ITEM 1. BUSINESS - -----------------
GENERAL AND DEVELOPMENTS DURING FISCAL YEAR 1995
The Company owns and operates or franchises a total of 150 restaurants, including 80 owned and 60 franchised casual dining, full-service restaurants under the name "Pizzeria Uno...Chicago Bar & Grill." The Pizzeria Uno restaurants offer a diverse, high-quality menu at moderate prices in a casual, friendly atmosphere. The restaurants feature the Company's signature Chicago-style deep- dish pizza and a selection of entrees, including thin crust pizza, pasta, fajitas, ribs, steak and chicken, as well as a variety of appetizers, salads, sandwiches and desserts. The Company's restaurants average approximately 6,200 square feet with seating for an average of approximately 180 guests. For the fiscal year ended October 1, 1995, Company-owned restaurants averaged $1,925,000 in sales. Company-owned restaurants are located predominantly in the Northeast and Mid- Atlantic states, and franchised restaurants are located throughout the United States.
In fiscal 1993, the Company began implementing strategic initiatives intended to strengthen its position in casual dining and to distinguish its restaurants from quick service pizza, pizza and pasta, and full-service Italian restaurants. As part of this strategy, during fiscal 1994, the Company invested approximately $2.5 million in new kitchen capabilities, including saute stations, grills and fryers, for its Company-owned restaurants enabling the Company to enhance the quality, breadth and appeal of its non-pizza menu items. To better communicate its concept and broadened menu to consumers, the Company refined the name of its restaurants to Pizzeria Uno ...Chicago Bar & Grill and upgraded the design and decor of its restaurants to be consistent with its casual dining theme. In addition, in fiscal 1993, the Company increased the size of its deep-dish pizzas to provide greater value and added additional restaurant managers in many of its higher volume units to improve overall service. The Company believes these strategic initiatives directly contributed to an increase in its average guest check and increases in comparable store sales of 3.3% in fiscal 1995.
The Company recently has been expanding its channels of distribution to capitalize on the Pizzeria Uno brand name and the appeal of its signature Chicago- style deep-dish pizza. Currently, the Company is distributing refrigerated and frozen Chicago-style deep-dish pizza to approximately 900 supermarkets, primarily in New England, for sale in their fresh deli counters and frozen food sections. Since January 1993, the Company has also been supplying frozen Pizzeria Uno brand, Chicago-style deep-dish pizza to American Airlines for service on its flights. Approximately 1.7 million Pizzeria Uno brand pizzas were served aboard American Airlines flights during fiscal 1995. The Company is testing a similar pizza product at Pizzeria Uno kiosks in 14 General Cinema theaters. The Company also operates four neighborhood, limited-seating take-out units under the name "Uno...Pizza Takery." These units are located in strip centers, occupy approximately 2,000 square feet and offer limited seating for up to 40 customers.
The Company acquired the rights to the name "Pizzeria Uno" from the late Ike Sewell, who opened the original Pizzeria Uno restaurant in Chicago, Illinois in 1943 and is considered the originator of Chicago-style deep-dish pizza. The Company opened its first Pizzeria Uno restaurant in 1979.
During the fiscal year ended October 1, 1995, the Company opened 16 full-service Company-owned restaurants, and exchanged ownership of its restaurant in Fairview Heights, Illinois for a competitor s restaurant in Orlando, Florida. Five franchised restaurants opened during the fiscal year, and five closed.
During the fiscal year ending September 29, 1996, the Company anticipates opening up to 12 Company-owned full-service restaurants and up to 10 franchised restaurants. The timing of these planned openings is subject to various factors, including locating satisfactory sites and negotiating leases and franchise agreements.
In December, 1994, the Company purchased three Bay Street Grill restaurants located in Schaumburg, Illinois; Woodbridge, New Jersey; and Philadelphia, Pennsylvania. The three full-service, casual dining restaurants, which specialize in seafood, generated total annual sales of $6.6 million during fiscal 1995. The Company has no current plans to open additional Bay Street Grill restaurants.
In December 1994, the Company obtained a $50 million unsecured, revolving credit and term loan facility through Fleet Bank. The new facility replaced a $20 million unsecured revolving credit facility. The new revolving credit facility will convert to a three year term loan in December 1997, and advances under this agreement will accrue interest at either the bank's prime rate plus .25%, or alternatively, at 100-150 basis points above LIBOR.
On October 26, 1995, the Company entered into a five year interest rate swap agreement with Fleet Bank involving the exchange of floating rate interest payment obligations for fixed rate interest payment obligations. The notional amount of this interest rate swap agreement was $20 million. The Company entered into this agreement in order to manage interest costs and risks associated with fluctuating interest rates.
The Board of Directors of the Company declared a 25% stock split on November 15, 1994 payable in the form of a stock dividend on February 28, 1995 to the stockholders of record of the Company on February 8, 1995. The stock split resulted in one additional share of Common Stock being issued for each four shares of Common Stock issued and outstanding on the record date. Cash was issued in lieu of fractional shares.
