ITEM 1. BUSINESS _______________________________________________________________
General
THE COMPANY
National Pizza Company (the "Company" or "Registrant") is the successor to certain Pizza Hut operations commenced in 1962 by O. Gene Bicknell, the Chairman of the Board of the Company.
At March 29, 1994, the Company operated 363 Pizza Hut restaurants and delivery units pursuant to franchise agreements with Pizza Hut, Inc. ("PHI"), a wholly-owned subsidiary of PepsiCo, Inc. The Pizza Hut restaurant system is the largest pizza chain in the world and the Company is the largest Pizza Hut franchisee.
On November 26, 1989, the Company acquired a majority interest in Skipper's, Inc., a corporation based in Bellevue, Washington ("Skipper's"), which at March 29, 1994 operates 188 quick service seafood restaurants in 12 states and franchises 16 units in eight states and 2 units in British Columbia. Pursuant to a merger effective January 12, 1990, Skipper's became a wholly- owned subsidiary of the Company.
On June 8, 1993, the Company signed completed the acquisition of NRH Corporation. NRH was the operator and franchisor of Tony Roma's A Place For Ribs. At March 29, 1994, the Company operated 26 Company restaurants in four states and franchised 105 units in 20 states and 32 units in international locations.
The Company is a Kansas corporation incorporated in 1974 under the name Southeast Pizza Huts, Inc. In 1984, the name of the Company was changed to National Pizza Company. Subject to stockholder approval at the Company's annual meeting of stockholders to be held on July 12, 1994, the Company intends to change its name to NPC International, Inc. Its principal executive offices are located at 720 W. 20th Street, Pittsburg, Kansas and its telephone number is (316) 231-3390.
Financial Information About Industry Segments
The restaurant industry is the only business segment in which the Registrant operates.
PIZZA HUT OPERATIONS
Pizza Hut Restaurant System
The first Pizza Hut restaurant was opened in 1958 in Wichita, Kansas by the original founders of the Pizza Hut system. Pizza Hut, Inc. (PHI), the franchisor of the Company, was formed in 1959.
In 1977, PHI was acquired by PepsiCo, Inc., which continued expanding the Pizza Hut system. The Pizza Hut system is the largest pizza chain in the world, both in sales and number of units. As of December 31, 1993 the Pizza Hut system had over 10,400 restaurants, delivery kitchens and kiosks with locations in all 50 states and many foreign countries. Approximately 60% of the domestic Pizza Hut units are operated by PHI.
Pizza Hut restaurants generally offer full table service and a similar menu, featuring pizza, pasta, sandwiches, a salad bar, soft drinks and, in most restaurants, beer. Most dough products are made fresh several times each day, and only 100% natural cheese products are used. Product ingredients are of a high quality and are prepared in accordance with proprietary formulas established by PHI. The restaurants offer pizza in five sizes with a variety of toppings. Customers may also choose among thin crust, traditional hand-tossed and thick crust pan pizza, as well as Pizza Hut's value-priced BIGFOOT pizza. With the exception of the Personal Pan Pizza, all food products are prepared at the time of order.
Pizza sales account for approximately 85% of the Company's Pizza Hut operations revenues. Sales of alcoholic beverages are less than 2% of net sales.
New product introduction is vital to the continued success of any restaurant system, and PHI maintains a research and development department which develops new products and recipes, tests new procedures and equipment, and approves suppliers for Pizza Hut products. All new products are developed by PHI, and franchisees are prohibited from offering any other products in their restaurants unless approved by PHI.
Pizza Hut also delivers pizza products to their customers. Prior to 1985, most delivery was done out of existing restaurants. In 1985, the system began to aggressively pursue home delivery through delivery / carryout kitchens. Customer orders are made to a computerized customer service center (CSC), a "single unit solution" (SUS, a facility similar to a CSC, but smaller in scale), or directly to the kitchen.
A successful delivery operation yields lower profit margins as a percentage of sales than the Company's Pizza Hut restaurants due to higher labor costs, but the return on invested capital is greater.
The Company's Pizza Hut Operations
The Company is the largest Pizza Hut franchisee in the world and, at March 29, 1994, operated 363 Pizza Hut restaurants and delivery kitchens. The Company's franchise agreements grant to the Company the exclusive right to operate Pizza Hut restaurants in certain designated areas. The Company currently operates restaurants in the states shown in the table below.
On March 1, 1994, the Company completed its acquisition of two Pizza Hut restaurants in Missouri previously operated by another Pizza Hut franchisee. This was the first successful acquisition of another Pizza Hut franchisee since 1988. On March 28, 1994, the Company entered into an agreement in principle to acquire 17 Pizza Hut restaurants from another Pizza Hut franchisee. A related agreement with Pizza Hut, Inc. specifies that eleven of these units will be subsequently exchanged for twelve more PHI-owned restaurants in the Southeast. The transaction is expected to close in June, 1994.
On April 5, 1994, the Company announced the signing of a non- binding memorandum of intent with its franchisor Pizza Hut, Inc., which would involve the exchange of 84 restaurants owned by the Company on March 29, 1994 with 50 units owned by PHI. The Company signed a binding asset exchange agreement with PHI (the "Asset Exchange Agreement Agreement") on June 7 and formally renewed its franchise agreement for a period of 15 years. On the same day, approximately 40 stores, primarily in California, were transferred to PHI as part of the agreement. The remaining exchanges are expected to be completed by August, 1994.
If consummated, the 17 unit acquisition and the PHI asset exchanges will result in a net change in the Company's locations as shown in the table below.
Unit Development
The following table sets forth information concerning the growth in the number of Pizza Hut restaurants and delivery kitchens operated by the Company:
At March 29, 1994, the Company provided delivery services at 80 full-service Pizza Hut restaurants and at 97 delivery-only outlets. Delivery service is provided utilizing a CSC telephone system in ten metropolitan markets: Springfield, Missouri; Hagerstown, Maryland; Bakersfield, California; Montgomery and Birmingham, Alabama; Shreveport, Louisiana; Jackson and Long Beach, Mississippi; Little Rock, Arkansas; and Memphis, Tennessee. Under the CSC system, all customers within the trade area place telephone orders through a single clearing number, and the pizza is dispatched from the Company's delivery kitchen nearest the customer. Customers call the restaurant delivery kitchens directly in other locations.
Relationships with Pizza Hut, Inc.
