Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 02, 2021 | Feb. 22, 2021 | |
Document And Entity Information | ||
Entity Registrant Name | FLANIGANS ENTERPRISES INC | |
Entity Central Index Key | 0000012040 | |
Document Type | 10-Q | |
Document Period End Date | Jan. 2, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-03 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 1,858,647 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Incorporation State Country Code | FL | |
Entity File Number | 1-6836 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
REVENUES: | ||
Restaurant food sales | $ 18,328 | $ 18,742 |
Restaurant bar sales | 4,443 | 5,891 |
Package store sales | 8,011 | 5,707 |
Franchise related revenues | 386 | 360 |
Rental income | 187 | 194 |
Other operating income | 25 | 47 |
Total | 31,380 | 30,941 |
Cost of merchandise sold: | ||
Restaurant and lounges | 7,522 | 8,424 |
Package goods | 5,851 | 4,139 |
Payroll and related costs | 9,463 | 9,517 |
Occupancy costs | 1,806 | 1,857 |
Selling, general and administrative expenses | 5,468 | 5,773 |
Total | 30,110 | 29,710 |
Income from Operations | 1,270 | 1,231 |
OTHER INCOME (EXPENSE): | ||
Interest expense | (279) | (204) |
Interest and other income | 12 | 12 |
Gain on sale of property and equipment | 25 | |
Total other income (expense) | (242) | (192) |
Income before Benefit (Provision) for Income Taxes | 1,028 | 1,039 |
Benefit (Provision) for Income Taxes | 4 | (118) |
Net Income | 1,032 | 921 |
Less: Net income attributable to noncontrolling interests | (252) | (427) |
Net income attributable to Flanigan's Enterprises, Inc. stockholders | $ 780 | $ 494 |
Net Income Per Common Share: | ||
Basic and Diluted | $ 0.42 | $ 0.27 |
Weighted Average Shares and Equivalent Shares Outstanding: | ||
Basic and Diluted | 1,858,647 | 1,858,647 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Jan. 02, 2021 | Oct. 03, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 31,028 | $ 29,922 |
Prepaid income taxes | 27 | 74 |
Other receivables | 520 | 681 |
Inventories | 3,763 | 3,624 |
Prepaid expenses | 2,685 | 2,207 |
Total Current Assets | 38,023 | 36,508 |
Property and Equipment, Net | 45,747 | 46,003 |
Construction in progress | 1,577 | 981 |
Total Property, Equipment and Construction in Progress | 47,324 | 46,984 |
Right-of-use assets, finance leases | 4,630 | 4,749 |
Right-of-use assets, operating leases | 21,406 | 22,150 |
Total Right-of-use asset | 26,036 | 26,899 |
Investment in Limited Partnership | 852 | 621 |
OTHER ASSETS: | ||
Liquor licenses | 630 | 630 |
Deferred tax assets | 403 | 352 |
Leasehold interests, net | 178 | 200 |
Other | 561 | 290 |
Total Other Assets | 1,772 | 1,472 |
Total Assets | 114,007 | 112,484 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 11,062 | 9,238 |
Due to franchisees | 3,111 | 3,142 |
Current portion of long-term debt | 7,330 | 5,094 |
Finance lease liability, current | 4,778 | 4,772 |
Operating lease liability, current | 1,936 | 3,116 |
Total Current Liabilities | 28,217 | 25,362 |
Long Term Debt, Net of Current Portion | 19,574 | 21,229 |
Operating lease liabilities, non-current | 19,870 | 20,337 |
Total Liabilities | 67,661 | 66,928 |
Flanigan's Enterprises, Inc. Stockholders' Equity | ||
Common stock, $.10 par value, 5,000,000 shares authorized; 4,197,642 shares issued | 420 | 420 |
Capital in excess of par value | 6,240 | 6,240 |
Retained earnings | 39,628 | 38,848 |
Treasury stock, at cost, 2,338,995 shares at January 2, 2021 and 2,338,995 shares at October 3, 2020 | (6,077) | (6,077) |
Total Flanigan's Enterprises, Inc. stockholders' equity | 40,211 | 39,431 |
Noncontrolling interests | 6,135 | 6,125 |
Total equity | 46,346 | 45,556 |
Total liabilities and equity | $ 114,007 | $ 112,484 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jan. 02, 2021 | Oct. 03, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, shares issued | 4,197,642 | 4,197,642 |
Treasury stock, shares, at cost | 2,338,995 | 2,338,995 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Capital in Excess of Par Value [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Noncontrolling Interests [Member] | Total |
Balance, beginning at Sep. 28, 2019 | $ 420 | $ 6,240 | $ 37,738 | $ (6,077) | $ 6,208 | $ 44,529 |
Balance, shares, beginning at Sep. 28, 2019 | 4,197,642 | 2,338,995 | ||||
Net income | 494 | 427 | 921 | |||
Distributions to noncontrolling interests | (432) | (432) | ||||
Balance, ending at Dec. 28, 2019 | $ 420 | 6,240 | 38,232 | $ (6,077) | 6,203 | 45,018 |
Balance, shares, ending at Dec. 28, 2019 | 4,197,642 | 2,338,995 | ||||
Balance, beginning at Oct. 03, 2020 | $ 420 | 6,240 | 38,848 | $ (6,077) | 6,125 | 45,556 |
Balance, shares, beginning at Oct. 03, 2020 | 4,197,642 | 2,338,995 | ||||
Net income | 780 | 252 | 1,032 | |||
Distributions to noncontrolling interests | (242) | (242) | ||||
Balance, ending at Jan. 02, 2021 | $ 420 | $ 6,240 | $ 39,628 | $ (6,077) | $ 6,135 | $ 46,346 |
Balance, shares, ending at Jan. 02, 2021 | 4,197,642 | 2,338,995 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,032 | $ 921 |
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | ||
Depreciation and amortization | 752 | 786 |
Amortization of leasehold interests | 22 | 31 |
Amortization of finance lease right-of-use asset | 119 | |
Amortization of operating lease right-of-use asset | 744 | 754 |
Finance lease interest expense | 66 | |
Gain on sale of property and equipment | (25) | |
Loss on abandonment of property and equipment | 3 | 7 |
