurant properties. The terms and
conditions of this loan agreement are substantially identical to those of the
$15.36 million Loan Agreement described above.
In October 1998, the Company received two commitments for new
financing from FFCA. The Company borrowed a total of $2.6 million in 1999 under
the first commitment, which is secured by mortgages on two restaurant
properties.
The second commitment was for construction financing for two new
restaurants to be built in 2000. Terms of this commitment include funding of a
maximum of $1,600,000 per restaurant. Other terms and conditions of these loan
agreements are substantially identical to those of the $15.36 million Loan
Agreement described above.
SEASONALITY
The Company's operations are subject to seasonal fluctuations.
Revenues per restaurant generally increase from January through April and
decline from September through December.
RESEARCH
The Company relies primarily on the Franchisor to maintain ongoing
research programs relating to the development of new products and evaluation of
marketing activities. Although research and development activities
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are important to the Company, no expenditures for research and development have
been incurred by the Company.
CUSTOMERS
No material part of the Company's business is dependent upon a single
customer or a few customers.
INFORMATION AS TO CLASSES OF SIMILAR PRODUCTS OR SERVICES
The Company operates in only one industry segment. All significant
revenues and pre-tax earnings relate to retail sales of food to the general
public through restaurants owned and operated by the Company. The Company has
no operations outside the continental United States.
ITEM 2. PROPERTIES
Location Date Opened
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Jacksonville May 1982
Orange Park May 1984
Ocala September 1986
Neptune Beach November 1986
Lakeland February 1987
Lakeland March 1987
Winter Haven August 1987
Apopka September 1987
Gainesville December 1987
New Port Richey May 1988
Tampa June 1988
Tallahassee August 1988
Daytona Beach September 1988
Tampa November 1988
Orlando February 1989
Clearwater July 1989
Melbourne October 1989
Lake City March 1991
Brooksville January 1997
Leesburg June 1998
Deland April 1999
Tampa September 1999
As of February 25, 2000, the Company operated 22 Ryan's restaurants.
The specific rate at which the Company is able to open new restaurants will be
determined, among other factors, by its ability to locate suitable sites on
satisfactory terms, raise the necessary capital, secure appropriate
governmental permits and approvals and recruit and train management personnel.
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As of December 29, 1999, the Company owned the real property on which
17 of its restaurants were located. All of these properties are subject to
mortgages securing the FFCA notes.
The Company leases the real property on which five of its restaurants
are located. Those restaurants are located in Jacksonville, Clearwater,
Brooksville, Leesburg, and Tampa, Florida. The Company also leases two
buildings in Jacksonville, Florida for its executive offices.
The Company's lease on its restaurant in Clearwater, Florida expired
September 1999, and the Company's restaurant there is currently operating on a
month-to-month rental. Due to a prior ruling by the Sixth Judicial Court in
Pinellas County, the Company did not have any renewal options on the lease. In
February 2000, the mall where the restaurant is located was sold to a new
owner. The new owner has offered the Company a new five-year lease agreement,
but with substantially higher monthly rental than is currently paid. The
Company is currently negotiating a short-term lease (twelve to eighteen
months), and believes that such an agreement will be executed in the near
future. Should no agreement be reached, the owner could evict the Company with
30 days notice, and the Company would be required to write-off approximately
$260,000 of leasehold improvements.
ITEM 3. LEGAL PROCEEDINGS
The Company is subject from time to time to various pending legal
proceedings arising in the normal course of business. In the opinion of
management, based on the advice of legal counsel, the ultimate disposition of
currently pending claims and litigation will not have material adverse effect
on the financial position or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The information contained under the caption "Common Stock Data" in the
Company's 1999 Annual Report to Shareholders is incorporated herein by
reference.
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ITEM 6. SELECTED FINANCIAL DATA
The information contained under the caption "Five-Year Financial
Summary" in the Company's 1999 Annual Report to Shareholders is incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information contained under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the Company's
1999 Annual Report to Shareholders is incorporated herein by reference.
ITEM 7.A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISK
The Company is exposed to market risk from changes in interest rates.
For its cash and cash equivalents, investments and mortgages receivable, a
change in interest rates effects the amount of interest income than can be
earned. For its debt instruments, a change in interest rates effects the amount
of interest expense incurred.
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The following table provides information about the Company's financial
instruments that are sensitive to changes in interest rates.