The Company's franchise agreements with PHI (the "Franchise Agreements") provide, among other things, for standards of operation and physical condition of the Company's restaurants, the provision of services, the geographical territories in which the Company has exclusive rights to open and operate Pizza Hut restaurants and delivery kitchens, the term of the franchise and renewal options, the Company's development rights and obligations and various provisions relating to the transfer of interests in the Company's franchise rights.
PHI determines standards of operation for all Pizza Hut restaurants, including standards of quality, cleanliness and service. Further, the Franchise Agreements allow the franchisor to set specifications for all furnishings, interior and exterior decor, supplies, fixtures and equipment. See "Business - Supplies and Equipment." PHI also has the right to determine and change the menu items offered by, and to inspect all restaurants of, its franchisees, including the Company. All such standards may be revised from time to time. Upon the failure to comply with such standards, PHI has various rights, including the right to terminate the applicable Franchise Agreements, redefine the franchise territory or terminate the Company's rights to establish additional restaurants in that franchise territory. The Franchise Agreements may also be terminated upon the occurrence of certain events, such as the insolvency or bankruptcy of the Company or the commission by the Company or any of its officers, directors or principal stockholders (other than its public stockholders) of a felony or other crime that, in the sole judgment of PHI is reasonably likely to adversely affect the Pizza Hut system, its trademark, the goodwill associated therewith or PHI's interest therein. At no time during the Company's history has PHI sought to terminate any of the Company's Franchise Agreements, redefine its franchise territories or otherwise limit the Company's franchise rights. The Company believes it is in compliance with all material provisions of the Franchise Agreements.
Under the Franchise Agreements, extensive structural changes, major remodeling and renovation and substantial modifications to the Company's restaurants necessary to conform to the then current Pizza Hut system image may be required by PHI, but not more often than once every seven years. The Company has not been required to make any such changes, renovations or modifications. PHI may also request the Company introduce new food products that could require remodeling or equipment changes. PHI can require changes of decor or products only after it has tested such changes in at least 5% of Pizza Hut system restaurants.
PHI is required to provide certain continuing services to the Company, including training programs, the furnishing of operations manuals and assistance in evaluating and selecting locations for restaurants.
In early 1990, PHI offered franchisees the opportunity to sign a new twenty year franchise agreement (the "1990 Franchise Agreement"). The 1990 Franchise Agreement required franchise fees of 4% of sales, as defined, for all restaurants and delivery kitchens and increases in certain advertising contributions. The 1990 Franchise Agreement also sought to redefine certain rights and obligations of the franchisee and franchisor. The 1990 Franchise Agreement did not alter the franchisee's territorial rights and maintained, subject to some minor limitations, the exclusivity of the Pizza Hut brand within the geographical limits of the territory defined by each franchise agreement.
On June 7, 1994, the Company entered into the Asset Exchange Agreement with PHI which in essence conformed the Company's existing Franchise Agreements to the 1990 Franchise Agreement. As part of the Asset Exchange Agreement, the Company will exchange 84 of its operating Pizza Hut restaurants and delivery kitchens for 50 Pizza Hut restaurants and delivery kitchens owned by PHI contiguous to the Company's southeastern operating area and certain additional rights under the 1990 Franchise Agreement. In a related transaction, an additional eleven units acquired from another franchisee would also be exchanged with twelve PHI-owned units, also in the Southeast.
The 1990 Franchise Agreement grants to the Company the exclusive right to develop and operate restaurants within designated geographic areas through March 29, 2010. The Company has the option to renew each Franchise Agreement prior to its expiration for a single renewal term of 15 years by entering into the then- current form of the PHI franchise agreement, including the then- current fee schedules, provided the Company is not then in default of its obligations under that Franchise Agreement, including the development schedule, and has complied with the requirements therof throughout the term of the agreement.
The Franchise Agreements under which the Company operates require the payment of monthly fees to PHI. Under the 1990 Franchise Agreement (as it applies to the Company), the Company's royalty payments for all units owned will increase to 4% of gross sales beginning in July, 1996, from the Company's current effective rate of 2.06%. This rate reflects the royalty rate which was proposed by PHI to Pizza Hut franchisees as part of the 1990 Franchise Agreement and is lower than the rate under PHI's current franchise agreement.
Pizza Huts acquired after the signing of the 1990 Franchise Agreement will continue with the terms and conditions of the acquired units, but are likely to be similar to those found in the 1990 Franchise Agreement signed by the Company.
For the fiscal years ended March 29, 1994, March 30, 1993, and March 31, 1992 the Company incurred total franchise fees payable to PHI of approximately $4,461,000, $4,236,000, and $4,250,000, respectively. The Franchise Agreements require the Company to pay initial franchise fees to PHI in amounts of up to $15,000 for each new restaurant opened. The Company is required to contribute or expend a certain percentage of its sales for local and national advertising and promotion. See "Business - Advertising and Promotion."
Failure to develop a franchise territory as required would give PHI the right to operate Pizza Hut restaurants in that territory. Such failure would not affect the Company's rights with respect to the Pizza Hut restaurants then in operation or under development by the Company in any such territory. The Company is required to obtain the prior written approval of PHI for the location of each new restaurant.
The Franchise Agreements prohibit the transfer or assignment of any interest in the franchise rights granted thereunder or in the Company without the prior written consent of PHI, which consent may not be unreasonably withheld if certain conditions are met. All franchise agreements also give PHI a right of first refusal to purchase any interest in the franchise rights or in the Company if a proposed transfer by the Company or a controlling person would result in a change of control of the Company. PHI also has a right of first refusal with respect to any Pizza Hut franchise right proposed to be acquired by the Company from any other Pizza Hut franchisee. The right of first refusal, if exercised, would allow PHI to purchase the interest proposed to be transferred upon the same terms and conditions and for the same price as offered by the proposed transferee.
The Company has the right to develop additional Pizza Hut restaurants and delivery kitchens in its exclusive franchise territories. However, since going public, expansion by acquisition has been one of the Company's primary methods of growth. After 1990, PHI exercised its right of first refusal as described above on all proposed transactions between the Company and other Pizza Hut franchisees. In March, 1994, the Company received permission to acquire a two-unit franchise in Missouri and to acquire 17 additional units from another franchisee. Pizza Hut, Inc. nevertheless retains the right of first refusal on any proposed acquisition in the future, and the Company cannot be assured it will receive such permission on proposed future acquisitions, if any.
Pizza Hut, Inc., through the Franchise Agreements, requires principals of the Company to maintain "control" over the Company, which PHI defines as 51% of the voting securities of the Company. Accordingly, a portion of the controlling stockholder's shares is restricted to insure compliance with this requirement. Holders of common stock who are not principals of the Company are not subject to any of the restrictions of the Franchise Agreements.