Amortization of deferred loan costs | 10 | 9 |
Deferred income taxes | (51) | 125 |
(Income) loss from unconsolidated limited partnership | (9) | |
Changes in operating assets and liabilities: (increase) decrease in | ||
Other receivables | 161 | (51) |
Prepaid income taxes | 47 | (7) |
Inventories | (139) | (664) |
Prepaid expenses | 1,013 | 453 |
Other assets | (4) | 391 |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | 1,698 | 2,080 |
Operating lease liabilities | (1,647) | (430) |
Due to franchisees | (31) | (968) |
Net cash and cash equivalents provided by operating activities | 3,770 | 3,428 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (498) | (803) |
Purchase of construction in progress | (578) | (99) |
Deposits on property and equipment | (296) | (411) |
Proceeds from sale of fixed assets | 35 | 7 |
Distributions from unconsolidated limited partnership | 4 | 10 |
Investment in limited partnership | (235) | |
Net cash and cash equivalents used in investing activities | (1,568) | (1,296) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of long term debt | (794) | (648) |
Proceeds from long term debt | 4,398 | |
Principal payments of finance leases | (60) | |
Distributions to limited partnerships' noncontrolling interests | (242) | (432) |
Net cash and cash equivalents provided by (used in) financing activities | (1,096) | 3,318 |
Net Increase in Cash and Cash Equivalents | 1,106 | 5,450 |
Beginning of Period | 29,922 | 13,672 |
End of Period | 31,028 | 19,122 |
Cash paid during period for: | ||
Interest | 279 | 204 |
Income taxes | 61 | |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||
Financing of insurance contracts | 1,365 | 1,281 |
Purchase deposits transferred to property and equipment | 11 | 29 |
Purchase deposits transferred to CIP | 18 | 2 |
CIP transferred to property and equipment | 700 | |
Right-of-use assets and associated liabilities arising from adoption of ASC 842 | $ 27,822 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Jan. 02, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | (1) BASIS OF PRESENTATION: The accompanying condensed consolidated financial information for the thirteen weeks ended January 2, 2021 and December 28, 2019 are unaudited. Financial information as of October 3, 2020 has been derived from the audited financial statements of Flanigan’s Enterprises, Inc., a Florida corporation, together with its subsidiaries, (the “Company”, “we”, “our”, “ours” and “us” as the context requires), but does not include all disclosures required by accounting principles generally accepted in the United States of America. 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 3, 2020. Operating results for interim periods are not necessarily indicative of results to be expected for a full year. The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and the accounts of the eight limited partnerships in which we act as general partner and have controlling interests. All intercompany balances and transactions have been eliminated. Non-controlling interest represents the limited partners’ proportionate share of the net assets and results of operations of the eight limited partnerships. These condensed consolidated financial statements include estimates relating to performance based officers’ bonuses. The estimates are reviewed periodically and the effects of any revisions are reflected in the financial statements in the period they are determined to be necessary. Although these estimates are based on management’s knowledge of current events and actions it may take in the future, they may ultimately differ from actual results. The condensed consolidated financial statements include estimates relating to the calculation of incremental borrowing rates and length of leases associated with right-of-use assets and corresponding liabilities. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Jan. 02, 2021 | |
Net Income Per Common Share: | |
EARNINGS PER SHARE | (2) EARNINGS PER SHARE: We follow Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Section 260 - “ Earnings per Share |
RECENTLY ADOPTED AND RECENTLY I
RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Jan. 02, 2021 | |
Recent Adopted And Recent Issued Accounting Pronouncements | |
RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | (3) RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS: Adopted Effective September 29, 2019, we adopted Accounting Standards Codification 842, Leases (“ASC 842”). The new guidance requires that lease arrangements be presented on the lessee’s balance sheet by recording a right-of-use asset and a lease liability equal to the present value of the related future minimum lease payments. We adopted the standard in the first quarter of fiscal 2020, using the modified retrospective approach. Upon adoption, the Company recorded a right-of-use asset of $27.8 million and a lease liability of $27.8 million. At October 1, 2020, the Company decreased the operating lease right-of-use asset by $2.6 million and the operating lease liability by $2.6 million with the reclassification of an operating lease to a finance lease due to the exercise of a purchase option during the first quarter of our fiscal year 2021. The Company recorded a finance lease right-of-use asset of $4.8 million and a finance lease liability of $4.8 million as of October 3, 2020. We elected the transition package of practical expedients, under which the Company does not have to reassess (1) whether any expired or existing contracts are leases, or contain leases, (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. In addition, we made an accounting policy election to exclude leases with an initial term of 12 months or less from the balance sheet. This standard had a material impact on the Condensed Consolidated Balance Sheets due to the recording of a right-of-use asset and lease liability and on the Condensed Consolidated Statements of Income due to the escalations of rent in the extensions but did not have a material impact on the Condensed Consolidated Statement of Cash Flows. Recently Issued There are no recently issued accounting pronouncements that we have not yet adopted that we believe will have a material effect on our financial statements. