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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED OCTOBER 15, 2001 OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________________ TO _________________
COMMISSION FILE NUMBER 0-14837
ELMER'S RESTAURANTS, INC.
-------------------------
(Exact name of registrant as specified in its charter)
OREGON 93-0836824
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
_____________
11802 S.E. Stark St.
Portland, Oregon 97216 (503) 252-1485
---------------- ----- --------------
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE) (REGISTRANT'S TELEPHONE NUMBER,
OFFICES) INCLUDING AREA CODE)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
_____________
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]
Number of shares of Common Stock outstanding at November 29, 2001: 1,960,032
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ELMER'S RESTAURANTS, INC.
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INDEX
PAGE
NUMBER
------
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements 3
Condensed Consolidated Balance Sheets,
October 15, 2001 (Unaudited) and
April 2, 2001
Condensed Consolidated Statements of Income, 4
12 and 28 weeks ended October 15, 2001 (Unaudited) and
October 16, 2000 (Unaudited)
Condensed Consolidated Statements of Cash Flows, 5
28 weeks ended October 15, 2001 (Unaudited) and October
16, 2000 (Unaudited)
Notes to Condensed Consolidated Financial Statements 6
(Unaudited)
Item 2. Management's Discussion and Analysis of Financial 6-9
Statements (Unaudited)
Item 3. Quantitative and Qualitative Disclosures about Market 10
Risk
PART II: OTHER INFORMATION AND SIGNATURES
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
2
ITEM 1
ELMER'S RESTAURANTS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 15, 2001 April 2, 2001
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 889,823 $ 1,141,016
Marketable securities 802,901 --
Accounts receivable 172,820 337,266
Notes receivable - related parties, current portion 302,041 180,213
Inventories 407,027 368,059
Prepaid expenses and other 210,886 237,681
Income taxes receivable 116,231 61,625
----------- -----------
Total current assets 2,901,729 2,325,860
Notes receivable - related parties, net of current portion 137,907 203,045
Property, buildings and equipment, net 7,857,709 8,441,867
Intangible assets, net of accumulated amortization of $362,244
and $241,925 5,332,052 5,280,714
Other assets 92,297 122,661
----------- -----------
Total assets $16,321,694 $16,374,147
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable, current portion $ 259,485 $ 569,327
Accounts payable 1,204,045 1,389,195
Accrued expenses 191,845 209,821
Accrued payroll and related taxes 575,170 390,825
----------- -----------
Total current liabilities 2,230,545 2,559,168
Notes payable, net of current portion 5,513,248 5,798,769
Deferred income taxes 772,000 772,000
----------- -----------
Total liabilities 8,515,793 9,129,937
----------- -----------
Commitments and contingencies
Shareholders' equity
Common stock, no par value; 10,000,000 shares authorized,
1,960,032 and 1,962,032 shares issued and outstanding at
October 15, and April 2, 2001 respectively 6,861,790 6,871,190
Retained earnings 944,111 373,020
----------- -----------
Total shareholders' equity 7,805,901 7,244,210
----------- -----------
Total liabilities and shareholders' equity $16,321,694 $16,374,147
=========== ===========
The accompanying notes are an integral part of the condensed consolidated financial statements.