Advertising and Promotion
The Company is required under its Franchise Agreements to be a member of the International Pizza Hut Franchise Holders Association, Inc. ("IPHFHA"), an independent association of substantially all PHI franchisees. IPHFHA requires its members to pay dues, which are spent primarily for national advertising and promotion. Current dues are 2% of restaurant net sales and net delivery sales. Dues may be increased up to a maximum of 3% by the affirmative vote of 51% of the members. A joint advertising committee, consisting of two representatives each from PHI and IPHFHA, directs the national advertising campaign. PHI is not a member of IPHFHA but has agreed to make contributions with respect to those restaurants it owns on a per-restaurant basis to the joint advertising committee at the same rate as its franchisees (less IPHFHA overhead).
The Franchise Agreements also require the Company to participate in cooperative advertising associations designated by PHI on the basis of certain marketing areas defined by PHI. Each Pizza Hut restaurant, including restaurants operated by PHI, contributes to such cooperative advertising associations an amount currently equal to 2% of gross sales. Certain of the Company's Franchise Agreements provide that the amount of the required contribution may be increased at the sole discretion of PHI. The cooperative advertising associations are required to use their funds to purchase only broadcast media advertising within their designated marketing areas. All advertisements must be approved in writing by PHI, except with respect to product or menu item prices.
Supplies and Equipment
The Franchise Agreements require the Company to purchase all equipment, supplies and other products and materials required in the operation of its restaurants and delivery kitchens from suppliers who have been approved by PHI. PepsiCo Food Systems, Inc. ("PFS"), a wholly-owned subsidiary of PepsiCo, offers purchasing and distribution services to the Company and substantially all other Pizza Hut franchisees. Although the Franchise Agreements only require the Company to purchase certain spice blends from PFS or another supplier designated by PHI, the Company currently purchases substantially all of its food products and supplies from PFS and may continue to do so. The Company believes, however, it would not experience difficulties in obtaining its required food products and supplies from other sources. The Franchise Agreements limit the amount of profit that PHI and PFS may realize on sales to Pizza Hut franchisees. PHI is a wholly-owned subsidiary of PepsiCo, Inc., and most of the Pizza Hut units sell Pepsi Cola and other PepsiCo, Inc. beverages, but the Company is not obligated to purchase any such products.
Competition
The restaurant business is highly competitive with respect to price, service, location, food quality and presentation, and is affected by changes in taste and eating habits of the public, local and national economic conditions and population and traffic patterns. The Company competes with a variety of restaurants offering moderately priced food to the public, including other pizza restaurants. The Company also competes with locally-owned restaurants, which offer pizza as well as many other types of popularly priced food. The Company believes other companies can easily enter its market segment, which could result in the market becoming saturated, thereby adversely affecting the Company's revenues and profits. There is also active competition for the type of commercial real estate sites suitable for the Company's restaurants.
In the delivery portion of the segment, Pizza Hut is not currently the dominant concept.
Employees
At March 29, 1994, the Company's Pizza Hut operations had approximately 8,400 employees, including 149 headquarters and staff personnel, two vice presidents, seven regional managers, 46 area general managers, 870 restaurant management employees and approximately 7,326 restaurant employees (of whom approximately 80% are part-time). The Company experiences a high rate of turnover of its part-time employees, which it believes to be normal in the restaurant industry. The Company is not a party to any collective bargaining agreements and believes its employee relations to be satisfactory. The maintenance and expansion of the Company's restaurant business is dependent on attracting and training competent employees. The Company believes that the restaurant manager plays a significant role in the success of its business. Accordingly, the Company has established bonus plans pursuant to which certain of its supervisory employees may earn cash bonuses based upon both the sales and profits of their restaurants.
Trade Names, Trademarks and Service Marks
The trade name "Pizza Hut" and all other trademarks, service marks, symbols, slogans, emblems, logos and designs used in the Pizza Hut system are owned by Pizza Hut, Inc. All of the foregoing are of material importance to the Company's business and are licensed to the Company under its Franchise Agreements for use with respect to the operation and promotion of the Company's restaurants.
Seasonality
The Company's Pizza Hut operations has not experienced significant seasonality in its sales.
SKIPPER'S OPERATIONS
Restaurant Format
Skipper's operates and franchises restaurants primarily under the name Skipper's Seafood 'n Chowder House. Skipper's restaurants feature a limited quick-service menu, featuring fish, shrimp, clams and other seafood items. The nautical decor of the restaurants is casual, suitable for family dining. With its limited-service format, all meal orders are taken at the cash register. Beginning in fiscal 1994, some entrees are cooked in advance and held in a special holding area to maintain food at the proper temperature. Customers pick up these ready-made entrees, as well as their drinks, chowder and salads from the front counter and carry them to their table. If cooked to order, entrees are delivered to the customer when prepared.
The Company operates or franchises restaurants in 12 states and internationally as follows:
Unit Development
The following table sets forth information concerning the growth in the number of Skipper's Company-owned and franchised restaurants.
Menu and Food Preparation
Skipper's emphasizes high quality seafood and poultry products. Food is cooked either at the time or in advance of each order. Much of the necessary food preparation, such as filleting and breading seafood products and preparing clam chowder, is performed on the restaurant premises several times a day.
Seafood entrees on Skipper's menu include fish fillets, scallops, shrimp and clams. All of Skipper's fried entree items are deep fried in pure vegetable shortening. The restaurants also serve baked or broiled fish. Skipper's menu also includes clam chowder, french fried potatoes, baked potatoes, coleslaw, entree salads and fish and chicken sandwiches.
Beer is served at most restaurants. Skipper's believes that beer, which accounts for only a small portion of revenues, is important in attracting and maintaining its adult customer base and increasing food purchases.
Supplies and Equipment
Skipper's ability to maintain consistent quality throughout its chain of restaurants depends upon acquiring food products, other consumables, and other products from reliable sources. To most effectively achieve this consistency and to reduce the costs of products, Skipper's contracts centrally for all major raw food, paper products and other restaurant supplies through its purchasing department. Skipper's negotiates directly with a processor or manufacturer (and will do so on behalf of franchisees if franchisees so desire) and then contracts with a distributor for company-wide distribution. Skipper's also centralizes purchases of restaurant equipment for its company-operated restaurants and for such franchisees as may wish to use this service.
Skipper's is generally not dependent upon any one supplier for availability of its products because its food and other products are available from a number of acceptable sources. Skipper's has a policy of maintaining alternate suppliers for most of its baseline products.