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | (4) INCOME TAXES: We account for our income taxes using FASB ASC Topic 740, “ Income Taxes |
EXERCISE OF OPTIONS TO PURCHASE
EXERCISE OF OPTIONS TO PURCHASE | 3 Months Ended |
Jan. 02, 2021 | |
Real Estate [Abstract] | |
EXERCISE OF OPTIONS TO PURCHASE | (5) EXERCISE OF OPTIONS TO PURCHASE: North Lauderdale, Florida (“Flanigan’s Seafood Bar and Grill”/”Big Daddy’s Liquors”) On October 7, 2014, we entered into an Amendment to Lease Agreement (the “Lease Amendment”) with a non-affiliated third party from whom we rented approximately 4,600 square feet of commercial space located at 5450 N. State Road 7, North Lauderdale, Florida where we operate a combination “Flanigan’s Seafood Bar and Grill” restaurant and “Big Daddy’s Liquors” package liquor store (Store #40). The Lease Amendment extended the term of the Lease Agreement until December 31, 2020 and granted us the option to purchase, (the “Option to Purchase”), the real property and improvements through December 31, 2020 for $1,200,000. During the fourth quarter of our fiscal year 2020 we exercised the Option to Purchase and closed on the acquisition of the property on December 31, 2020. We paid all cash at closing. Sunrise, Florida (“Flanigan’s Seafood Bar and Grill”) During the second quarter of our fiscal year 2019, we entered into a Lease Agreement (the “Sunrise Lease Agreement”) with a non-affiliated third party to rent approximately 6,900 square feet of commercial space located at 14301 W. Sunrise Boulevard, Sunrise, Florida where, subject to certain conditions, we anticipate opening a new restaurant location. The Sunrise Lease Agreement grants us an option to purchase, (the “Option to Purchase”) the real property and improvements by February 28, 2021 for $4,800,000. During the third quarter of our fiscal year 2019, we assigned the Sunrise Lease Agreement, excluding the Option to Purchase, to a newly formed limited partnership. During the first quarter of our fiscal year 2021, we exercised the Option to Purchase and anticipate closing on the acquisition of the property during the second quarter of our fiscal year 2021. We intend to finance this acquisition with a loan from an unrelated third party lender. |
DEBT
DEBT | 3 Months Ended |
Jan. 02, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | (6) DEBT: Financed Insurance Premiums For the policy year commencing December 30, 2020, we financed the premiums on the following property, general liability, excess liability and terrorist policies, totaling approximately $1.94 million, which property, general liability, excess liability and terrorist insurance includes coverage for our franchises which are not included in our consolidated financial statements: (i) For the policy year beginning December 30, 2020, our general liability insurance, excluding limited partnerships, is a one (1) year policy with our insurance carriers. The one (1) year general liability insurance premium is in the amount of $340,000; (ii) For the policy year beginning December 30, 2020, our general liability insurance for our limited partnerships is a one (1) year policy with our insurance carriers. The one (1) year general liability insurance premium is in the amount of $426,000; (iii) For the policy year beginning December 30, 2020, our automobile insurance is a one (1) year policy. The one (1) year automobile insurance premium is in the amount of $93,000; (iv) For the policy year beginning December 30, 2020, our property insurance is a one (1) year policy. The one (1) year property insurance premium is in the amount of $627,000; (v) For the policy year beginning December 30, 2020, our excess liability insurance is a one (1) year policy. The one (1) year excess liability insurance premium is in the amount of $443,000; (vi) For the policy year beginning December 30, 2020, our terrorist insurance is a one (1) year policy. The one (1) year terrorist insurance premium is in the amount of $5,000; and (vii) For the policy year beginning December 30, 2020, our equipment breakdown insurance is a one (1) year policy. The one (1) year equipment breakdown insurance premium is in the amount of $6,000. Of the $1,940,000 annual premium amounts, which includes coverage for our franchises which are not included in our consolidated financial statements, we financed $1,776,000 through an unaffiliated third party lender. The finance agreement obligates us to repay the amounts financed together with interest at the rate of 2.45% per annum, over 11 months, with monthly payments of principal and interest, each in the amount of $164,000. The finance agreement is secured by a first priority security interest in all insurance policies, all unearned premium, return premiums, dividend payments and loss payments thereof. As of January 2, 2021, the aggregate principal balance owed from the financing of our property and general liability insurance policies is $1,365,000, excluding coverage for our franchises (which is $411,000), which are not included in our consolidated financial statements. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jan. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | (7) COMMITMENTS AND CONTINGENCIES: Construction Contracts a. 2505 N. University Drive, Hollywood, Florida (Store #19) During the third quarter of our fiscal year 2019, we entered into an agreement with a third party unaffiliated architect for design and development services totaling $77,000 for the re-build of our restaurant located at 2505 N. University Drive, Hollywood, Florida (Store #19) which has been closed since October 2018 due to damages caused by a fire, of which $62,000 has been paid. Additionally, during the third quarter of our fiscal year 2019, we entered into an agreement with a third party unaffiliated general contractor for site work at this location totaling $1,618,000, (i) to connect the real property where this restaurant operated (Store #19) to city sewer and (ii) to construct a new building on the adjacent parcel of real property for the operation of a package liquor store. During our fiscal year 2020 and the first quarter of our fiscal year 2021, we agreed to change orders to the agreement for additional construction services increasing the total contract price by $140,000 to $1,757,000, of which $64,000 of the total amount obligated has been paid through January 2, 2021. b. 14301 W. Sunrise Boulevard, Sunrise, Florida (Store #85) During the third quarter of our fiscal year 2019, we also entered into an agreement with a third party unaffiliated design group for design and development services of our new location at 14301 W. Sunrise Boulevard, Sunrise, Florida 33323 (Store #85) for a total contract price of $122,000. During our fiscal year 2020, we agreed upon amendments to the $122,000 Contract for additional design and development services which had the effect of increasing the total contract price by $18,000 to $140,000, of which $106,000 has been paid through January 2, 2021. Additionally, during the fourth quarter of our fiscal year 2020, we entered into an agreement with a third party unaffiliated general contractor for interior renovations at this location totaling $1,236,000, of which $111,000 has been paid through January 2, 2021. Leases To conduct certain of our operations, we lease restaurant and package liquor store space in South Florida from unrelated third parties. Our leases have remaining lease terms of up to 10 years, some of which include options to renew and extend the lease terms for up to an additional 30 years. We presently intend to renew some of the extension options available to us and for purposes of computing the right-of-use assets and lease liabilities required by ASC 842, we have incorporated into all lease terms which may be extended, an additional term of the lesser of (i) the amount of years the lease may be extended; or (ii) 15 years. Following adoption of ASC 842, common area maintenance and property taxes are not considered to be lease components. The components of lease expense are as follows: 13 Weeks 13 Weeks Ended January 2, 2021 Ended December 28, 2019 Finance Lease Amortization $ 119,000 $ — Finance Lease Expense, which is included in interest expense 66,000 — Operating Lease Expense, which is included in occupancy costs 1,049,000 1,130,000 $ 1,234,000 $ 1,130,000 Supplemental balance sheet information related to leases as follows: Classification on the Condensed Consolidated Balance Sheet January 2, 2021 December 28, 2019 Assets Finance lease assets $ 4,630,000 $ — Operating lease assets 21,406,000 27,068,000 $ 26,036,000 $ 27,068,000 Liabilities Finance current liabilities $ 4,778,000 $ — Operating current liabilities 1,936,000 1,810,000 Operating lease non-current liabilities $ 19,870,000 $ 25,585,000 Weighted Average Remaining Lease Term: Finance leases 0.17 Years — Operating leases 7.46 Years 9.08 Years Weighted Average Discount: Finance leases 5.5% — Operating leases 5.5% 5.5% The following table outlines the minimum future lease payments for the next five years and thereafter: For fiscal year 2021 Operating Finance For fiscal year 2020 Operating Finance 2021 (nine (9) months) $ 2,329,000 $ 4,821,000 2020 (nine (9) months) $ 2,437,000 $ — 2022 2,928,000 — 2021 4,466,000 — 2023 2,942,000 — 2022 3,172,000 — 2024 2,975,000 — 2023 3,193,000 — 2025 2,957,000 — 2024 3,234,000 — Thereafter 14,131,000 — Thereafter 19.942,000 — Total lease payments Total lease payments (Undiscounted cash flows) 28,262,000 4,821,000 (Undiscounted cash flows) 36,444,000 — Less imputed interest (6,456,000 ) (43,000 ) Less imputed interest (9,049,000 ) — Total $ 21,806,000 $ 4,778,000 Total $ 27,395,000 $ — Litigation Our sale of alcoholic beverages subjects us to “dram shop” statutes, which allow an injured person to recover damages from an establishment that served alcoholic beverages to an intoxicated person. If we receive a judgment substantially in excess of our insurance coverage or if we fail to maintain our insurance coverage, our business, financial condition, operating results or cash flows could be materially and adversely affected. We currently have no “dram shop” claims. We are a party to various other claims, legal actions and complaints arising in the ordinary course of our business. It is our opinion, after consulting with legal counsel, that all such matters are without merit or involve such amounts that an unfavorable disposition would not have a material adverse effect on our financial position or results of operations. |