3
ELMER'S RESTAURANTS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the twenty-eight weeks ended For the twelve weeks ended
----------------------------------- -----------------------------------
October 15, October 16, October 15, October 16,
2001 2000 2001 2000
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES $ 18,461,381 $ 12,689,513 $ 8,193,871 $ 5,458,374
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Cost of restaurant sales:
Food and beverage 5,250,563 3,549,660 2,331,362 1,506,474
Labor and related costs 5,929,603 3,970,968 2,500,926 1,676,977
Occupancy costs 1,134,720 703,875 507,589 305,571
Depreciation and amortization 391,888 358,749 173,390 159,512
Restaurant opening and closing expenses 68,338 29,967 27,958 29,967
General and administrative expenses 4,553,839 2,957,229 2,148,691 1,266,163
------------ ------------ ------------ ------------
17,328,951 11,570,448 7,689,916 4,944,664
------------ ------------ ------------ ------------
INCOME FROM OPERATIONS 1,132,430 1,119,065 503,955 513,710
OTHER INCOME (EXPENSE):
Interest income 57,832 79,142 23,866 27,548
Interest expense (314,319) (300,945) (132,461) (113,628)
Loss on disposition of assets (4,047) -- (4,047) --
------------ ------------ ------------ ------------
Income before provision for income taxes 871,896 897,262 391,313 427,630
Income tax provision (300,804) (309,556) (135,008) (148,041)
------------ ------------ ------------ ------------
Net Income $ 571,092 $ 587,706 $ 256,305 $ 279,589
============ ============ ============ ============
PER SHARE DATA:
Net income per share - Basic $ 0.29 $ 0.32 $ 0.13 $ 0.15
============ ============ ============ ============
Weighted average number of
common shares outstanding - Basic 1,961,646 1,832,032 1,961,646 1,832,032
============ ============ ============ ============
Net income per share - Diluted $ 0.29 $ 0.31 $ 0.13 $ 0.15
------------ ------------ ------------ ------------
Weighted average number of
common shares outstanding - Diluted 1,985,659 1,885,588 1,985,659 1,885,588
============ ============ ============ ============
The accompanying notes are an integral part of the condensed consolidated financial statements.
4
ELMER'S RESTAURANTS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the twenty eight weeks ended
---------------------------------
October 15, October 16,
2001 2000
----------- -----------
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net income $ 571,092 $ 587,706
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 391,888 358,749
Changes in assets and liabilities:
Current assets 152,274 --
Other assets 30,364 (153,198)
Accounts payable and accrued expenses (18,781) (5,724)
Income taxes (54,606) (248,127)
----------- -----------
Net cash provided by operating activities 1,072,231 539,406
----------- -----------
Cash flows from investing activities:
Net investment in maketable securities (802,901) --
Additions to property, buildings and equipment (720,009) (835,081)
Proceeds from sale of assets 912,279 --
Additions to intangible assets (51,340) (236,521)
Issuance of note receivable (76,668) --
Principal collected on note receivables 19,978 --
----------- -----------
Net cash used in investing activities (718,661) (1,071,602)
----------- -----------
Cash flows from financing activities:
Repurchase of common stock (9,400) --
Issuance of ten year term notes 2,806,944 --
Retirement of term debt (3,224,865) --
Change in revolver balance 200,000
Payments on notes payable (177,442) (261,875)
----------- -----------
Net cash used in financing activities (604,763) (61,875)
----------- -----------
Net decrease in cash and cash equivalents (251,193) (594,071)
Cash and cash equivalents, beginning of period 1,141,016 1,640,210
----------- -----------
Cash and cash equivalents, end of period $ 889,823 $ 1,046,139
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 314,319 $ 300,945
=========== ===========
Income taxes $ 361,541 $ 557,683
=========== ===========
The accompanying notes are an integral part of the condensed consolidated financial statements.
5
ELMER'S RESTAURANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with the instructions to form 10-Q and Rule 10-01 of Regulation S-X.
These interim financial statements do not include all the information and
footnotes necessary for a fair presentation of financial position and results of
operations and cash flows in conformity with generally accepted accounting
principles in the United States of America. These condensed financial statements
should be read in conjunction with the financial statements and related notes
contained in the Company's Annual Report on Form 10-K for the year ended April
2, 2001. Operating results reflected in the interim consolidated financial
statements are not necessarily indicative of the results that may be expected
for the year ended April 1, 2002.
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments (consisting solely of normal recurring adjustments)
necessary to present fairly the financial position of the Company and its
subsidiaries, and their results of operations and cash flows.
In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS No. 141 requires business combinations initiated after June 30,
2001, to be accounted for using the purchase method of accounting, and broadens
the criteria for recording intangible assets separate from goodwill. Recorded
goodwill and intangibles will be evaluated against this new criteria and may
result in certain intangibles being subsumed into goodwill, or alternatively,
amounts initially recorded as goodwill may be separately identified and
recognized apart from goodwill. Management does not believe that adoption of
SFAS No. 141 will have a material effect on the condensed consolidated financial
statements. SFAS No. 142 requires the use of a nonamortization approach to
account for purchased goodwill and certain intangibles. Under a nonamortization
approach, goodwill and certain intangibles (those deemed to have indefinite
life) will not be amortized into results of operations, but instead will be
reviewed for impairment and written down and charged to results of operations
only in the periods in which the recorded value of goodwill and certain
intangibles are determined to be more than their fair value.