Franchising
Skipper's commenced franchising in 1978 and now has 18 franchised units located in twelve states and British Columbia, Canada.
Skipper's franchise program was designed both for single unit owner/operators and for multi-unit franchise owners who would operate several Skipper's restaurants. There were no outstanding agreements with any franchise owner for the development of additional franchise restaurants at March 29, 1994.
The franchise owners paid an initial franchise fee of $10,000. In addition, Skipper's receives a royalty of 4.725% on the first $500,000 in annual gross revenues and 5% of revenues over $500,000 of each franchise restaurant. In addition to these payments, franchise restaurant owners are also required to pay Skipper's an amount equal to 0.8% of gross revenues for administration of the advertising program.
Skipper's has currently suspended new domestic franchising while it concentrates on concept refinement.
Supervision and Control
Skipper's restaurants are open seven days a week and serve both lunch and dinner. Each of the restaurants has a manager and an assistant manager who are responsible for daily operations of the restaurant, including food preparation, quality control, service, maintenance, personnel, and record keeping. All of the Skipper's restaurant managers have completed a comprehensive management training program. Each area general manager is responsible for approximately six restaurants. Detailed operations manuals reflecting current operations and control procedures are provided to each restaurant and district manager as well as others in the organization.
A point-of-sale cash register system was placed into operation in all company-operated restaurants in 1986. It provides cost savings through the use of detailed product and consumer information. The system provides detailed information daily to assist management in decision making.
Accounting is centralized in Pittsburg, Kansas. Additional financial and management controls are maintained at the individual restaurants, where inventory, labor and food data are recorded to monitor food usage, food waste, labor costs, and other controllable costs.
Advertising
With customer research as an information base, the marketing department directs sales program development, advertising, public relations, field marketing activities, menu pricing and content, restaurant decor and product packaging.
Skipper's advertising programs are developed by the Company's central marketing department and agency. Television, radio and direct mail are the primary advertising media, with a creative focus on product quality and value-pricing.
Competition
In general, the restaurant business is highly competitive and its often affected by changes in taste and eating habits of the public, local and national economic conditions affecting spending habits, population and traffic patterns. The principal basis of competition in the industry is the quality and price of the food products offered. Site selection, quality and speed of service, advertising and attractiveness of facilities are also important.
Skipper's restaurants compete with moderately priced and fast food restaurants located in their respective vicinities as well as seafood chain restaurants in Skipper's market areas.
Employees
At March 29, 1994, Skipper's operations had approximately 2,800 employees including 27 headquarters and staff personnel, 4 regional managers, 27 area general managers, 1 franchise manager, 321 restaurant management employees and approximately 2,420 restaurant employees (of whom approximately 80% are part-time). Skipper's experiences a high rate of turnover of its part-time employees, which it believes to be normal in the restaurant industry. Skipper's is not a party to any collective bargaining agreements and believes its employee relations to be satisfactory.
Trade Names, Trademarks and Service Marks
The trade name "Skipper's" and all other trademarks, service marks, symbols, slogans, emblems, logos, and designs used in the Skipper's restaurant system are of material importance to Skipper's business. Further, Skipper's licenses these marks to its franchisees under its franchise agreements for use with respect to the operation and promotion of their Skipper's restaurants.
Seasonality
Skipper's sales and earnings are usually slightly higher immediately before Christmas and during Lent (March / April).
TONY ROMA'S OPERATIONS
Restaurant Format
Romacorp, Inc. operates and franchises casual-themed restaurants under the name Tony Roma's A Place For Ribs. The restaurants offer a full and varied menu, including ribs, salads, steaks, seafood, chicken and other menu items. The decor of the restaurants is casual, suitable for family dining. Recent renovations and new restaurants feature brighter lighting and decor packages to attract a broader segment of customers. All entrees are prepared to order. The location of the Company-owned and franchised restaurants is as follows:
Romacorp operates two of its restaurants as joint ventures. In general, the Company receives a fee for managing the restaurants and remits to the partners an agreed-upon percentage of gross sales. In the event the restaurants do not generate sufficient cash flow, the Company funds the deficit necessary to provide sufficient working capital and partner distributions.
Unit Development
The following table sets forth information concerning the growth in the number of Tony Roma's Company-owned and franchised restaurants. Information provided for periods prior to the acquisition of Tony Roma's by the Company is reported based on the concept's prior fiscal years.
Menu and Food Preparation
All entrees served at Tony Roma's restaurants are prepared to order. To the extent possible, food is partially prepared in advance to reduce cooking time and assure a pleasurable dining experience. Its menu includes ribs, steak, chicken, seafood, sandwiches and salads. Tony Roma's signature product, barbecued baby back ribs, and other rib dishes account for about 45% of food sales. Guest checks average from approximately $9.00 for lunch and $13.00 for dinner. Alcohol beverages are is served in all restaurants, and accounts for approximately 13% of sales.
Supplies and Equipment
To assure consistent product quality and to obtain quantity discounts, Tony Roma's purchases its food and restaurant equipment from its operations office in Dallas, TX. The Company negotiates directly with meat processors for its ribs inventory, which is maintained in two warehouses in Iowa. Inventory is then shipped to restaurants via two commercial distributors. Produce and dairy products are obtained locally. Tony Roma's food and equipment pricing is also generally available to the franchisee community.
Tony Roma's is generally not dependent upon any one supplier for availability of its products; its food and other products are generally available from a number of acceptable sources. Tony Roma's has a policy of maintaining alternate suppliers for most of its baseline products. The Company does not manufacture any products nor act as a middleman.
Franchising
Although the first Tony Roma's opened in 1972, franchising wasn't a key element of Tony Roma's growth strategy until 1984. At March 29, 1994, the Company had 60 franchisees operating 137 units world wide. The largest franchise holder operates a chain of 10 Tony Roma's restaurants in Japan. Although there are some individual unit franchisees, the Company seeks to attract franchisees who can develop several restaurants.
New domestic franchisees pay an initial franchise fee of $50,000 and a continuing royalty of 4% of gross sales. In addition, franchisees are required to contribute 0.5% of gross sales to a joint marketing account and may be required to participate in local market advertising cooperatives. All potential franchisees must meet certain operational and financial criteria.