CORONAVIRUS PANDEMIC
CORONAVIRUS PANDEMIC | 3 Months Ended |
Jan. 02, 2021 | |
Coronavirus Pandemic | |
CORONAVIRUS PANDEMIC | (8) CORONAVIRUS PANDEMIC: In March 2020, a novel strain of coronavirus was declared a global pandemic and a National Public Health Emergency. The novel coronavirus pandemic and related “shelter-in-place” orders and other governmental mandates relating thereto (collectively, “COVID-19”) adversely affected and will, in all likelihood continue to adversely affect, our restaurant operations and financial results for the foreseeable future. Throughout the first quarter of our fiscal year 2021, in accordance with guidance from health officials, we have offered both indoor and outdoor food and bar options at all of our restaurants, with, among other precautions appropriate social distancing and mask requirements for all customers and employees. During the third quarter of our fiscal year 2020, we, certain of the entities owning the limited partnership stores (the “LP’s”), franchised stores (the “Franchisees”) as well as the store we manage but do not own (the “Managed Store”), (collectively, the “Borrowers”), applied for and received loans from an unrelated third party lender pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) enacted March 27, 2020, in the aggregate principal amount of approximately $13.1 million, (the “PPP Loans”), of which approximately: (i) $5.9 million was loaned to us; (ii) $4.1 million was loaned to 8 of the LP’s; (iii) $2.6 million was loaned to 5 of the Franchisees; and (iv) $0.5 million was loaned to the Managed Store. The PPP Loans to the Franchisees and the Managed Store are not included in the debt of our consolidated financial statements. Under the terms of the PPP Loans, up to the entire amount of principal and accrued interest may be forgiven to the extent the proceeds of the PPP Loans are used for qualifying expenses as described in the CARES Act and applicable implementing guidance issued by the U.S. Small Business Administration under the PPP. Subsequent to the end of the first quarter of our fiscal year 2021, we have begun applying for forgiveness under the PPP Loans. With respect to any portion of any of the PPP Loans that is not forgiven under the terms of the PPP Loans, such amounts will be subject to customary provisions for a loan of this type, including customary events of default relating to, among other things, payment defaults, breaches of the provisions of the applicable PPP Note and cross-defaults on any other loan with the Lender or other creditors. No assurance can be given that the Borrowers will obtain forgiveness of the PPP Loans in whole or in part. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended |
Jan. 02, 2021 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | (9) BUSINESS SEGMENTS: We operate principally in two reportable segments – package stores and restaurants. The operation of package stores consists of retail liquor sales and related items. Information concerning the revenues and operating income for the thirteen weeks ended January 2, 2021 and December 28, 2019, and identifiable assets for the two reportable segments in which we operate, are shown in the following table. 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 expenses and income taxes. Identifiable assets by segment are those assets that are used in our operations in each segment. Corporate assets are principally cash and real property, improvements, furniture, equipment and vehicles used at our corporate headquarters. We do not have any operations outside of the United States and transactions between restaurants and package liquor stores are not material. (in thousands) Thirteen Weeks January 2, 2021 Thirteen Weeks December 28, 2019 Operating Revenues: Restaurants $ 22,771 $ 24,633 Package stores 8,011 5,707 Other revenues 598 601 Total operating revenues $ 31,380 $ 30,941 Income from Operations Reconciled to Income After Income Taxes and Net Income Attributable to Noncontrolling Interests Restaurants $ 1,180 $ 1,735 Package stores 715 383 1,895 2,118 Corporate expenses, net of other revenues (625 ) (887 ) Income from Operations 1,270 1,231 Interest expense (279 ) (204 ) Interest and Other income 12 12 Gain on sale of property and equipment 25 — Income Before Benefit (Provision) for Income Taxes $ 1,028 $ 1,039 Benefit (Provision) for Income Taxes 4 (118 ) Net Income 1,032 921 Net Income Attributable to Noncontrolling Interests (252 ) (427 ) Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders $ 780 $ 494 Depreciation and Amortization: Restaurants $ 593 $ 635 Package stores 89 84 682 719 Corporate 92 98 Total Depreciation and Amortization $ 774 $ 817 Capital Expenditures: Restaurants $ 764 $ 701 Package stores 113 103 877 804 Corporate 228 129 Total Capital Expenditures $ 1,105 $ 933 January 2, October 3, 2021 2020 Identifiable Assets: Restaurants $ 54,034 $ 55,030 Package store 13,349 $ 13,771 67,383 68,801 Corporate 46,624 43,683 Consolidated Totals $ 114,007 $ 112,484 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Jan. 02, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | (10) SUBSEQUENT EVENTS: Extension of Lease for Existing Location Pinecrest, Florida Subsequent to the end of the first quarter of our fiscal year 2021, the lease