2000 2001 2002 2003 2004 Thereafter Total
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Assets
Overnight repurchase
account at variable
interest rate $ 575,000 $ 575,000
Weighted average
interest rate 3.7%
Certificates of deposit
at fixed interest rates $ 10,000 $ 10,000
Weighted average
interest rate 4.8%
Mortgages receivable at
fixed interest rate $ 77,800 159,800 $ 237,600
Weighted average
interest rate 9.0% 9.0%
Liabilities
Notes payable at
variable
interest rate $ 381,400 422,300 467,400 517,500 572,900 15,355,500 $17,717,000
Weighted average
interest rate 9.2% 9.2% 9.2% 9.2% 9.2% 9.2%
Long-term capital lease
at fixed interest rate $ 3,400 3,800 18,800 20,900 23,200 982,600 $ 1,052,700
Weighted average
interest rate 10.7% 10.7% 10.7% 10.7% 10.7% 10.7%
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements of the Company and the Report of
Independent Certified Public Accountants as contained in the Company's 1999
Annual Report to Shareholders are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information regarding directors contained under the caption
"Election of Directors" in the Company's Proxy Statement for the 2000 Annual
Meeting of Shareholders, which will be filed with the Securities and Exchange
Commission prior to April 27, 2000, is incorporated herein by reference.
The information regarding executive officers is set forth in Item 1 of
this report under the caption "Executive Officers."
The information regarding reports required under section 16(a) of the
Securities Exchange Act of 1934 contained under caption "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Company's proxy statement for
the 2000 Annual Meeting of Shareholders, which will be filed with Securities
and Exchange Commission prior to April 27, 2000 is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
The information contained under the caption "Executive Pay" in the
Company's Proxy Statement for the 2000 Annual Meeting of Shareholders, which
will be filed with the Securities and Exchange Commission prior to April 27,
2000, is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information contained under the captions "Security Ownership of
Certain Beneficial Owners and Management" in the Company's Proxy Statement for
the 2000 Annual Meeting of Shareholders, which will be filed with the
Securities and Exchange Commission prior to April 27, 2000, is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained under the captions "Election of Directors -
Certain Relationships and Related Transactions" and "Compensation Committee
Interlocks and Insider Participation" in the Company's Proxy Statement for the
2000 Annual Meeting of Shareholders, which will be filed with the Securities
and Exchange Commission prior to April 27, 2000, is incorporated herein by
reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)1. The financial statements listed below are filed with this report on
Form 10-K or are incorporated herein by reference from the Company's
1999 Annual Report to Shareholders. With the exception of the pages
listed below, the 1999 Annual Report to Shareholders is not deemed
"filed" as a part of this report on Form 10-K.
Page
Reference
-----------------------
Form 1999
10-K Annual Report
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Consent of Independent Certified
Public Accountants 21
Independent Auditors' Report 27
Consolidated Statements of Operations 11
Consolidated Balance Sheets 12
Consolidated Statements of Share-
holders' Equity 13
Consolidated Statements of Cash Flows 14
Notes to Consolidated Financial
Statements 15
(a)2. No financial statement schedules have been included since the required
information is not applicable or the information required is included
in the financial statements or the notes thereto.
(a)3. The following exhibits are filed as part of this report on Form 10-K,
and this list comprises the Exhibit Index.
No. Exhibit
3.01 Articles of Incorporation of Family Steak Houses of Florida,
Inc. (Exhibit 3.01 to the Company's Registration Statement on
Form S-1, Registration No. 33-1887, is incorporated herein by
reference.)
3.02 Bylaws of Family Steak Houses of Florida, Inc. (Exhibit 3.02
to the Company's Registration Statement on Form S-1,
Registration No. 33-1887, is incorporated herein by
reference.)
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3.03 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3.03 to the
Company's Registration Statement on Form S-1, Registration
No. 33-1887, is incorporated herein by reference.)
3.04 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3.04 to the
Company's Registration Statement on Form S-1, Registration
No. 33-1887, is incorporated herein by reference.)
3.05 Amended and Restated Bylaws of Family Steak Houses of
Florida, Inc. (Exhibit 4 to the Company's Form 8-A, filed
with the Commission on March 19, 1997, is incorporated herein
by reference.)