In return for the domestic franchisee's initial fee and royalties, the Company provides a variety of services, including: real estate services, including site selection criteria and review/advice on construction cost and administration; architectural services in the form of prototype designs and an in- house design team to help with decor considerations; pre-opening and opening assistance, which include an on-site training team to assist in recruitment, training, organization, inventory planning and quality control; centralized and system-wide purchasing opportunities; in-store managers training programs, coordinated and assisted advertising and marketing programs; and various administrative and training programs developed by the Company.
International franchisees receive a modified version of the above services. Currently, international franchises require an initial fee of $30,000 and royalty rate of 3% of gross sales. International franchise holders also contribute 0.25% to a joint marketing account.
Supervision and Control
Company operated restaurants are typically run by one general manager, two to three assistant managers and a kitchen manager. General managers report to one of seven district managers who, in turn, report to one of two regional managers. All of the Tony Roma's restaurant managers have completed a comprehensive management training program. Detailed operations manuals reflecting current operations and control procedures are provided to each restaurant and district manager as well as others in the organization.
A point-of-sale cash register system is in place in all Company-operated restaurants. It provides cost savings through the use of detailed product and consumer information. The system is polled daily and provides detailed information to assist management in decision making. The Company anticipates installing a new state-of-the-art point of sale system in all Company-owned restaurants in fiscal 1995.
Accounting is centralized in Pittsburg, Kansas. Additional financial and management controls are maintained at the individual restaurants, where inventory, labor and food data are recorded to monitor food usage, food waste, labor costs, and other controllable costs.
Advertising
With customer research as an information base, the marketing department directs sales program development, advertising, public relations, field marketing activities, menu pricing and content, restaurant decor and product packaging.
Competition
The restaurant industry is intensely competitive with respect to price, value, service, location and food quality. Tony Roma's has developed high brand identity within the casual theme segment and is the only national chain to focus on ribs. On a regional basis, the Company competes with smaller chains which also specialize in ribs.
Employees
At March 29, 1994, Tony Roma's operations had approximately 1,300 employees including 28 headquarters and staff personnel, 2 regional managers, 7 district managers, 124 restaurant management employees and approximately 1,138 restaurant employees (of whom approximately 80% are part-time). Tony Roma's is not a party to any collective bargaining agreements and believes its employee relations to be satisfactory.
Trade Names, Trademarks and Service Marks
The trade name "Tony Roma's" and all other trademarks, service marks, symbols, slogans, emblems, logos, and designs used in the Tony Roma's restaurant system are of material importance to its business. The domestic trademark and franchise rights are owned by Romacorp, Inc. and international trademarks/franchise rights are owned by Roma Systems, Inc., a wholly owned subsidiary of Romacorp, Inc. Tony Roma's licenses the use these marks to its franchisees under its franchise agreements for use with respect to the operation and promotion of their Tony Roma's restaurants.
Seasonality
Tony Roma's does not experience significant seasonality in its revenues.
* * * * * * * *
Government Regulation
All of the Company's operations are subject to various federal, state and local laws that affect its business, including laws and regulations relating to health, sanitation, alcoholic beverage control and safety standards. To date, federal and state environmental regulations have not had a material effect on the Company's operations, but more stringent and varied requirements of local governmental bodies with respect to zoning, building codes, land use and environmental factors have in the past increased, and can be expected in the future to increase, the cost of, and the time required for opening new restaurants. Difficulties or failures in obtaining required licenses or approvals could delay or prohibit the opening of new restaurants. In some instances, the Company may have to obtain zoning variances and land use permits for its new restaurants. The Company believes it is operating in compliance with all material laws and regulations governing its operations.
The Company is also subject to the Fair Labor Standards Act, which governs such matters as minimum wages, overtime and other working conditions. A substantial majority of the Company's food service personnel are paid at rates related to the minimum wage and, accordingly, increases in the minimum wage result in higher labor costs.
Legislation mandating health coverage for employees, if passed, will increase benefit costs since most hourly restaurant employees are not currently covered under Company plans. The Company cannot always effect immediate price increases to offset higher costs, and no assurance can be given that the Company will be able to do so in the future.
ITEM 2.
ITEM 2. PROPERTIES __________________________________________________________________
PIZZA HUT OPERATIONS
Pizza Hut restaurants historically have been built according to minimum identification specifications established by PHI relating to exterior style and interior decor. Variation from such specifications is permitted only upon request and if required by local regulations or to take advantage of specific opportunities in a market area.
The distinctive Pizza Hut red roof is the identifying feature of Pizza Hut restaurants throughout the world. Pizza Hut restaurants are generally free-standing, one-story buildings, usually with wood and brick exteriors, and are substantially uniform in design and appearance. Property sites range from 15,000 to 40,000 square feet and accommodate parking for 30 to 70 cars. Typically, Pizza Hut restaurants contain from 1,800 to 3,200 square feet, including a kitchen area, and have seating capacity for 70 to 125 persons.
The cost of land, building and equipment for a typical Pizza Hut restaurant varies with location, size, construction costs and other factors. The Company currently estimates that the average cost to construct and equip a new restaurant in its existing franchise territories (other than Los Angeles) is approximately $450,000 to $550,000, or $700,000 to $900,000 including the cost of land acquisition. The cost to construct and equip a typical new restaurant in the Los Angeles franchise area is approximately $550,000 to $650,000, exclusive of the cost of land acquisition or leasing.
The Company continually renovates and upgrades its existing restaurants. Such improvements generally include new interior decor, expansion of seating areas, and installation of more modern equipment.
The Company anticipates that the capital investment necessary for each delivery-only kitchen is approximately $85,000 in equipment and $35,000 in leasehold improvements. The cost of a customer service center is approximately $100,000 in equipment and improvements.
The Pizza Hut restaurants and delivery units operated by the Company at March 29, 1994, are owned or leased as follows:
The amount of rent paid to unrelated persons is determined on a flat rate basis or as a percentage of sales or as a combination of both. Some leases contain provisions requiring cost of living adjustments.
The Company's Pizza Hut operations also have 13 non-operating locations. Of these, eight are leased from unrelated parties, two are land and buildings owned by the Company, and three are undeveloped parcels of land. The Company intends to sell or sublease these locations.
Rent paid to affiliates is determined as a combination of a flat rate or as a percentage of sales in excess of specified amounts. Generally, the percentage rate is 6% where both land and buildings are leased and 3% where buildings only are leased.
Approximately 185 leases have initial terms which will expire within the next five years. Nearly all of these leases contain provisions allowing for the extension of the lease term.