with an unrelated third party for the restaurant owned by our limited partnership and located at 11415 S. Dixie Highway, Pinecrest, Florida (Store #13) was extended through January 31, 2031 with one (1) five (5) year renewal option. The fixed annual rental was reduced by 7½% and the fixed annual rental increases were reduced to 2% from 3% for the first seven (7) years, otherwise the extended lease is on the same terms and conditions, including fixed annual rental increases and continued percentage rent. Construction Contracts Miramar, Florida (“Flanigan’s Seafood Bar and Grill”) During fourth quarter of our fiscal year 2019, we entered into a Lease Agreement with a non-affiliated third party for the lease of a restaurant location in a shopping center at 11225 Miramar Parkway, #250, Miramar, Florida 33024 (Store #25). The shopping center is currently in the developmental stage and the Lease Agreement is still contingent upon our receipt of delivery of the leased premises by August 28, 2021. Subsequent to the end of the first quarter of our fiscal year 2021, we entered into an Architectural Professional Services Agreement with a third-party unaffiliated architect for design and development services for this new location (Store #25) for a total contract price of $73,850, of which $44,300 has been paid subsequent to the end of the first quarter of our fiscal year 2021. Miramar, Florida (“Big Daddy’s Wine and Liquors”) During fourth quarter of our fiscal year 2019, we entered into a Lease Agreement with a non-affiliated third party for the lease of a retail package liquor store location in a shopping center at 11225 Miramar Parkway, #245, Miramar, Florida 33024 (Store #24). The shopping center is currently in the developmental stage and the Lease Agreement is still contingent upon our receipt of delivery of the leased premises by August 28, 2021. Subsequent to the end of the first quarter of our fiscal year 2021, we entered into an Architectural Professional Services Agreement with a third-party unaffiliated architect for design and development services for this new location (Store #24) for a total contract price of $18,650, of which $11,190 has been paid subsequent to the end of the first quarter of our fiscal year 2021. Subsequent events have been evaluated through the date these consolidated financial statements were issued and except as disclosed herein, no other events required disclosure. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Jan. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense are as follows: 13 Weeks 13 Weeks Ended January 2, 2021 Ended December 28, 2019 Finance Lease Amortization $ 119,000 $ — Finance Lease Expense, which is included in interest expense 66,000 — Operating Lease Expense, which is included in occupancy costs 1,049,000 1,130,000 $ 1,234,000 $ 1,130,000 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases as follows: Classification on the Condensed Consolidated Balance Sheet January 2, 2021 December 28, 2019 Assets Finance lease assets $ 4,630,000 $ — Operating lease assets 21,406,000 27,068,000 $ 26,036,000 $ 27,068,000 Liabilities Finance current liabilities $ 4,778,000 $ — Operating current liabilities 1,936,000 1,810,000 Operating lease non-current liabilities $ 19,870,000 $ 25,585,000 Weighted Average Remaining Lease Term: Finance leases 0.17 Years — Operating leases 7.46 Years 9.08 Years Weighted Average Discount: Finance leases 5.5% — Operating leases 5.5% 5.5% |
Schedule of Minimum Future Lease Payments | The following table outlines the minimum future lease payments for the next five years and thereafter: For fiscal year 2021 Operating Finance For fiscal year 2020 Operating Finance 2021 (nine (9) months) $ 2,329,000 $ 4,821,000 2020 (nine (9) months) $ 2,437,000 $ — 2022 2,928,000 — 2021 4,466,000 — 2023 2,942,000 — 2022 3,172,000 — 2024 2,975,000 — 2023 3,193,000 — 2025 2,957,000 — 2024 3,234,000 — Thereafter 14,131,000 — Thereafter 19.942,000 — Total lease payments Total lease payments (Undiscounted cash flows) 28,262,000 4,821,000 (Undiscounted cash flows) 36,444,000 — Less imputed interest (6,456,000 ) (43,000 ) Less imputed interest (9,049,000 ) — Total $ 21,806,000 $ 4,778,000 Total $ 27,395,000 $ — |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Jan. 02, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | (in thousands) Thirteen Weeks January 2, 2021 Thirteen Weeks December 28, 2019 Operating Revenues: Restaurants $ 22,771 $ 24,633 Package stores 8,011 5,707 Other revenues 598 601 Total operating revenues $ 31,380 $ 30,941 Income from Operations Reconciled to Income After Income Taxes and Net Income Attributable to Noncontrolling Interests Restaurants $ 1,180 $ 1,735 Package stores 715 383 1,895 2,118 Corporate expenses, net of other revenues (625 ) (887 ) Income from Operations 1,270 1,231 Interest expense (279 ) (204 ) Interest and Other income 12 12 Gain on sale of property and equipment 25 — Income Before Benefit (Provision) for Income Taxes $ 1,028 $ 1,039 Benefit (Provision) for Income Taxes 4 (118 ) Net Income 1,032 921 Net Income Attributable to Noncontrolling Interests (252 ) (427 ) Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders $ 780 $ 494 Depreciation and Amortization: Restaurants $ 593 $ 635 Package stores 89 84 682 719 Corporate 92 98 Total Depreciation and Amortization $ 774 $ 817 Capital Expenditures: Restaurants $ 764 $ 701 Package stores 113 103 877 804 Corporate 228 129 Total Capital Expenditures $ 1,105 $ 933 January 2, October 3, 2021 2020 Identifiable Assets: Restaurants $ 54,034 $ 55,030 Package store 13,349 $ 13,771 67,383 68,801 Corporate 46,624 43,683 Consolidated Totals $ 114,007 $ 112,484 |