The Company has adopted the provisions of SFAS No. 142 beginning April 3, 2001.
These standards only permit prospective application of the new accounting;
accordingly adoption of these standards will not affect previously reported
financial information. The principal effect of implementing SFAS No. 142 was the
cessation of the amortization of goodwill in the current period; however,
impairment reviews may result in future write-downs. Any impairment losses for
goodwill and certain intangibles that arise from the initial application of the
SFAS will be reported as a cumulative effect of a change in accounting
principle. The Company has not determined the effect of the initial application
at this time. Goodwill amortization in the previous comparable 28-week period
amounted to $83,300 or $.04 per diluted share.
All net income per share amounts and weighted average number of common shares
outstanding have been retroactively adjusted to reflect a 10% stock dividend,
which had a record date in August 2000.
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Elmer's Restaurants, Inc. (the "Company" or "Elmer's") (NASDAQ Small Cap Market
symbol: ELMS), located in Portland, Oregon, is a franchisor and operator of
full-service, family oriented restaurants under the names "Elmer's Breakfast.
Lunch. Dinner." and "Mitzel's American Kitchen" and an operator of delicatessen
restaurants under the names "Ashley's" and "Richard's Deli and Pub." The Company
is an Oregon corporation
6
and was incorporated in 1983. Walter Elmer opened the first Elmer's restaurant
in Portland, Oregon in 1960, and the first franchised restaurant opened in 1966.
The Company acquired the Elmer's franchising operation in January 1984 from the
Elmer family.
The Company's Gresham, Oregon franchisee exercised their option to purchase the
land and building leased from the Company on October 7, 2001. The Company's
newest franchised location opened in Woodburn, Oregon in September 2001.
The Company franchises or operates a total of 37 full-service, family-oriented
restaurants, with a warm, friendly atmosphere and comfortable furnishings. Most
of the restaurants are decorated in a home style, with fireplaces in the dining
rooms. The restaurants are primarily freestanding buildings, ranging in size
from 4,600 to approximately 9,000 square feet with seating capacities ranging
from 120 to 220. A portion of the dining room in most restaurants may also be
used for private group meetings by closing it off from the public dining areas.
The menu offers an extensive selection of items for breakfast, lunch and dinner.
The Elmer's breakfast menu, which is available all day, contains a wide variety
of selections with particular emphasis on pancakes, waffles, omelets, crepes,
country platters and other popular breakfast items.
HIGHLIGHTS OF HISTORICAL RESULTS. The Company reported net income of $256,305
and $571,092 or $.13 and $.29 in basic earnings per share for the 12 and 28 week
period ended October 15, 2001. These results are compared to reported net income
of $279,589 and $587,706, or $.15 and $.32 per share for the 12 and 28 week
period ended October 16, 2000. The approximately $23,000 and $17,000 decreases
in net income for the 12 and 28 weeks ended October 15, 2001are largely
attributable to higher general and administrative expenses, including sharply
higher energy costs. The Company's total assets as of October 15, 2001 were
$16.3 million, which is a decrease of approximately $52,000 over total assets as
of April 2, 2001. In the 28 weeks ended October 15, 2001, working capital
increased approximately $904,000 while notes payable (net of current portion)
decreased $286,000. Cash provided by operating activities totaled $1,072,231 for
the 28 weeks ended October 15, 2001 compared to $539,406 for the 28 weeks ended
October 16, 2000. The increase in cash provided from operations is substantially
attributable to the timing of quarterly tax payments and to decreases in current
and other assets.
COMPARISON OF RESULTS OF OPERATIONS. The following discussion and analysis
presents the Company's results of operations for the 12 and 28 weeks ended
October 15, 2001 and the 12 and 28 weeks ending October 16, 2000 respectively.
For the 12 and 28 week periods ended October 15, 2001, the Company's net income
declined 8% and 3% from net income for the comparable periods in 2000. Net
income as a percentage of total revenue decreased from 5.1% and 4.6% for the 12
and 28 week period ended October 16, 2000, to 3.1% for both the 12 and 28 weeks
ended October 15, 2001.
