Mexican Restaurants Inc. (CASA, Financial) filed Quarterly Report for the period ended 2009-09-27.
Mexican Restaurants Inc. operates and franchises Mexican-theme family dining restaurants featuring certain elements associated with the casual dining experience. Mexican Restaurants Inc. has a market cap of $7.4 million; its shares were traded at around $2.25 with and P/S ratio of 0.1. Mexican Restaurants Inc. had an annual average earning growth of 6.3% over the past 5 years.
On a year-to-date basis, the Company s revenue decreased $398,486 to $54.8 million compared to $55.2 million for the same 39-week period in fiscal 2008. Restaurant sales for the 39-week period ended September 27, 2009 decreased $348,192 to $54.2 million compared to $54.6 million for the same 39-week period in fiscal 2008. Franchised-owned restaurant sales, as reported by franchisees, decreased approximately 2.9% over the same 39-week period in fiscal 2008. The decrease in restaurant revenues primarily reflects a decrease in same-store sales, partially offset by new restaurant revenues and revenues of restaurants that were temporarily closed last year due to Hurricanes Gustav and Ike. For the 39-week period ended September 27, 2009, Company-owned same-restaurant sales decreased approximately 5.6%.
Other Income (Expense). Net expense decreased $47,948 to $32,313 in the 13-week period ended September 27, 2009 compared with a net expense of $80,261 in the 13-week period ended September 28, 2008. Interest expense decreased $52,133 to $39,870 in the 13-week period ended September 27, 2009 compared with interest expense of $92,003 in the 13-week period ended September 28, 2008. The decrease in interest expense reflects lower interest rates and lower average debt balances during the third quarter of fiscal year 2009 as compared to the third quarter of fiscal year 2008. Net expense decreased $177,647 to $115,459 in the 39-week period ending September 27, 2009 compared with a net expense of $293,105 in the 39-week period ended September 28, 2008. Interest expense decreased $180,234 to $144,981 in the 39-week period ended September 27, 2009 compared with interest expense of $325,215 in the 39-week period ended September 28, 2008. The decrease in interest expense reflects lower interest rates and lower average debt balances during the 39-week period of fiscal year 2009 as compared to the 39-week period of fiscal year 2008.
Discontinued Operations. On April 7, 2009, we sold substantially all of the operating assets and liabilities of our La Senorita restaurant chain (consisting of five site locations) located in Michigan for $2,557,603 as adjusted under the terms of the purchase agreement. We recorded a gain on this sale of $387,083, net of allocated goodwill, in the second quarter of 2009. Proceeds from the sale were used to pay down long-term debt. On January 24, 2009, we closed one underperforming Mission Burrito restaurant. The results of operations for the current and prior periods for the La Senorita chain and the closed Mission Burrito restaurant have been reported as discontinued operations. For the 13-week period ended September 27, 2009, we did not have any discontinued operations. For the 39-week period ended September 27, 2009, we recognized net income from discontinued operations of $231,582 from the sale of the chain and the closure of the Mission Burrito restaurant. Income from discontinued operations of $36,021 during the 39-week period ended September 27, 2009 reflects operating income from the La Senorita restaurants, partially offset by operating losses from the closed Mission Burrito restaurant. Restaurant closure costs of $190,941, for the 39-week period ending September 27, 2009, primarily reflect costs associated with the closure of the Mission Burrito restaurant. Gain on sale of assets of $386,502 during the 39-week period ended September 27, 2009 resulted primarily from the sale of La Senorita.
We financed our capital expenditure requirements for the 39-week period ended September 27, 2009 primarily from our operating cash flows. In the 39-week period of fiscal year 2009, we had cash flows provided by operating activities of approximately $1.8 million, compared with cash flows provided by operating activities of approximately $1.2 million in the comparable 39-week period of fiscal year 2008. The increase in cash flows from operating activities reflects the receipt of insurance receivables related to last year s hurricanes and the Pasadena, Texas restaurant fire. During the 39-week period ended September 27, 2009, we made draws of $900,000 and payments of $3,250,000 on our line of credit. Proceeds from the sale of La Senorita contributed to the amount paid on the line of credit. As of September 27, 2009, we had a working capital deficit of $994,215 compared with a working capital deficit (excluding assets held for sale) of $1,023,766 at December 28, 2008. A working capital deficit is common in the restaurant industry, since restaurant companies do not typically require a significant investment in either accounts receivable or inventory.
Our principal capital requirements are the funding of routine capital expenditures, new restaurant development or acquisitions and remodeling of older units. During the 39-week period ended September 27, 2009, total cash used for capital requirements was $2,777,570 with $2,762,320 used in continuing operations and $15,250 used in discontinued operations. Total cash used for capital requirements included $1,835,598 spent for routine capital expenditures, $540,155 for new restaurant development, $76,394 for replacement of damaged assets and $325,422 for remodels. We opened one new restaurant during the third quarter of fiscal year 2009. We do not plan to open any new restaurants during the remainder of fiscal year 2009. We anticipate that we will spend approximately $400,000 for capital expenditures during the remainder of fiscal year 2009.
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Mexican Restaurants Inc. operates and franchises Mexican-theme family dining restaurants featuring certain elements associated with the casual dining experience. Mexican Restaurants Inc. has a market cap of $7.4 million; its shares were traded at around $2.25 with and P/S ratio of 0.1. Mexican Restaurants Inc. had an annual average earning growth of 6.3% over the past 5 years.