RECENTLY ADOPTED AND RECENTLY_2
RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Narrative) (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Oct. 03, 2020 | Oct. 01, 2020 | Dec. 28, 2019 |
Recent Adopted And Recent Issued Accounting Pronouncements | ||||
Right-of-use asset | $ 21,406 | $ 22,150 | $ 2,600 | $ 27,068 |
Lease liability | 21,806 | $ 2,600 | 27,395 | |
Finance lease right-of-use asset | 4,630 | 4,749 | ||
Finance lease liability | $ 4,778 | $ 4,800 |
EXERCISE OF OPTIONS TO PURCHA_2
EXERCISE OF OPTIONS TO PURCHASE (Details) | 1 Months Ended | |||
Feb. 28, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 30, 2019ft² | Oct. 07, 2014ft² | |
North Lauderdale, Florida [Member] | ||||
Real Estate [Line Items] | ||||
Rentable area | ft² | 4,600 | |||
Lease expiration date | Dec. 31, 2020 | |||
Purchase price of real property and improvements under lease amendment | $ | $ 1,200,000 | |||
Sunrise, Florida [Member] | ||||
Real Estate [Line Items] | ||||
Rentable area | ft² | 6,900 | |||
Sunrise, Florida [Member] | Subsequent Event [Member] | ||||
Real Estate [Line Items] | ||||
Purchase price of real property and improvements under lease amendment | $ | $ 4,800,000 |
DEBT (Details)
DEBT (Details) | 3 Months Ended |
Jan. 02, 2021USD ($) | |
Debt Instrument [Line Items] | |
Principal amount outstanding | $ 1,365,000 |
Amount of coverage excluded for franchises | 411,000 |
Financed Insurance Premiums [Member] | |
Debt Instrument [Line Items] | |
Amount of premium payable | 19,400,000 |
Financed Insurance Premiums [Member] | Unaffiliated Third Party [Member] | |
Debt Instrument [Line Items] | |
Amount of premium payable financed from third party lender | $ 1,776,000 |
Interest rate (per annum) | 2.45% |
Term of financing agreement | 11 months |
Monthly payment of principal and interest | $ 164,000 |
Payment frequency | Monthly |
Financed Insurance Premiums [Member] | General Liability Insurance Excluding Limited Partnership Premium [Member] | |
Debt Instrument [Line Items] | |
Term of insurance premium | 1 year |
Amount of premium payable | $ 340,000 |
Financed Insurance Premiums [Member] | General Liability Insurance for Limited Partnership Premium [Member] | |
Debt Instrument [Line Items] | |
Term of insurance premium | 1 year |
Amount of premium payable | $ 426,000 |
Financed Insurance Premiums [Member] | Automobile Insurance Premium [Member] | |
Debt Instrument [Line Items] | |
Term of insurance premium | 1 year |
Amount of premium payable | $ 93,000 |
Financed Insurance Premiums [Member] | Property Insurance Premium [Member] | |
Debt Instrument [Line Items] | |
Term of insurance premium | 1 year |
Amount of premium payable | $ 627,000 |
Financed Insurance Premiums [Member] | Excess Liability Insurance Premium [Member] | |
Debt Instrument [Line Items] | |
Term of insurance premium | 1 year |
Amount of premium payable | $ 443,000 |
Financed Insurance Premiums [Member] | Terrorist Insurance Premium [Member] | |
Debt Instrument [Line Items] | |
Term of insurance premium | 1 year |
Amount of premium payable | $ 5,000 |
Financed Insurance Premiums [Member] | Equipment Breakdown Insurance Premium [Member] | |
Debt Instrument [Line Items] | |
Term of insurance premium | 1 year |
Amount of premium payable | $ 6,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 3 Months Ended |
Jan. 02, 2021USD ($) | |
Design and Development Services - 2505 N. University Drive, Hollywood, Florida [Member] | |
Other Commitments [Line Items] | |
Total contract price | $ 77 |
Amount for renovation of construction in process | 62 |
Third Party Agreement - Connection of Liquor Store and Restaurant [Member] | |
Other Commitments [Line Items] | |
Total contract price | 1,618 |
Additional Construction Services - 2505 N. University Drive, Hollywood, Florida [Member] | |
Other Commitments [Line Items] | |
Amount for renovation of construction in process | 64 |
Additional amount for renovation of construction in process | 140 |
Additional Construction Services Revised Contract - 2505 N. University Drive, Hollywood, Florida [Member] | |
Other Commitments [Line Items] | |
Total contract price | 1,757 |
Design and Development Services - 14301 W. Sunrise Boulevard, Sunrise, Florida [Member] | |
Other Commitments [Line Items] | |
Total contract price | 122 |
Amount for renovation of construction in process | 106 |
Additional amount for renovation of construction in process | 18 |
Design and Development Services Revised Contract - 14301 W. Sunrise Boulevard, Sunrise, Florida [Member] | |
Other Commitments [Line Items] | |
Total contract price | 140 |
Third Party Interior Renovations Services - 14301 W. Sunrise Boulevard, Sunrise, Florida [Member] | |
Other Commitments [Line Items] | |
Additional amount for renovation of construction in process | 1,236 |
Third Party Interior Renovations Revised Services - 14301 W. Sunrise Boulevard, Sunrise, Florida [Member] | |
Other Commitments [Line Items] | |
Total contract price | $ 111 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Schedule of Components of Lease Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Finance Lease Amortization | $ 119 | |
Finance Lease Expense, which is included in interest expense | 66 | |
Operating Lease Expense, which is included in occupancy costs | 1,049 | 1,130 |