The Company owns its principal executive and administrative offices in Pittsburg, Kansas, containing approximately 46,000 square feet of commercial office space. In addition, the Company leases from third parties office space for its regional offices in Hagerstown, Maryland; Birmingham, Alabama; Jackson, Mississippi; Springfield, Missouri; West Lake, California; and Gulfport, Mississippi.
SKIPPER'S OPERATIONS
Skipper's selects all company-operated restaurant sites and must approve all franchised restaurant locations. Sites are selected using a screening model to analyze locations with an emphasis on demographics (such as, population density, age and income distribution); analysis of restaurant competition in the area; and an analysis of the site characteristics, including accessibility, traffic counts, and visibility.
Skipper's generally locates its restaurants in commercial/retail areas near residential concentrations rather than downtown business districts. Skipper's favors locations which are in or near regional or district shopping centers and follows a general policy of clustering its restaurants geographically to achieve economies in restaurant supervisory and advertising costs.
The current cost of constructing and equipping a Skipper's restaurant typically ranges from $300,000 to $400,000 for building and land improvements and $135,000 to $185,000 for equipment. The cost of land varies considerably depending on geographic and site location. Land costs vary from $150,000 to $400,000. Skipper's has developed a standardized restaurant design using a free- standing wood frame building to be situated on a one-half acre site. The design is regularly revised and refined.
The 188 Company-operated Skipper's restaurants at March 29, 1994, are owned and leased as follows:
Skipper's also has 30 locations which are not currently used for Skipper's restaurants. Of these, 13 are properties leased from unrelated parties, 11 are land and buildings owned by Skipper's and six are buildings owned on leased land. Skipper's intends to sublease or sell these excess properties.
Most of Skipper's leases contain percentage rent clauses (typically 5% to 6% of gross sales) against which the minimum rent is applied, and most are net leases under which Skipper's pays taxes, maintenance, insurance, repairs and utility costs.
All company-owned restaurant locations are free of major encumbrances.
TONY ROMA'S OPERATIONS
Tony Roma's selects all company-operated restaurant sites, and must approve all franchised restaurant locations. Sites are selected using a screening model to analyze locations with an emphasis on demographics (such as, population density, age and income distribution); analysis of restaurant competition in the area; and an analysis of the site characteristics, including accessibility, traffic counts, and visibility.
The current cost of constructing and equipping a Tony Roma's restaurant typically ranges from $550,000 to $650,000 for building and land improvements and $200,000 to $250,000 for equipment. The cost of land varies considerably depending on geographic and site location. Land costs vary from $500,000 to $800,000. Tony Roma's has developed a standardized restaurant design using a free- standing wood frame building to be situated on a 1-1/2 acre site. The design is regularly revised and refined.
All land and buildings are leased from unrelated parties on the 26 Company-operated Tony Roma's restaurants at March 29, 1994.
Tony Roma's has no excess real estate at March 29, 1994.
Most of Tony Roma's leases contain percentage rent clauses (typically 5% to 6% of gross sales) against which the minimum rent is applied, and most are net leases under which Tony Roma's pays taxes, maintenance, insurance, repairs and utility costs.
All company-owned restaurant locations are free of major encumbrances.
* * * * * *
See Note 7 of Notes to Consolidated Financial Statements for information with respect to the Company's lease obligations included in the 1994 Annual Report to Stockholders for the year ended March 29, 1994 (the "Annual Report "), which is incorporated herein by reference.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS __________________________________________________________________
The Company and its subsidiaries are engaged in ordinary and routine litigation incidental to its business, but management does not anticipate that any amounts which it may be required to pay by reason thereof, net of insurance reimbursements, will have a materially adverse effect on the Company's financial position.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS __________________________________________________________________
There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year ended March 29, 1994.
EXECUTIVE OFFICERS OF THE COMPANY
See item 10, Part III, "Directors and Executive Officers and Directors of the Registrant" of this Form 10-K
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS __________________________________________________________________
"Stockholder Data" on pages 28 of the Annual Report is incorporated herein by reference. Restrictions on the payment of dividends are incorporated herein by reference to Note 4 of the Notes to Consolidated Financial Statements on page 23 of the Annual Report.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA __________________________________________________________________
The "Ten Year Financial Summary" on page 13 of the Annual Report is incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS __________________________________________________________________
"Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 14 to 17 of the Annual Report is incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA __________________________________________________________________
The following financial statements of the Registrant and independent auditor's report set forth on pages 18 to 27 of the Annual Report are incorporated herein by reference:
Consolidated Balance Sheets -- As of March 29, 1994, and March 30, 1993.
Consolidated Statements of Income -- Years ended March 29, 1994, March 30, 1993, and March 31, 1992.
Consolidated Statements of Stockholders' Equity -- Years ended March 29, 1994, March 30, 1993, and March 31, 1992.
Consolidated Statements of Cash Flows -- Years ended March 29, 1994, March 30, 1993, and March 31, 1992.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE __________________________________________________________________
No disagreements on accounting and financial disclosure have occurred.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT __________________________________________________________________
The name, age and background of each of the Company's Directors are contained under the caption "Election of Two Directors" on pages 2 to 3 of the Proxy Statement dated June 13, 1994, for the Annual Meeting of Stockholders to be held on July 12, 1994, as filed with the Securities and Exchange Commission on June 13, 1994 (the "Proxy Statement") is incorporated herein by reference in response to this item.
The executive officers of the Company and their current positions and ages are as follows:
O. Gene Bicknell founded the Company and has served as Chairman of the Board since 1962. He also served as Chief Executive Officer of the Company until July, 1993.
J. Mitchell Boyd joined the Company as President of National Pizza on June 1, 1992 and was appointed Chief Executive Officer in July, 1993. From December, 1989 to June, 1992, Mr. Boyd pursued various personal business interests. From 1986 to December, 1989, he was vice chairman and chief executive officer of Shoney's Inc.
Marty D. Couk joined the Company as a restaurant manager trainee in April, 1979. He served in various capacities at the Company, including Field Specialist (1982), Area General Manager (1983) and Regional Manager (1987). He was promoted to Vice President of Pizza Hut Operations in December, 1992 and Senior Vice President of Pizza Hut Operations in September, 1993.
R. Frank Brown joined the Company as President of Skipper's in September, 1993. For the previous 17 years, he served as vice president of franchising and president of Capt. D's Seafood Restaurants, another quick-service seafood chain.
Gerald A. Brunotts joined the Company in May, 1993 to serve as President of NRH Corporation (now Romacorp, Inc.), owner and operator of Tony Roma's. From January, 1990 until May, 1993, Mr. Brunotts was a consultant to the restaurant industry. Prior to that, he was a Vice President with Shoney's Inc.