3.06 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3 to the
Company's Form 8-A filed with the Commission on March 19,
1997, is incorporated herein by reference.)
3.07 Articles of Amendment to the Articles of Incorporation of
Family Steak Houses of Florida, Inc. (Exhibit 3.08 to the
Company's Annual Report on Form 10-K filed with the
Commission on March 31, 1998 is incorporated herein by
reference.)
3.08 Amendment to Bylaws of Family Steak Houses of Florida, Inc.
4.01 Specimen Stock Certificate for shares of the Company's Common
Stock (Exhibit 4.01 to the Company's Registration Statement
on Form S-1, Registration No. 33-1887, is incorporated herein
by reference.)
10.01 Amended Franchise Agreement between Family Steak Houses of
Florida, Inc. and Ryan's Family Steak Houses, Inc., dated
September 16, 1987. (Exhibit 10.01 to the Company's
Registration Statement on Form S-1, filed with the Commission
on October 2, 1987, Registration No. 33-17620, is
incorporated herein by reference.)
10.02 Lease regarding the restaurant located at 3549 Blanding
Boulevard, Jacksonville, Florida (Exhibit 10.03 to the
Company's Registration Statement on Form S-1, Registration
No. 33-1887, is incorporated herein by reference.)
10.03 Amended and Restated Warrant to Purchase Shares of Common
Stock, void after October 1, 2003, which
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represents warrants issued to The Phoenix Insurance Company,
The Travelers Indemnity Company, and The Travelers Insurance
Company, (subsequently transferred to Cerberus Partners,
L.P.) (Exhibit 10.07 to the Company's Annual Report on Form
10-K, filed with the Commission on March 28, 1995, is
incorporated herein by reference.)
10.04 Warrant to Purchase Shares of Common Stock, void after
October 1, 2003, which represents warrants issued to The
Phoenix Insurance Company, The Travelers Indemnity Company,
and The Travelers Insurance Company. (subsequently
transferred to Cerberus Partners, L.P.) (Exhibit 10.08 to the
Company's Annual Report on Form 10-K, filed with the
Commission on March 28, 1995, is incorporated herein by
reference.)
10.05 Amendment of Franchise Agreement between Ryan's Family Steak
Houses, Inc. and the Company dated July 11, 1994. (Exhibit
10.17 to the Company's Annual Report on Form 10-K, filed with
the Commission on March 28, 1995, is incorporated herein by
reference.)
10.06 Agreement between the Company and Kraft Foodservice, Inc., as
the Company's primary food product distribution. (Exhibit
10.06 to the Company's Quarterly Report on Form 10-Q, filed
with the Commission on August 9, 1995, is incorporated herein
by reference.)
10.07 Lease Agreement between the Company and CNL American
Properties Fund, Inc., dated as of September 18, 1996.
(Exhibit 10.02 to the Company's Quarterly Report on Form
10-Q, filed with the Commission on November 18, 1996 is
hereby incorporated by reference.)
10.08 Rent Addendum to Lease Agreement between the Company and CNL
American Properties Fund, Inc., dated as of September 18,
1996. (Exhibit 10.04 to the Company's Quarterly Report on
Form 10-Q, filed with the Commission on November 18, 1996 is
hereby incorporated by reference.)
10.09 Amendment of Franchise Agreement between the Company and
Ryan's Family Steak Houses, Inc. dated October 3, 1996.
(Exhibit 10.15 to the Company's Annual Report on Form 10-K,
filed with the Commission on April 1, 1997 is hereby
incorporated by reference.)
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10.10 $15.36m Loan Agreement, between the Company and FFCA Mortgage
Corporation, dated December 18, 1996. (Exhibit 10.18 to the
Company's Annual Report on Form 10-K, filed with the
Commission on April 1, 1997 is hereby incorporated by
reference.)
10.11 $4.64m Loan Agreement, between the Company and FFCA Mortgage
Corporation, dated December 18, 1996. (Exhibit 10.19 to the
Company's Annual Report on Form 10-K, filed with the
Commission on April 1, 1997 is hereby incorporated by
reference.)
10.12 Form of Promissory Note between the Company and FFCA Mortgage
Corporation, dated December 18, 1996. (Exhibit 10.20 to the
Company's Annual Report on Form 10-K, filed with the
Commission on April 1, 1997 is hereby incorporated by
reference.)
