Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - GRANITE CITY FOOD & BREWERY LTD. | a12-2618_48ka.htm |
| EX-23 - EX-23 - GRANITE CITY FOOD & BREWERY LTD. | a12-2618_4ex23.htm |
| EX-99.1 - EX-99.1 - GRANITE CITY FOOD & BREWERY LTD. | a12-2618_4ex99d1.htm |
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS OF
GRANITE CITY FOOD & BREWERY LTD.
Granite City Food & Brewery Ltd. (the “Company”) purchased substantially all the assets of the Cadillac Ranch restaurants at the Mall of America in Bloomington, Minnesota, Miami, Florida, Oxon Hill, Maryland, Annapolis, Maryland and Indianapolis, Indiana (collectively “Cadillac Ranch Restaurants”). In addition to the restaurant assets, the Company acquired certain intellectual property and assumed certain of Cadillac Ranch Restaurants’ property leases. The Company funded the purchase with cash and an expansion of its credit facility.
The following unaudited pro forma condensed combined financial information is based on the historical statements of the Company and Cadillac Ranch Restaurants and gives effect to the Company’s acquisition of substantially all the assets of Cadillac Ranch Restaurants and borrowings of $7.6 million from the Company’s credit facility.
The unaudited pro forma condensed combined consolidated balance sheet combines the Company’s and Cadillac Ranch Restaurants’ historical balance sheets at September 27, 2011 and September 30, 2011, respectively, and is presented as if the transactions had occurred on such date. The unaudited pro forma condensed combined statements of operations for the three quarters ended September 27, 2011 and the year ended December 28, 2010 combines the Company’s and Cadillac Ranch Restaurants’ historical income statements for such periods and are presented as if the transactions had occurred at the beginning of fiscal year 2010.
The total purchase price has been allocated to the assets acquired, including identifiable intangible assets, based upon the Company’s estimate of their fair values at the time of the acquisition.
The unaudited pro forma condensed combined financial information has been prepared based on assumptions deemed appropriate by the Company. The pro forma adjustments and certain assumptions are described in the accompanying notes. The unaudited pro forma condensed combined financial information is for informational purposes only and does not purport to reflect the results of operations or financial position that would have occurred if the pro forma transactions had been consummated on the dates indicated above, nor does it purport to represent the financial position or results of operation of the Company for any future periods. Future results may vary significantly from the information reflected in the following unaudited pro forma condensed combined income statements due to factors beyond control of the Company.
The unaudited pro forma condensed combined financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical consolidated financial statements and related notes of the Company in its Annual Report on Form 10-K for the year ended December 28, 2010 and its Quarterly Reports on Form 10-Q for the quarterly periods ended March 29, 2011, June 28, 2011 and September 27, 2011.
The following table summarizes the estimated fair values of net assets acquired:
|
Equipment and fixtures |
|
$ |
1,328,575 |
|
|
Leasehold improvements |
|
4,727,352 |
| |
|
Liquor licenses, other |
|
112,515 |
| |
|
Intellectual property |
|
1,538,729 |
| |
|
Purchase price |
|
$ |
7,707,171 |
|
Additionally, the Company acquired inventory valued at $139,636.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
|
|
|
September 27, 2011 |
|
September 30, 2011 |
|
|
|
|
| ||||||
|
|
|
Granite City |
|
Cadillac Ranch |
|
|
|
|
| ||||||
|
|
|
Food & Brewery Ltd. |
|
Restaurants |
|
Pro forma |
|
Pro forma |
| ||||||
|
|
|
(Historical) |
|
(Historical) |
|
Adjustments |
|
Combined |
| ||||||
|
ASSETS: |
|
|
|
|
|
|
|
|
| ||||||
|