RESULTS OF OPERATIONS RESULTS OF OPERATIONS
Dollar amounts in thousands except per share data FOR THE 28 WEEKS ENDED FOR THE 28 WEEKS ENDED
OCTOBER 15, 2001 OCTOBER 16, 2000
---------------- ----------------
Percent of Percent of
Amount Revenues Amount Revenues
------ -------- ------ --------
Revenues $18,461 100.0% $12,690 100.0%
Restaurant costs and expenses 12,775 69.2 8,613 67.9
General and administrative expenses 4,554 24.7 2,957 23.3
Operating income 1,132 6.1 1,119 8.8
Non operating income (expense) (261) (1.4) (222) (1.7)
Net income 571 3.1 588 4.6
Basic earnings per share $0.29 $0.32
7
REVENUES. Revenues for the 12 and 28 weeks ended October 15, 2001 were 50.1% and
45.5% greater, respectively, than the comparable period in 2000, reflecting the
additional six operating restaurants in the current year. Revenues from same
store restaurant operations showed an increase of 1.8% and .5% for the 12 and 28
weeks ended October 15, 2001 over the comparable period in 2000. The company has
however, seen a shift to lower margin items.
REVENUES REVENUES
Dollar amounts in thousands FOR THE 28 WEEKS ENDED FOR THE 28 WEEKS ENDED
OCTOBER 15, 2001 OCTOBER 16, 2000
Percent of Percent of
Amount Revenues Amount Revenues
------ -------- ------ --------
Restaurant operations:
Restaurant sales $16,060 87.0% $10,486 82.6%
Lottery 1,835 9.9 1,786 14.1
------- ---- ------- ----
17,895 96.9 12,272 96.7
Franchise operations 566 3.1 418 3.3
------- ---- ------- ----
Total revenue $18,461 100.0% $12,690 100.0%
======= ====== ======= ======
RESTAURANT COSTS AND EXPENSES. Restaurant costs and expenses, which consists of
five categories including food, beverage and supply costs, labor and labor
related costs, occupancy costs, and depreciation and amortization, and
restaurant pre-opening expenses increased to 67.6% and 69.2% of revenue for the
12 and 28 weeks ended October 15, 2001, respectively, compared to 67.4% and 67.9
for the 12 and 28 weeks ended October 16, 2000. Food, beverage and supply costs
as a percentage of total revenues were 28.5% and 28.4% for the 12 and 28 weeks
ended October 15, 2001 compared to 27.6% and 28.0% for the comparable period in
2000. Labor expenses totaled 30.5% and 32.1% of revenues for the 12 and 28 weeks
ended October 15, 2001 compared to 30.7% and 31.3% of revenues for the 12 and 28
weeks ended October 16, 2000. Occupancy costs as a percentage of revenues
increased from 5.6% and 5.5% for the 12 and 28 weeks ended October 16, 2000 to
6.2% and 6.1% for the 12 and 28 weeks ended October 15, 2001. Due to the
elimination of amortization expense pursuant to the adoption of SFAS No. 142.,
depreciation and amortization expense as a percentage of revenues dropped from
2.9% and 2.8% for the 12 and 28 weeks ended October 16, 2000 to 2.1% for both
the 12 and 28 weeks ended October 15, 2001
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative ("G&A") expenses
were 26.2% and 24.7% of total revenue for the 12 and 28 weeks ended October 15,
2001 compared to 23.2% and 23.3% of revenues in the comparable period in 2000.
G&A expense has increased as a result of higher energy costs, implementation
costs for a upgraded accounting package and other support costs.
NON-OPERATING EXPENSE. Non-operating expense was 1.4% of total revenues for both
the 12 and 28 weeks ended October 15, 2001 compared to 1.6% and 1.7% of total
revenues in the comparable period in 2000.
LIQUIDITY AND CAPITAL RESOURCES. As of October 15, 2001, the Company had cash
and equivalents of approximately $890,000 representing a decrease from April 2,
2001 of approximately $251,000. The decrease resulted from cash used to acquire
and remodel the new Roseburg Elmer's, as well as the investment of excess
working capital in marketable securities. Cash used by financing activities was
approximately $605,000 including $435,000 used to retire the mortgage on the
Gresham property. Cash used in investing activities was approximately $719,000,
principally for the acquisition and remodel of the Roseburg property. Proceeds
from the sale of the Gresham property were largely offset by investments in
marketable securities and notes receivable.