During June 1995, the Company completed a secondary public equity offering of 2.3 million shares of its Common Stock underwritten by Montgomery Securities. The Company received $22.6 million in net proceeds from the offering.
In October 1995, the Board of Directors of the Company authorized the repurchase of up to a total of 1.5 million shares of the Company s Common Stock in the market from time to time during the subsequent six months. This superseded the Board of Directors previous authorization in July 1995 for the repurchase of up to a total of 500,000 shares of the Company's Common Stock. As of November 30, 1995, the Company had repurchased a total of 494,100 shares of its Common Stock at prices between $7.00 and $8.25 per share.
RESTAURANT CONCEPT AND MENU
Pizzeria Uno restaurants are full-service, casual dining restaurants, featuring the Company's signature Chicago-style deep-dish pizza and a diverse menu of high quality, moderately-priced menu items. The Company's target market is middle to upper-middle income individuals in the 17 to 49 year-old age group. The restaurants are
generally open from 11:00 a.m. to midnight, seven days per week.
The restaurants feature the Company's signature Chicago-style deep-dish pizzas and a selection of entrees, including thin crust pizza, pastas, fajitas, ribs, steak and chicken, as well as a variety of appetizers, salads, sandwiches and desserts. The Company's signature product, its Chicago-style, deep-dish pizza, filled with ingredients such as fresh meats, spices, vegetables and real cheeses, is baked according to proprietary recipes. The Company believes that its proprietary recipes produce a superior pizza that is difficult to duplicate. In fiscal 1994, the Company invested approximately $2.5 million in new kitchen capabilities, including saute stations, grills and fryers, for its Company-owned restaurants enabling the Company to enhance the quality, breadth and appeal of its non-pizza items. At the end of fiscal 1995, the Company's average check per guest for full service Company-owned restaurants was approximately $9.50. For fiscal 1995, sales of alcoholic beverages accounted for approximately 18% of total restaurant sales.
RESTAURANT DESIGN AND SITE SELECTION
The Company has recently upgraded the design and decor of its restaurants to be consistent with its theme as "Pizzeria Uno...Chicago Bar & Grill." Pizzeria Uno restaurants are designed and decorated to provide a friendly and comfortable atmosphere expected of full-service, casual dining restaurants and distinguished from typical pizza restaurants. The decor of each restaurant emphasizes quality with wood, brick and brass. To ensure quality and compliance with Company standards, preliminary exterior design and complete interior and kitchen design for all Company-owned and franchised restaurants are prepared by the Company. The Company's current prototype free-standing restaurant occupies approximately 6,400 square feet, with a seating capacity of approximately 200 customers.
The Company considers the specific location of a restaurant to be critical to its long-term success and devotes significant effort to the investigation and evaluation of potential sites. One or more of the Company's executive officers inspect and approve the site for each Company-owned and franchised restaurant. Within each target market area, the Company evaluates population density and demographics, major retail and office concentration and traffic patterns. In addition, the Company evaluates visibility, accessibility, proximity to direct competition and various other site specific factors. Pizzeria Uno restaurants are located in both urban and suburban markets, in free-standing buildings, strip centers and malls. Restaurant development is currently targeted at high profile, free-standing locations.
Historically, the Company has leased most of its restaurants to minimize investment costs. Since fiscal 1992, however, the Company began selectively purchasing real estate to develop new restaurants where available and when the expected long-term cost of owning the real estate is less than the cost of leasing. Of the 88 Company-owned restaurants open as of November 30, 1995, 74 are located in leased facilities and 14 are fee owned properties. See "Item 2.

ITEM 2. PROPERTIES - -------------------
The Company owns a 30,000 square foot production plant in Brockton, Massachusetts. The production plant produces frozen product for service aboard American Airlines flights, as well as fresh, refrigerated pizzas that are sold at deli counters in approximately 900 supermarkets in New England, New York, New Jersey, Pennsylvania and Ohio. This facility provides sufficient capacity to support double the level of sales achieved in fiscal 1995. See "ITEM 1. Other Business Development."
Prior to fiscal 1992, all Company-owned restaurants were located in leased space. However, during fiscal 1992, the Company purchased real estate to develop new restaurants in Portland, Maine, Lynnfield, Massachusetts and Hyannis, Massachusetts, and also purchased the real estate related to its three urban Chicago restaurants; during fiscal 1993 the Company purchased real estate to develop new restaurants in Orlando, Florida; during fiscal 1994 in Amherst, New York, and Paoli and Franklin Mills, Pennsylvania; and in fiscal 1995, in Potomac, Virginia, Schaumburg, Illinois, Denver, Colorado and Williamsburg, Virginia. During fiscal 1996, the Company intends to purchase approximately four additional restaurant properties.