Current assets: |
|
|
|
|
|
|
|
|
| ||||||
|
Cash and cash equivalents |
|
$ |
|
1,435,333 |
|
$ |
87,920 |
|
$ |
(1,027,556 |
)(1) (2) (3) (4) |
$ |
495,697 |
| |
|
Inventory |
|
991,330 |
|
139,636 |
|
— |
|
1,130,966 |
| ||||||
|
Prepaids and other |
|
993,530 |
|
288,058 |
|
(288,058 |
)(1) |
993,530 |
| ||||||
|
Total current assets |
|
3,420,193 |
|
515,614 |
|
(1,315,614 |
) |
2,620,193 |
| ||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Prepaid rent, net of current portion |
|
206,287 |
|
— |
|
— |
|
206,287 |
| ||||||
|
Property and equipment, net |
|
49,114,683 |
|
9,661,762 |
|
(3,605,835 |
)(5) |
55,170,610 |
| ||||||
|
Intangible and other assets |
|
1,420,563 |
|
187,812 |
|
1,463,432 |
(5) |
3,071,807 |
| ||||||
|
Total assets |
|
$ |
|
54,161,726 |
|
$ |
10,365,188 |
|
$ |
(3,458,017 |
) |
$ |
61,068,897 |
| |
|
|
|
|
|
|
|
|
|
|
| ||||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
| ||||||
|
Current liabilities: |
|
|
|
|
|
|
|
|
| ||||||
|
Accounts payable |
|
$ |
|
2,766,890 |
|
$ |
828,810 |
|
$ |
(828,810 |
)(1) |
$ |
2,766,890 |
| |
|
Accrued expenses |
|
5,184,494 |
|
988,696 |
|
(988,696 |
)(1) |
5,184,494 |
| ||||||
|
Deferred rent, current portion |
|
450,534 |
|
— |
|
— |
|
450,534 |
| ||||||
|
Deferred gain, current portion |
|
30,516 |
|
— |
|
— |
|
30,516 |
| ||||||
|
Line of credit, current portion |
|
68,210 |
|
— |
|
224,476 |
(3) |
292,686 |
| ||||||
|
Long-term debt/obligations, current portion |
|
693,757 |
|
2,415,937 |
|
(2,239,483 |
)(1) (3) |
870,211 |
| ||||||
|
Capital lease obligations, current portion |
|
706,920 |
|
— |
|
— |
|
706,920 |
| ||||||
|
Total current liabilities |
|
9,901,321 |
|
4,233,443 |
|
(3,832,513 |
) |
10,302,251 |
| ||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Deferred rent, net of current portion |
|
3,671,027 |
|
4,459,260 |
|
(4,459,260 |
)(1) |
3,671,027 |
| ||||||
|
Deferred gain, net of current portion |
|
190,724 |
|
— |
|
— |
|
190,724 |
| ||||||
|
Line of credit, net of current portion |
|
931,790 |
|
— |
|
2,382,695 |
(3) |
3,314,485 |
| ||||||
|
Long-term debt, net of current portion |
|
7,175,396 |
|
101,289 |
|
4,722,257 |
(1) (3) |
11,998,942 |
| ||||||
|
Capital lease obligations, net of current portion |
|
30,059,059 |
|
— |
|
— |
|
30,059,059 |
| ||||||
|
Total liabilities |
|
51,929,317 |
|
8,793,992 |
|
(1,186,821 |
) |
59,536,488 |
| ||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
| ||||||
|
Preferred stock, $0.01 par value, 10,000,000 shares authorized; |
|
|
|
|
|
|
|
|
| ||||||
|
3,000,000 issued and outstanding at 9/27/11 |
|
30,000 |
|
— |
|
— |
|
30,000 |
| ||||||
|
Common stock, $0.01 par value, 90,000,000 shares authorized; |
|
|
|
|
|
|
|
|
| ||||||
|
4,654,067 shares issued and outstanding at 9/27/11 |
|
46,541 |
|
— |
|
— |
|
46,541 |
| ||||||
|
Additional paid-in capital |
|
73,152,065 |
|
— |
|
— |
|
73,152,065 |
| ||||||
|
Stock dividends distributable |
|
335 |
|
— |
|
— |
|
335 |
| ||||||
|
Accumulated equity (deficit) |
|
(70,996,532 |
) |
1,571,196 |
|
(2,271,196 |
)(1) (4) |
(71,696,532 |
) | ||||||
|
Total shareholders’ equity |
|
2,232,409 |
|
1,571,196 |
|
(2,271,196 |
) |
1,532,409 |
| ||||||
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Total liabilities and shareholders’ equity |
|
$ |
54,161,726 |
|
10,365,188 |
|
$ |
|
(3,458,017 |
) |
$ |
61,068,897 |
| ||
|
(1) |
|
Reflects the following assets not acquired and liabilities and equity not assumed: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
87,920 |
|
|
|
|
Prepaids and other |
|
$ |
288,058 |
|
|
|
|
Accounts payable |
|
$ |
828,810 |
|
|
|
|
Accrued expenses |
|
$ |
988,696 |
|
|
|
|
Long-term debt/obligations, current portion |
|
$ |
2,415,937 |
|
|
|
|
Deferred rent, net of current portion |
|
$ |
4,459,260 |
|
|
|
|
Long-term debt, net of current portion |
|
$ |
101,289 |
|
|
|
|
Shareholders’ equity |
|
$ |
1,571,196 |
|
|
|
|
|
|
|
|
|
|
(2) |
|
Reflects cash paid to Cadillac Ranch: |
|
|
| |
|
|
|
Inventory |