8
The Company repurchased 2000 shares of its common stock during the quarter.
These purchases were made in the NASDAQ market through the Company's broker. The
board of directors has authorized the Company to repurchase shares valued, in
aggregate, at less than $300,000. This authorization is ongoing and the Company
may from time to time make additional purchases.
The Company's primary liquidity needs arise from debt service on indebtedness,
operating lease requirements and the funding of capital expenditures. The
Company's primary source of liquidity during the year was the operation of its
restaurants, franchise fees earned from its franchisees, cash on hand, and
borrowings. As of October 15, 2001, the Company had outstanding indebtedness of
$2.8 million with GE Capital, $1.7 million in real estate debt with Wells Fargo
and $1.3 million in convertible notes.
The GE Capital loan was originated in June 2001 with proceeds used to retire
(without penalty) approximately $1.55 million in Wells Fargo term debt and $1.25
million in a term loan facility with Eagles View Management. The GE Capital loan
fully amortizes over ten years, $1.80 million of the loan has a fixed interest
rate of 8.95%. Interest is variable at 385 basis points over 30 day commercial
paper (currently approximately 5.9%) on the remaining $1.00 million portion of
the note. The variable portion of the note can be fixed (385 basis points above
five-year treasuries) without penalty within the first two years. In addition,
GE Capital has provided the Company with an option for up to $1.5 million of
additional financing over the next year on similar terms for the Company's
growth purposes. No amounts had been drawn on the $1.5 million facility as of
October 15, 2001. The loan is collateralized by substantially all of the assets
owned by Elmer's Restaurants, Inc. (except for real estate assets).
The remaining Wells Fargo real estate debt has a weighted-average maturity of
eight years, bears interest at an average of 8.18%, requires monthly payments of
principal and interest, and is collateralized by three real estate properties.
The $1.3 million of convertible notes have a remaining maturity of approximately
six years, bear interest at 10%, requires monthly interest-only payments,
straight line principal amortization into a Company-held sinking fund, and are
subordinated to the other Company funded debt. The notes include a convertible
feature that permits the holder to convert the principal of the note into common
stock at any time at $6.50 per share.
Certain of the Company's debt agreements require compliance with debt covenants.
The most restrictive covenants require the Company to maintain a maximum ratio
of total liabilities, excluding subordinated debt, to tangible net worth plus
subordinated debt of 3.25 to 1.0, and a ratio of cash generation (defined as net
income before taxes, interest expense, depreciation and amortization) to total
interest expense plus the prior period current maturities of long-term debt of
at least 2.25 to 1.0. Management believes that the Company is in compliance with
such requirements.
Elmer's Restaurants, Inc., like most restaurant businesses, is able to operate
with nominal or deficit working capital because sales are for cash and inventory
turnover is rapid. Renovation and/or remodeling of existing restaurants is
either funded directly from available cash or, in some instances, is financed
through outside lenders. Construction or acquisition of new restaurants is
generally, although not always, financed by outside lenders.
The Company believes that it will continue to be able to obtain adequate
financing on acceptable terms for new restaurant construction and acquisitions
and that cash generated from operations will be adequate to meet its financial
needs and to pay operating expenses for the foreseeable future, although no
assurances can be given.
9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS:
Certain statements in this form 10-Q constitute "forward-looking statements"
which we believe are reasonable and within the meaning of the Securities Act of
1933, as amended and the Securities Exchange Act of 1934, as amended. Such
forward-looking statements involve known and unknown risks, uncertainties, and
other factors relating to the Company's business, financial condition, and
operations which may cause the actual results, performance, or achievements of
Elmer's Restaurants, Inc. (individually and collectively with its subsidiaries,
herein the "Company") to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: general economic
and business conditions; the ability to accomplish stated goals and objectives;
successful integration of acquisitions; the impact of competitive products and
pricing; success of operating initiatives; development and operating costs;
advertising and promotional efforts; adverse publicity; acceptance of new
product offerings; consumer trial and frequency; availability, locations, and
terms of sites for restaurant development; changes in business strategy or
development plans; changes in regulations effecting lottery commissions; quality
of management; availability, terms and deployment of capital; the results of
financing efforts; business abilities and judgment of personnel; availability of
qualified personnel; food, labor and employee benefit costs; changes in, or the
failure to comply with, government regulations; continued NASDAQ listing;
weather conditions; construction and remodeling schedules; and other factors
referenced in this Form 10-Q.