Robert M. McDevitt joined the Company as Vice President Marketing in August, 1992. From 1990 to 1992, he was vice president marketing with Host Communications. Prior to that, Mr. McDevitt was senior vice president marketing with Long John Silvers, operator of a quick service seafood chain. Mr. McDevitt terminated with the Company in May, 1994.
James K. Schwartz was appointed Vice President Finance, Treasurer, Assistant Secretary and Chief Financial Officer in January, 1993. He joined the Company in October, 1991 and served as Vice President Accounting and Administration. Prior to that, Mr. Schwartz was a manager with the international accounting firm of Ernst & Young. He is a certified public accountant.
David G. Short joined the Company in June, 1993 as part of the NRH Corporation acquisition and was appointed to Vice President Legal and General Counsel in July, 1993. He was vice president, legal and general counsel for NRH Corporation since September, 1990 and, previous to that, vice president-legal, general counsel and secretary of TGI Fridays, Inc.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION __________________________________________________________________
"Executive Compensation" on pages 5 to 9 of the Proxy Statement is incorporated herein by reference in response to this item.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT __________________________________________________________________
"Principal Stockholders" and "Stock Ownership of Directors and Management" on pages 2 and 5 of the Proxy Statement are incorporated herein by reference in response to this item.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS __________________________________________________________________
At March 29, 1994, the Company leased five properties from O. Gene Bicknell, Chairman, and one property from Gordon W. Elliott, Vice Chairman, at rental rates comparable to terms obtained from unrelated lessors. Rent expense under these leases for fiscal 1994 was $222,000. Rental paid to affiliates is determined as a combination of a flat rate or as a percentage of sales in excess of specified amounts. The percentage rate is 6% where both land and buildings are leased and 3% where buildings only are leased.
The Board of Directors in January, 1993, authorized the purchase of certain real estate comprised principally of ten Pizza Hut restaurants owned by Mr. Bicknell. The Company engaged an outside appraisal company to perform a MAI appraisal of the properties. The Board of Directors, upon review of the proposal and the appraisals, and with Mr. Bicknell abstaining from any participation in the vote, approved the purchase of these sites for the appraised values. At March 29, 1994, the Company had completed all transactions on these properties. Due to the delay in processing the sale of the final two properties, the Company extended a $1,000,000 loan to Mr. Bicknell during the fiscal year ended March 29,1994, all except $50,000 of which was repaid by year end.
During the fiscal year ended March 26, 1991, the Company and one of its executives entered into a joint venture agreement to purchase a business aircraft for approximately $2,000,000. The purchase was funded 25% and 75% by the Company and the executive, respectively. During the fiscal year ended March 29, 1994 the Company incurred rental expense under the month-to-month lease of $258,000. Management believes the lease is at least as favorable as could be obtained from unrelated parties.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K __________________________________________________________________
(a) List of Documents filed as part of this Report
1) Financial Statements
All financial statements of the registrant as set forth under Item 8 of this Report on Form 10-K.
2) Financial Statement Schedules
Schedules other than those listed above are omitted because they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto. Columns omitted from schedules filed have been omitted because the information is not applicable.
3) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
Page Number or Exhibit Incorporation Number Description by Reference to
3.1 Restated Articles of Incorporation Exhibit 3(a) to Form S-1 Registration Statement effective August 14, 1984 File #2-91885
3.2 Certificate of Amendment to Amended by Form 8 filed Restated Articles of Incorporation May 30, 1991 dated August 7, 1986, Certificate of Amendment to Restated of Articles of Incorporation dated July 31, 1987 and Certificate of Change of Location of Registered Office dated October 20, 1987
3.3 Bylaws Exhibit 3(b) to Form S-1 Registration Statement effective August 14,1984 File #2-91885
4.1 Specimen Stock Certificate Exhibit 4 to Form S-1 Registration Statement effective August 14, 1984 File #2-91885
4.2 Specimen Stock Certificate Exhibit 4.2 to Form 10-K For Class B Common Stock filed June 16, 1992
10.1 Standard Form of Superseding Exhibit 10(a) to Form S-1 Franchise Agreement between Registration Statement the Company and Pizza Hut, Inc. effective August 14, 1984 dated July 20, 1981 File #2-91885
10.2 Schedule of Superseding Exhibit 10(b) to Form S-1 Franchise Agreements Registration Statement effective August 14, 1984 File #2-91885
10.3 Franchise Agreement between Exhibit 10(c)(1) to Form the Company and Pizza Hut, Inc. S-1 Registration Statement dated January 1, 1983 for the effective August 14, 1984 West Los Angeles, California File #2-91885 franchise territory
10.4 Letter Agreement dated February Exhibit 10(c)(2) to Form 10, 1984 between the Company and S-1 Registration Statement Pizza Hut, Inc. for the Los effective August 14, 1984 Angeles County franchise territory File #2-91885
10.5 Blanket Amendment to Franchise Exhibit 10(d) to Form S-1 Agreements Registration Statement effective August 14, 1984 File #2-91885
10.6 Second Blanket Amendment to Exhibit 10(d)(2) to Form Franchise Agreements dated S-1 Registration Statement as of November 18, 1985 effective November 27, 1985; File #33-1588
10.7 Leases between the Company and Exhibit 10(e) to Form S-1 Messrs. Bicknell and Elliott Registration Statement effective August 14, 1984 File #2-91885
10.8 Note Purchase Agreement Exhibit 10(r) to Form 10-Q between National Pizza Company filed August 4, 1988 as Seller and the Prudential Insurance Company of America and Pruco Life Insurance Company as Purchasers dated June 29, 1988
10.9 Note Agreement between National Exhibit 10(u) to Form 10-K Pizza Company and the Prudential filed June 25, 1990 Insurance Company of America dated January 25, 1990
10.10 Note Agreement between National Exhibit 10.10 to Form 10-K Pizza Company and Prudential Life for the year ended Insurance Company of America March 26, 1991 dated March 13, 1991