|
$ |
139,636 |
|
|
|
|
Property and equipment, net |
|
6,055,927 |
| |
|
|
|
Intangible and other assets |
|
1,651,244 |
| |
|
|
|
|
|
$ |
7,846,807 |
|
|
|
|
|
|
|
| |
|
(3) |
|
Reflects borrowings from credit facility: |
|
|
| |
|
|
|
Line of credit |
|
$ |
2,607,171 |
|
|
|
|
Long-term debt |
|
5,000,000 |
| |
|
|
|
|
|
$ |
7,607,171 |
|
|
|
|
|
|
|
| |
|
(4) |
|
Reflects acquisition costs: |
|
$ |
700,000 |
|
|
|
|
|
|
|
| |
|
(5) |
|
Reflects the fair value of assets purchased and eliminates the book value of assets purchased |
|
|
| |
|
|
|
Property and equipment, net - fair value |
|
$ |
6,055,927 |
|
|
|
|
Intangible and other assets - fair value |
|
1,651,244 |
| |
|
|
|
Property and equipment, net - book value |
|
(9,661,762 |
) | |
|
|
|
Intangible and other assets - book value |
|
(187,812 |
) | |
|
|
|
|
|
$ |
(2,142,403 |
) |
The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDED DECEMBER 28, 2010
|
|
|
For Fiscal |
|
For Fiscal |
|
|
|
|
| ||||
|
|
|
Year 2010 |
|
Year 2010 |
|
|
|
|
| ||||
|
|
|
Granite City |
|
Cadillac Ranch |
|
|
|
|
| ||||
|
|
|
Food & Brewery Ltd. |
|
Restaurants |
|
Pro forma |
|
Pro forma |
| ||||
|
|
|
(Historical) |
|
(Historical) |
|
Adjustments |
|
Combined |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Restaurant revenue |
|
$ |
89,330,387 |
|
$ |
11,223,342 |
|
$ |
— |
|
$ |
100,553,729 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cost of sales: |
|
|
|
|
|
|
|
|
| ||||
|
Food, beverage and retail |
|
24,719,133 |
|
3,363,579 |
|
— |
|
28,082,712 |
| ||||
|
Labor |
|
30,704,676 |
|
2,391,916 |
|
— |
|
33,096,592 |
| ||||
|
Direct restaurant operating |
|
13,292,360 |
|
1,603,100 |
|
— |
|
14,895,460 |
| ||||
|
Occupancy |
|
8,355,535 |
|
1,008,623 |
|
— |
|
9,364,158 |
| ||||
|
Total cost of sales |
|
77,071,704 |
|
8,367,218 |
|
— |
|
85,438,922 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
General and administrative |
|
6,577,529 |
|
212,725 |
|
— |
|
6,790,254 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Depreciation and amortization |
|
5,956,257 |
|
634,736 |
|
(249,408 |
)(1) |
6,341,585 |
| ||||
|
Exit or disposal activities |
|
729,839 |
|
— |
|
— |
|
729,839 |
| ||||
|
Loss (gain) on disposal of assets |
|
(29,636 |
) |
— |
|
— |
|
(29,636 |
) | ||||
|
Operating income (loss) |
|
(975,306 |
) |
2,008,663 |
|
249,408 |
|
1,282,765 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest: |
|
|
|
|
|
|
|
|
| ||||
|
Income |
|
14,360 |
|
— |
|
— |
|
14,360 |
| ||||
|
Expense |
|
(3,563,816 |
) |
(268,711 |
) |
(237,831 |
)(2) |
(4,070,358 |
) | ||||
|
Net interest expense |
|
(3,549,456 |
) |
(268,711 |
) |
(237,831 |
) |
(4,055,998 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net (loss) income before income taxes |
|
(4,524,762 |
) |
1,739,952 |
|
11,577 |
|
(2,773,233 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Provision for income taxes |
|
— |
|
— |
|
— |
(3) |
— |
| ||||
|
Net (loss) income |
|
$ |
(4,524,762 |
) |
$ |
1,739,952 |
|
$ |
11,577 |
|
$ |
(2,773,233 |
) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Loss per common share, basic |
|
$ |
(0.61 |
) |
|
|
|
|
$ |
(0.38 |
) | ||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares outstanding, basic |
|
7,367,079 |
|
|
|
|
|
7,367,079 |
| ||||
|
(1) |
|
Reflect depreciation and amortization based on the fair value of assets acquired less depreciation and amortization based on book value of assets acquired: |
|
|
| |
|
|
|
Depreciation and amortization - fair value |
|
$ |
385,328 |
|
|
|
|
Depreciation and amortization - book value |
|
(634,736 |
) | |
|
|
|
|
|
$ |
(249,408 |
) |
|
|
|
|
|
|
| |
|
(2) |
|
Reflects interest expense on acquisition borrowings less interest on debt not assumed: |
|
|
| |
|
|
|
Interest - acquisition borrowings |
|
$ |
506,542 |
|
|
|
|
Interest - debt not assumed |
|
(268,711 |
) | |
|
|
|
|
|
$ |
237,831 |
|
|
|
|
|
|
|
| |
|
(3) |
|