The Company invests excess cash beyond its working capital requirements in
liquid marketable securities. These securities include corporate and government
bond mutual funds focusing on issues with medium and short term maturities.
Certain of the Company's outstanding financial instruments are subject to market
risks, including interest rate risk. Such financial instruments are not
currently subject to foreign currency risk or commodity price risk. The
Company's major market risk exposure is potential loss arising from changing
interest rates and the impact of such changes on its long-term debt. Of the
Company's long-term debt outstanding at July 23, 2001, $1,000,000 principal
amount was accruing interest at a variable rate of 3.85% over 30 day Commercial
Paper. A rise in prevailing interest rates could have adverse effects on the
Company's financial condition and results of operations. The fair value of
financial instruments approximate the book value at October 15, 2001.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On August 8, 2001, at the Company's Annual Meeting, the holders of the Company's
outstanding Common Stock took the action described below. At August 8, 2001,
1,962,032 shares of Common Stock were issued and outstanding and eligible to
vote at the Annual Meeting.
10
Proposal I: Election of Directors.
------------------------------------------
The shareholders elected Thomas Connor and Corydon Jensen to the Company's Board
of Directors for a three- year term expiring at the year 2004 annual meeting of
Shareholder by the votes indicated below.
Thomas Connor 1,580,427 shares in favor 16,925 shares against or withheld
Corydon Jensen 1,580,397 shares in favor 16,925 shares against or withheld
Propoasl II: Approval to increase the number of shares available for
--------------------------------------------------------------------
distribution under the Company's 1999 stock option plan
-------------------------------------------------------
1,260,860 shares in favor 115,407 shares against or withheld
Proposal III: Ratification and Approval of Appointment of Moss Adams, LLP as
----------------------------------------------------------------------------
Independent Public Accountants for the fiscal year ended April 2, 2001
----------------------------------------------------------------------
1,596,011 shares in favor 1,341 shares against or withheld
Each Director whose term continued after the meeting:
Director Term Expires
William Service 2003
Bruce Davis 2002
Richard Williams 2002
Donald Woolley 2002
Corydon Jensen 2004
Thomas Connor 2004
ITEM 5. OTHER INFORMATION
In accordance with amendments adopted on May 21, 1998 to Rule 14a-4 under the
Securities and Exchange Act of 1934, if notice of a shareholder proposal to be
raised at the annual meeting of shareholders is received at the principal
executive offices of the Company after May 15, 2002 (45 days prior to the month
and date in 2001 corresponding to the date on which the Company mailed its proxy
materials for the 2001 annual meeting), proxy voting on that proposal when and
if raised at the 2002 annual meeting will be subject to the discretionary voting
authority of the designated proxy holders. Any shareholder proposal to be
considered for inclusion in proxy materials for the Company's 2002 annual
meeting must be received at the principal executive office of the Company no
later than May 15, 2002.
August 9, 2000 the board of directors approved a 10% stock dividend payable to
shareholders of record as of August 18, 2000. The board directed that the
dividend be paid on September 15, 2000 and that no consideration for fractional
shares be issued or paid.
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K
a) Exhibits:
Exhibits required to be attached by Item 601 of Regulation
S-K are listed in the Index to Exhibits of this Form
10-Q, and are incorporated herein by this reference.
b) Reports on Form 8-K:
None.
11
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, Elmer's Restaurants, Inc. has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Elmer's Restaurants, Inc.
By: /s/ WILLIAM W. SERVICE
-------------------------------
William W. Service
Chief Executive Officer
Dated: November 28, 2001
12
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
3 (i) * Restated Articles of Incorporation of the
Company (Incorporated herein by reference
from Exhibit No. 3.1 to the Company's Annual
Report on Form 10-K for the year ended March
31, 1988.)
3 (ii) * By-Laws of the Company, as amended.
(Incorporated herein by reference from
Exhibit 3.2 of the Company's Annual Report on
Form 10-K for the year ended March 31, 1990.)
13