The 10Q is out, and I think it even exceeds our expectations on what Tanners and RSI is going to contribute to the bottom line!
May 22, 2000
RESTAURANT TEAMS INTERNATIONAL INC (RTIN.OB)
Quarterly Report (SEC form 10QSB)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-QSB includes "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities
Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which can be identified by the use of forward-looking terminology such as,
"may", "believe", "expect", "intend", "anticipate", "estimate" or "continue" or the negative thereof or other variations thereon or comparable terminology. All statements other
than statements of historical fact included in this Form 10-QSB, are forward-looking statements. Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors with respect to any such
forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially from the Company's expectations ("Cautionary
Statements") are disclosed in this Form 10-QSB, including, without limitation, in conjunction with the forward-looking statements included in this Form 10-QSB, and in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1999. Important factors that could cause actual results to differ materially from those in the
forward-looking statements herein include, but are not limited to, the newness of the Company, the need for additional capital and additional financing, the Company's limited
restaurant base, lack of geographic diversification, the risks associated with expansion, a lack of marketing experience and activities, risks of franchising, seasonability, the
choice of site locations, development and construction delays, need for additional personnel, increases in operating and food costs and availability of supplies, significant
industry competition, government regulation, insurance claims and the ability of the Company to meet its stated business goals. All subsequent written and oral
forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements.
The following discussion of the results of operations and financial condition should be read in conjunction with the Financial Statements and related Notes thereto included
herein.
Overview
The Company was organized in June 1990 as Bosko's, Inc. under the laws of the State of Delaware. In November 1992 the Company changed its name to Fresh'n Lite, Inc.,
and in November 1995 the Company merged into a Texas corporation also bearing the name Fresh'n Lite, Inc. On September 15, 1998 the Company changed its name to
Restaurant Teams International, Inc. to more accurately reflect the direction management is taking with respect to positioning the Company as a multi-concept holding
company. The Company currently owns and operates seven Tanner's Corner Grills in Atlanta, GA, one Street Talk Cafe restaurants in The Colony, Texas, and Regulatory
Solutions, Inc. of Richardson, Texas.
Results of Operations
Comparison of three month period ended March 31, 1999 and March 31, 2000.
Revenues. Operating revenues for the three month period ended March 31, 1999 were $1,264,726, with an operating income of $179,668.
Operating revenues for the three month period ended March 31, 2000 were $2,142,506, a 69% increase from 1999, with an operating profit of $630,720. The 69% increase
in revenues over 1999 is attributed to the acquisition of the Tanner's restaurants in Atlanta, GA and Regulatory Solutions of Richardson, Texas.
Costs and Expenses. Costs and expenses for the three month period ended March 31, 2000 increased by $426,728 or 39.3% to $1,511,786 as compared to $1,085,058 for
the corresponding period ended March 31, 1999. This was primarily due to the operating expenses associated with the acquisitions. General and Administrative Costs for the
three month period of 2000 increased by 90% to $150,101 as compared to $75,744 in 1999. This increase was primarily due to the development of infrastructure in
anticipation of the future growth and acquisitions. Additionally the Company realized increased professional fees associated with the proposed acquisition of the Fatburger and
the completed acquisitions of the Tanner's chain and Regulatory Solutions.
Net Income. The Company had a net income for the three month period ended March 31, 2000 of $496,991 compared to net loss of $169,101 for the same
Liquidity and Capital Resources
Historically, the Company has required capital to fund the operations and capital expenditure requirements of its Company-owned restaurants.
The Company is currently operating out of cash flow from operations. The Company completed two private placements of A Debentures and B Debentures on May 29, 1998
and June 29, 1998, respectively, providing net proceeds to the Company of $2,670,000. The proceeds were used to fund the Company's expansion strategy of opening
additional Street Talk Cafe restaurants in the Dallas market area.
Year 2000 Compliance
The Company uses current versions of widely used, publicly available software for its accounting, data processing, and point of sale computer requirements. The providers of
the software utilized by the Company have stated that there will be no failures in the programs used by the Company resulting from the year 2000. The Company does not
utilize any customized software. The Company has not yet determined the impact, if any, that year 2000 issued may have on its vendors. However, the Company believes
there are adequate alternative vendors that can supply products and services to the Company if necessary. Finally, the Company's business is not highly dependent upon
electronic data processing. In conclusion, the Company does not believe it is at a material risk from year 2000 issues. |