Highlight of Business Operations:
Revenues. Our revenues for the third quarter of fiscal year 2009 decreased $381,636 or 2.2% to $17.3 million compared with $17.7 million for the same quarter in fiscal year 2008. Restaurant sales for third quarter 2009 decreased by $354,895 or 2.0% to $17.1 million compared with $17.4 million for the third quarter of 2008. Franchised-owned restaurant sales, as reported by franchisees, decreased approximately 3.4% over the same quarter in fiscal 2008. The decrease in restaurant revenues primarily reflects a decrease in same-store sales, partially offset by new restaurant revenues and revenues of restaurants that were temporarily closed last year due to Hurricanes Gustav and Ike. For the third quarter ended September 27, 2009, Company-owned same-restaurant sales decreased approximately 11.4%, caused by a weakened economy.On a year-to-date basis, the Company s revenue decreased $398,486 to $54.8 million compared to $55.2 million for the same 39-week period in fiscal 2008. Restaurant sales for the 39-week period ended September 27, 2009 decreased $348,192 to $54.2 million compared to $54.6 million for the same 39-week period in fiscal 2008. Franchised-owned restaurant sales, as reported by franchisees, decreased approximately 2.9% over the same 39-week period in fiscal 2008. The decrease in restaurant revenues primarily reflects a decrease in same-store sales, partially offset by new restaurant revenues and revenues of restaurants that were temporarily closed last year due to Hurricanes Gustav and Ike. For the 39-week period ended September 27, 2009, Company-owned same-restaurant sales decreased approximately 5.6%.
Other Income (Expense). Net expense decreased $47,948 to $32,313 in the 13-week period ended September 27, 2009 compared with a net expense of $80,261 in the 13-week period ended September 28, 2008. Interest expense decreased $52,133 to $39,870 in the 13-week period ended September 27, 2009 compared with interest expense of $92,003 in the 13-week period ended September 28, 2008. The decrease in interest expense reflects lower interest rates and lower average debt balances during the third quarter of fiscal year 2009 as compared to the third quarter of fiscal year 2008. Net expense decreased $177,647 to $115,459 in the 39-week period ending September 27, 2009 compared with a net expense of $293,105 in the 39-week period ended September 28, 2008. Interest expense decreased $180,234 to $144,981 in the 39-week period ended September 27, 2009 compared with interest expense of $325,215 in the 39-week period ended September 28, 2008. The decrease in interest expense reflects lower interest rates and lower average debt balances during the 39-week period of fiscal year 2009 as compared to the 39-week period of fiscal year 2008.
Discontinued Operations. On April 7, 2009, we sold substantially all of the operating assets and liabilities of our La Senorita restaurant chain (consisting of five site locations) located in Michigan for $2,557,603 as adjusted under the terms of the purchase agreement. We recorded a gain on this sale of $387,083, net of allocated goodwill, in the second quarter of 2009. Proceeds from the sale were used to pay down long-term debt. On January 24, 2009, we closed one underperforming Mission Burrito restaurant. The results of operations for the current and prior periods for the La Senorita chain and the closed Mission Burrito restaurant have been reported as discontinued operations. For the 13-week period ended September 27, 2009, we did not have any discontinued operations. For the 39-week period ended September 27, 2009, we recognized net income from discontinued operations of $231,582 from the sale of the chain and the closure of the Mission Burrito restaurant. Income from discontinued operations of $36,021 during the 39-week period ended September 27, 2009 reflects operating income from the La Senorita restaurants, partially offset by operating losses from the closed Mission Burrito restaurant. Restaurant closure costs of $190,941, for the 39-week period ending September 27, 2009, primarily reflect costs associated with the closure of the Mission Burrito restaurant. Gain on sale of assets of $386,502 during the 39-week period ended September 27, 2009 resulted primarily from the sale of La Senorita.
We financed our capital expenditure requirements for the 39-week period ended September 27, 2009 primarily from our operating cash flows. In the 39-week period of fiscal year 2009, we had cash flows provided by operating activities of approximately $1.8 million, compared with cash flows provided by operating activities of approximately $1.2 million in the comparable 39-week period of fiscal year 2008. The increase in cash flows from operating activities reflects the receipt of insurance receivables related to last year s hurricanes and the Pasadena, Texas restaurant fire. During the 39-week period ended September 27, 2009, we made draws of $900,000 and payments of $3,250,000 on our line of credit. Proceeds from the sale of La Senorita contributed to the amount paid on the line of credit. As of September 27, 2009, we had a working capital deficit of $994,215 compared with a working capital deficit (excluding assets held for sale) of $1,023,766 at December 28, 2008. A working capital deficit is common in the restaurant industry, since restaurant companies do not typically require a significant investment in either accounts receivable or inventory.
Our principal capital requirements are the funding of routine capital expenditures, new restaurant development or acquisitions and remodeling of older units. During the 39-week period ended September 27, 2009, total cash used for capital requirements was $2,777,570 with $2,762,320 used in continuing operations and $15,250 used in discontinued operations. Total cash used for capital requirements included $1,835,598 spent for routine capital expenditures, $540,155 for new restaurant development, $76,394 for replacement of damaged assets and $325,422 for remodels. We opened one new restaurant during the third quarter of fiscal year 2009. We do not plan to open any new restaurants during the remainder of fiscal year 2009. We anticipate that we will spend approximately $400,000 for capital expenditures during the remainder of fiscal year 2009.
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