Total lease expense | $ 1,234 | $ 1,130 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Schedule of Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Oct. 03, 2020 | Oct. 01, 2020 | Dec. 28, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||||
Finance lease assets | $ 4,630 | $ 4,749 | ||
Operating lease assets | 21,406 | 22,150 | $ 2,600 | $ 27,068 |
Total Right-of-use asset | 26,036 | 26,899 | 27,068 | |
Finance current liabilities | 4,778 | 4,772 | ||
Operating current liabilities | 1,936 | 3,116 | 1,810 | |
Operating lease non-current liabilities | $ 19,870 | $ 20,337 | $ 25,585 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Schedule of Additional Information Related to Leases) (Details) | Jan. 02, 2021 | Dec. 28, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Weighted Average Remaining Lease Term - Finance leases | 2 months 1 day | |
Weighted Average Remaining Lease Term - Operating leases | 7 years 5 months 16 days | 9 years 29 days |
Weighted Average Discount - Finance leases | 5.50% | |
Weighted Average Discount - Operating leases | 5.50% | 5.50% |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES (Schedule of Minimum Future Lease Payments) (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Oct. 03, 2020 | Oct. 01, 2020 | Dec. 28, 2019 |
Operating leases: | ||||
2020 (nine (9) months) | $ 2,437 | |||
2021 (nine (9) months) | $ 2,329 | 4,466 | ||
2022 | 2,928 | 3,172 | ||
2023 | 2,942 | 3,193 | ||
2024 | 2,975 | 3,234 | ||
2025 | 2,957 | |||
Thereafter | 14,131 | 19,942 | ||
Total lease payments (Undiscounted cash flows) | 28,262 | 36,444 | ||
Less imputed interest | (6,456) | (9,049) | ||
Total | 21,806 | $ 2,600 | 27,395 | |
Finance Leases: | ||||
2020 (nine (9) months) | ||||
2021 (nine (9) months) | 4,821 | |||
2022 | ||||
2023 | ||||
2024 | ||||
2025 | ||||
Thereafter | ||||
Total lease payments (Undiscounted cash flows) | 4,821 | |||
Less imputed interest | (43) | |||
Total | $ 4,778 | $ 4,800 |
CORONAVIRUS PANDEMIC (Details)
CORONAVIRUS PANDEMIC (Details) | Jan. 02, 2021USD ($) |
Loan aggregate principal amount | $ 5,900,000 |
LPs [Member] | |
Loan aggregate principal amount | 4,100,000 |
Franchisees [Member] | |
Loan aggregate principal amount | 2,600,000 |
Managed Store [Member] | |
Loan aggregate principal amount | 500,000 |
PPP Loans Member] | |
Loan aggregate principal amount | $ 13,100,000 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Oct. 03, 2020 | |
Operating Revenues: | |||
Operating revenues | $ 31,380 | $ 30,941 | |
Income before corporate expenses | 1,895 | 2,118 | |
Corporate expenses, net of other revenues | (625) | (887) | |
Income from Operations | 1,270 | 1,231 | |
Interest expense | (279) | (204) | |
Interest and Other income | 12 | 12 | |
Gain on sale of property and equipment | 25 | ||
Income Before Benefit (Provision) for Income Taxes | 1,028 | 1,039 | |
Benefit (Provision) for Income Taxes | 4 | (118) | |
Net Income | 1,032 | 921 | |
Net Income Attributable to Noncontrolling Interests | 252 | 427 | |
Net Income Attributable to Flanigan's Enterprises, Inc. Stockholders | 780 | 494 | |
Depreciation and Amortization: | |||
Depreciation and amortization | 774 | 817 | |
Capital Expenditures: | |||
Capital expenditures | 1,105 | 933 | |
Identifiable Assets: | |||
Assets | 114,007 | $ 112,484 | |
Restaurants [Member] | |||
Operating Revenues: | |||
Operating revenues | 22,771 | 24,633 | |
Income before corporate expenses | 1,180 | 1,735 | |
Depreciation and Amortization: | |||
Depreciation and amortization | 593 | 635 | |
Capital Expenditures: | |||
Capital expenditures | 764 | 701 | |
Identifiable Assets: | |||
Assets | 54,034 | 55,030 | |
Package stores [Member] | |||
Operating Revenues: | |||
Operating revenues | 8,011 | 5,707 | |
Income before corporate expenses | 715 | 383 | |
Depreciation and Amortization: | |||
Depreciation and amortization | 89 | 84 | |
Capital Expenditures: | |||
Capital expenditures | 113 | 103 | |
Identifiable Assets: | |||
Assets | 13,349 | 13,771 | |
Other [Member] | |||
Operating Revenues: | |||
Operating revenues | 598 | 601 | |
Total segments [Member] | |||
Depreciation and Amortization: | |||
Depreciation and amortization | 682 | 719 | |
Capital Expenditures: | |||
Capital expenditures | 877 | 804 | |
Identifiable Assets: | |||
Assets | 67,383 | 68,801 | |
Corporate [Member] | |||
Depreciation and Amortization: | |||
Depreciation and amortization | 92 | 98 | |
Capital Expenditures: | |||
Capital expenditures | 228 | $ 129 | |
Identifiable Assets: | |||
Assets | $ 46,624 | $ 43,683 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] | 2 Months Ended |
Feb. 16, 2021USD ($) | |
Pinecrest, Florida [Member] | |
Subsequent Event [Line Items] | |
Lease expiration date | Jan. 31, 2031 |
Renewal period of lease | 5 years |
Percentage decrease of fixed annual rental | 7.50% |
Lease term | 7 years |
Pinecrest, Florida [Member] | Minimum [Member] | |
Subsequent Event [Line Items] | |
Percentage increase of fixed annual rental | 2.00% |
Pinecrest, Florida [Member] | Maximum [Member] | |
Subsequent Event [Line Items] | |
Percentage increase of fixed annual rental | 3.00% |
Design and Development Services - Miramar, Florida Flanigan's Seafood Bar and Grill [Member] | |
Subsequent Event [Line Items] | |
Total contract price | $ 73,850 |
Amount for renovation of construction in process | 44,300 |
Design and Development Services - Miramar, Florida Big Daddy's Wine and Liquors [Member] | |
Subsequent Event [Line Items] | |
Total contract price | 18,650 |
Amount for renovation of construction in process | $ 11,190 |