10.11 National Pizza Company 1984 Exhibit 10(t) to Form 10-K Amended and Restated Stock filed June 25, 1990 Option Plan
10.12 Form of Franchise Agreement Exhibit 10(x) to Form 10-K between Skipper's, Inc. and filed June 25, 1990 its franchisees
10.13 Amended and Restated Revolving Exhibit 10(u) to Form 10-Q Credit Agreement among National filed February 9, 1990 Pizza Company, Continental Bank, N.A., Bank of Oklahoma, N.A., The Bank of Tokyo Trust Company and Continental Bank, N.A., as Agent, dated November 17, 1989
10.14 Second Amendment to Amended Exhibit 10.14 to Form 10-K and Restated Revolving Credit for the year ended Agreement among National Pizza March 26, 1991 Company, Continental Bank, N.A., The Bank of Tokyo Trust Company, U.S. Bank of Washington, National Association, and Continental Bank, N.A., as Agent, dated February 5,
10.15 Airplane Lease between O. Gene Exhibit 10.24 to Form 10-K Bicknell as Lessor and National for the year ended Pizza Company as Lessee dated March 26,1991 May 9, 1990
10.16 Pyramid Project Pizza Hut Food Exhibit 10.16 to Form 10-K and Beverage Agreement dated filed June 16, 1992 August 9, 1991
10.17 Pyramid Project Pizza Hut Exhibit 10.17 to Form 10-K Concessions Agreement dated filed June 16, 1992 August 9, 1991
10.18 Interim Mud Island Food and Exhibit 10.18 to Form 10-K Beverage Concession Agreement filed June 16, 1992 dated May 4, 1992
10.19 Senior Note Purchase Agreement Exhibit 10.19 to Form 10-K made by and between PM Group filed June 16, 1992 Life Insurance Company, Pacific Mutual Life Insurance Company, and Massachusetts Mutual Life Insurance Company and National Pizza Company dated May 15, 1992 (sample document)
10.20 Third Amendment to Amended Exhibit 10-20 to Form 10-K & Restated Revolving Credit for the year ended Agreement among National Pizza March 30, 1993 Company, Continental Bank, N.A., The Bank of Tokyo Trust Company, U.S. Bank of Washington, National Association, and Continental Bank, N.A., as Agent, dated June 1, 1992
10.21 Fourth Amendment to Amended Exhibit 10.21 & Restated Revolving Credit to Form 10-K for the Agreement among National Pizza year ended March 30, 1993 Company, Continental Bank, N.A., The Bank of Tokyo Trust Company, U.S. Bank of Washington, National Association, and Continental Bank N.A., as Agent, dated October 1,
10.22 Fifth Amendment to Amended Exhibit 10.22 & Restated Revolving Credit to Form 10-K for the Agreement among National Pizza year ended March 30, 1993 Company, Continental Bank, N.A. The Bank of Tokyo Trust Company U.S. Bank of Washington, National Association, and Continental Bank N.A., as Agent, dated May 28, 1993
10.23 Sixth Amendment to Amended Exhibit 10.23 & Restated Revolving Credit to Form 10-K for the Agreement among National Pizza year ended March 30, 1993 Company, Continental Bank, N.A., The Bank of Tokyo Trust Company U.S. Bank of Washington, National Association, and Continental Bank N.A., as Agent, dated June 11, 1993
10.24 Real Estate Purchase Agreement Exhibit 10.24 between the Company and O. Gene to Form 10-K for the Bicknell regarding the sale year ended March 30, 1993 of eight Maryland properties dated March 30, 1993
10.25 Profit Sharing Plan of National Pizza Exhibit 10.25 Company dated July 1, 1992 and to Form 10-K for the First Amendment dated January 1, 1993 year ended March 30,
10.26 Senior Note Purchase Agreement made Exhibit 10.26 by and between Pacific Mutual Life to Form 10-K for the Insurance Company, Pacific Corinthian year ended March 30, 1993 Life Insurance Company, Lutheran Brotherhood and National Pizza Company dated March 30, 1993
10.27 Stock Purchase Agreement dated Exhibit B to Form 8-K May 18, 1993 by and among National filed May 28, 1993 Pizza Company, NRH Corporation and selling stockholders
10.28 Amendment #1 to the Stock Purchase Exhibit A to Form 8-K Agreement relating to the sale of filed June 23, 1993 NRH Corporation dated June 9, 1993
10.29 Second Amendment dated October 19, Exhibit 10.29 1993, to the Profit Sharing Plan of to Form 10-K for the National Pizza Company year ended March 29, 1994
10.30 Seventh Amendment to Amended Exhibit 10.30 & Restated Revolving Credit to Form 10-K for the Agreement among National Pizza year ended March 29, 1994 Company, Continental Bank, N.A., The Bank of Tokyo Trust Company U.S. Bank of Washington, National Association, and Continental Bank N.A., as Agent, dated December 20, 1993.
10.31 Asset Exchange Agreement by Exhibit 10.31 and among National Pizza to Form 10-K for the Company, Pizza Hut, Inc. and year ended March 29, 1994 Pizza Hut of San Diego, Inc. dated June 7, 1994
11 Statement regarding computation of per Exhibit 11 share earnings for the year ended to From 10-K for the March 29, 1994, March 30, 1993, and year ended March 29,1994 March 31, 1992.
13 1994 Annual Report to Stockholders Exhibit 13 to Form 10-K for the year ended March 29, 1994
21 List of Subsidiaries Exhibit 21 to Form 10-K for the year ended March 29, 1994
23.1 Consent of Ernst & Young Exhibit 23.1 to Form 10-K for the year ended March 29, 1994
99 Proxy Statement for Annual Meeting Definitive proxy of Stockholders to be held filed June 13, 1994 July 12, 1994 via EDGAR
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the fiscal quarter ended March 29, 1994.
SIGNATURES __________________________________________________________________
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on the 13th day of June, 1994 on its behalf by the undersigned, thereunto duly authorized.
NATIONAL PIZZA COMPANY
By James K. Schwartz Vice President, Chief Financial Officer, Treasurer, Assistant Secretary (Principal Financial Officer)
By Douglas K. Stuckey Corporate Controller (Chief Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on the 13th day of June, 1994.
O. Gene Bicknell Chairman of the Board and Director
Gordon W. Elliott Vice Chairman and Director
J. Mitchell Boyd President, Chief Executive Officer and Director (Principal Executive Officer)
James K. Schwartz Vice President Finance, Chief Financial Officer, Treasurer and Assistant Secretary (Principal Financial Officer)
David G. Short Secretary
Fran D. Jabara Director
Robert E. Cressler Director
John W. Carlin Director
[FN] NOTES (1) On June 8, 1993, National Pizza Company acquired the stock of NRH Corporation, owner/franchisor of Tony Roma's. Approximately $11,763,000 of the purchase price was allocated to fixed assets in the following amounts: $6,879,000 to leasehold improvements; $4,470,000 to furniture and equipment; and $414,000 to construction in progress.
(2) Represents completion of construction.