Reflects the income tax calculated on the additional income from Cadillac Ranch which would be offset by the recognition of Granite City’s deferred tax assets (net operating losses) that have been reserved by a valuation allowance. | ||||
The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE THREE QUARTERS ENDED SEPTEMBER 27, 2011
|
|
|
For Three Quarters |
|
For Three Quarters |
|
|
|
|
| ||||||||||
|
|
|
Ended 9/27/11 |
|
Ended 9/30/11 |
|
|
|
|
| ||||||||||
|
|
|
Granite City |
|
Cadillac Ranch |
|
|
|
|
| ||||||||||
|
|
|
Food & Brewery Ltd. |
|
Restaurants |
|
Pro forma |
|
Pro forma |
| ||||||||||
|
|
|
(Historical) |
|
(Historical) |
|
Adjustments |
|
Combined |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
Restaurant revenue |
|
$ |
|
70,072,350 |
|
$ |
13,311,806 |
|
$ |
— |
|
$ |
83,384,156 |
| |||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
Cost of sales: |
|
|
|
|
|
|
|
|
| ||||||||||
|
Food, beverage and retail |
|
19,048,008 |
|
4,230,618 |
|
— |
|
23,278,626 |
| ||||||||||
|
Labor |
|
23,983,390 |
|
2,875,322 |
|
— |
|
26,858,712 |
| ||||||||||
|
Direct restaurant operating |
|
10,410,292 |
|
1,819,377 |
|
— |
|
12,229,669 |
| ||||||||||
|
Occupancy |
|
5,250,643 |
|
1,388,386 |
|
— |
|
6,639,029 |
| ||||||||||
|
Total cost of sales |
|
58,692,333 |
|
10,313,703 |
|
— |
|
69,006,036 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
Pre-opening |
|
6,608 |
|
— |
|
— |
|
6,608 |
| ||||||||||
|
General and administrative |
|
5,736,591 |
|
720,500 |
|
— |
|
6,457,091 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
Depreciation and amortization |
|
4,526,246 |
|
809,777 |
|
(331,253 |
)(1) |
5,004,770 |
| ||||||||||
|
Exit or disposal activities |
|
(156,900 |
) |
— |
|
— |
|
(156,900 |
) | ||||||||||
|
Gain on disposal of assets |
|
(34,619 |
) |
— |
|
— |
|
(34,619 |
) | ||||||||||
|
Operating income (loss) |
|
1,302,091 |
|
1,467,826 |
|
331,253 |
|
3,101,170 |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
Interest: |
|
|
|
|
|
|
|
|
| ||||||||||
|
Income |
|
4,197 |
|
— |
|
— |
|
4,197 |
| ||||||||||
|
Expense |
|
(2,824,059 |
) |
(566,084 |
) |
201,555 |
(2) |
(3,188,588 |
) | ||||||||||
|
Net interest expense |
|
(2,819,862 |
) |
(566,084 |
) |
201,555 |
|
(3,184,391 |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
Net (loss) income before income taxes |
|
(1,517,771 |
) |
901,742 |
|
532,808 |
|
(83,221 |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
Provision for income taxes |
|
— |
|
— |
|
85,000 |
(3) |
85,000 |
| ||||||||||
|
Net (loss) income |
|
$ |
(1,517,771 |
) |
$ |
|
901,742 |
|
$ |
447,808 |
|
$ |
(168,221 |
) | |||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
Loss per common share, basic |
|
$ |
(1.39 |
) |
|
|
|
|
$ |
(1.17 |
) | ||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
Weighted average shares outstanding, basic |
|
5,961,102 |
|
|
|
|
|
5,961,102 |
| ||||||||||
|
(1) |
|
Reflect depreciation and amortization based on the fair value of assets acquired less depreciation and amortization based on book value of assets acquired: |
|
|
| |
|
|
|
Depreciation and amortization - fair value |
|
$ |
478,524 |
|
|
|
|
Depreciation and amortization - book value |
|
(809,777 |
) | |
|
|
|
|
|
$ |
(331,253 |
) |
|
|
|
|
|
|
| |
|
(2) |
|
Reflects interest expense on acquisition borrowings less interest on debt not assumed: |
|
|
| |
|
|
|
Interest - acquisition borrowings |
|
$ |
364,529 |
|
|
|
|
Interest - debt not assumed |
|
(566,084 |
) | |
|
|
|
|
|
$ |
(201,555 |
) |
|
|
|
|
|
|
| |
|
(3) |
|
Reflects the income tax calculated on the additional income from Cadillac Ranch which would be partially offset by the recognition of Granite City’s deferred tax assets (net operating losses) that have been reserved by a valuation allowance. The net operating losses recognized are subject to an IRC Section 382 limitation and are therefore unavailable to offset the entire tax liability. This reflects taxes at an assumed rate of 37.8 percent. | ||||
The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.