10.13 Form of Mortgage between the Company and FFCA Mortgage
Corporation, dated December 18, 1996 (Exhibit 5 to the
Company's Schedule 14D-9, filed with the Commission on March
19, 1997 is hereby incorporated by reference.)
10.14 Form of Mortgage between the Company and FFCA Mortgage
Corporation, dated March 18, 1996. (Exhibit 10.22 to the
Company's Annual Report on Form 10-K, filed with the
Commission on April 1, 1997 is hereby incorporated by
reference.)
10.15 Lease agreement dated January 29, 1998 between the Company
and Excel Realty Trust, Inc. (Exhibit 10.19 to the Company's
Annual Report on Form 10-K, filed with the Commission on
March 31, 1998 is hereby incorporated by reference.)
10.16 Commitment for construction financing for two restaurants
from FFCA Acquisition Corporation, dated October 2, 1998.
(Exhibit 10.02 to the Company's Quarterly Report on Form 10-Q
filed with the commission on November 16, 1998 is
incorporated herein by reference.)
10.17 Lease between the Company and Stuart S. Golding Company dated
February 3, 1999. (Exhibit 10.23 to the Company's Annual
Report on Form 10-K, filed with the Commission on March 24,
1999 is hereby incorporated by reference).
10.18 Employment Agreement between the Company and Lewis E.
Christman, Jr., dated as of January 26, 1998.
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(Exhibit 10.17 to the Company's Annual Report on Form 10-K,
filed with the Commission on March 31, 1998 is hereby
incorporated by reference).
10.19 Amendment of Franchise Agreement between the Company and
Ryan's Family Steak Houses, Inc. dated August 31, 1999.
10.20 Stock option agreement between the Company and director Jay
Conzen, dated November 3, 1999.
13.01 1999 Annual Report to Shareholders.
21.01 Subsidiaries of the Company.
23.01 Consent of Independent Certified Public Accountants -
Deloitte & Touche LLP.
27.00 Financial data schedules (electronic filing only).
(b) None.
(c) See (a)3. above for a list of all exhibits filed herewith and the Exhibit
Index.
(d) None.
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Annual Report of Family
Steak Houses of Florida, Inc. on Form 10-K of our report dated February 18,
2000, appearing in the 1999 Annual Report to Shareholders of Family Steak
Houses of Florida, Inc.
We additionally consent to the incorporation by reference in Registration
Statement No. 33-11684 pertaining to the 1986 Employee Incentive Stock Option
Plan of Family Steak Houses of Florida, Inc. on Form S-8 of our report dated
February 18, 2000 appearing in and incorporated by reference in this Annual
Report on Form 10-K of Family Steak Houses of Florida, Inc. for the year ended
December 29, 1999.
We further consent to the incorporation by reference in Registration Statement
No. 33-12556 pertaining to the 1986 Stock Option Plan for Non-Employee
Directors of Family Steak Houses of Florida, Inc. on Form S-8 of our report
dated February 18, 2000 appearing in and incorporated by reference in this
Annual Report on Form 10-K of Family Steak Houses of Florida, Inc. for the year
ended December 29, 1999.
We further consent to the incorporation by reference in Registration Statement
No. 33-62101 pertaining to the 1995 Long Term Incentive Plan of Family Steak
Houses of Florida, Inc. on Form S-8 of our report dated February 18, 2000
appearing in and incorporated by reference in this Annual Report on Form 10-K
of Family Steak Houses of Florida, Inc. for the year ended December 29, 1999.
Deloitte & Touche LLP
Certified Public Accountants
Jacksonville, Florida
March 15, 2000
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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.
FAMILY STEAK HOUSES OF FLORIDA, INC.
Date: March 9, 2000 BY: /s/ Glen F. Ceiley
------------------
Glen F. Ceiley
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant in
the capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Edward B. Alexander Executive Vice President March 13, 2000
- ----------------------- (Principal Financial and
Edward B. Alexander Accounting Officer)
/s/ Glen F. Ceiley Chairman of the Board March 9, 2000
- ------------------
Glen F. Ceiley
/s/ Steve Catanzaro Director March 9, 2000
- -------------------
Steve Catanzaro
/s/ Jay Conzen Director March 13, 2000
- --------------
Jay Conzen
/s/ William Means Director March 9, 2000
- -----------------
William Means
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