The leases for Company-owned restaurants typically have initial terms of 20 years with certain renewal options and provide for a base rent plus real estate taxes, insurance and other expenses, plus additional percentage rents based on revenues of the restaurant. All of the Company's franchised restaurants are in space leased from parties unaffiliated with the Company, with the exception of one franchised restaurant which is subleased from the Company. Franchised restaurant leases typically have lease terms through the initial term of the franchise agreements.
One of the Company-owned restaurants in Boston, Massachusetts is located on the first floor of a six-story office building owned by Aaron D. Spencer, Chairman and Chief Executive Officer of the Company. Mr. Spencer has leased the entire building to the Company pursuant to a five-year lease, ending on March 29, 1997, at a rent of $162,000 per year. The rent will be increased by 12% of the cost of any improvements to the building made by Mr. Spencer. The Company is responsible for all taxes, utilities, insurance, maintenance and repairs. The lease may be terminated by either the Company or Mr. Spencer upon six months prior notice. If Mr. Spencer or the Company terminates the lease, a new lease between the Company and Mr. Spencer relating only to the restaurant space of the building will become effective immediately. The new lease will have a five-year term with two five-year renewal options. Rent under the new lease will be 6.5% of total restaurant revenues but with a minimum rent, determined by independent appraisal, equal to the fair market rent at the time the new lease becomes effective. The Company currently sublets all but the restaurant space at rents which approximate the $162,000 annual rent that it is obligated to pay Mr. Spencer. Management believes that the terms of both the existing lease and the new lease which will become effective upon termination of the existing lease are comparable to those otherwise available in the real estate market.
The Company's executive offices are located in two adjacent buildings in West Roxbury, Massachusetts. The first, a three-story building owned by Mr. Spencer, is leased to the Company pursuant to a five-year lease, commencing on March 30, 1987, with options to renew for two additional five-year periods. Rent during the initial term of the lease was $30,000 per year. Currently, the first of the two five-year options has been exercised at a rate of $36,000 per year. During the final option period, rent will be equal to fair market rent, but may not be less than the rent under the lease during the immediately preceding term. The value of any leasehold improvements made by the Company will not be considered in determining fair market
value rent. The Company added the third floor to the building. The Company is responsible for all taxes, utilities, insurance, maintenance and repairs. The second, a two-story building owned by Mr. Spencer's children, is also leased to the Company pursuant to a 15 year lease commencing on February 1, 1990, with options to renew for three additional five-year periods. Rent during the first five years of the initial term of the lease was $106,800 per year, increasing to $128,160 per year for the next five years, and to $153,792 for the final five years of the initial term of the lease. The Company is responsible for all taxes, utilities, insurance, maintenance and repairs. Rent during any option period will be 120% of the rent for the prior term of the lease. Management believes that the terms of the leases for the two offices are as favorable as otherwise available in the real estate market. With the two buildings, the executive offices currently consist of approximately 25,000 square feet and house the Company's executive, administrative and clerical offices.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS - --------------------------
As of November 30, 1995, the Company was not a party to any material pending legal proceedings other than ordinary routine litigation incidental to the Company's business.
ITEM 4.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS - ------------------------------------------------------------------------------
NUMBER OF STOCKHOLDERS
As of October 1, 1995, there were approximately 4,300 beneficial owners of the Company's Common Stock.
DIVIDENDS
The Company has never paid any cash dividends on its Common Stock and for the foreseeable future intends to continue its policy of retaining earnings to finance the development and growth of the Company. The Board of Directors may reconsider this policy from time to time in light of conditions then existing, including the Company's earnings performance, financial condition and capital requirements. Pursuant to both the private placement in June 1990 of $10 million of senior, unsecured notes with a major insurance company, and a $50 million unsecured revolving and term credit agreement obtained in December 1994, the Company became subject to various financial and operating covenants, including limitations on the payment of cash dividends. The most restrictive limitations, in general, preclude the Company from paying cash dividends, if such payment, when aggregated with certain other payments, would exceed 35% of net income for the then most recent four-quarter period or would cause certain net tangible asset and debt ratios to be exceeded.
On November 15, 1994, the Board of Directors declared a five-for-four stock split effected in the form of a stock dividend paid in shares of the Company s Common Stock on February 28, 1995 to stockholders of record on February 8, 1995.
- 19 -
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------------------------------------------------------------------------ RESULTS OF OPERATIONS ---------------------
FISCAL YEAR 1995 COMPARED TO FISCAL YEAR 1994
Total revenues increased 28% to $158.7 million in fiscal 1995 from $124.1 million the prior year. Company-owned restaurant sales increased 29.7% to $146.1 million due primarily to a 21.4% increase in operating weeks of full-service Pizzeria Uno restaurants resulting from the addition of 16 restaurants during the past four quarters, as well as the purchase of three Bay Street Grill restaurants in December 1994. The increase in restaurant sales was also due to a 3.3% increase in comparable store sales for the 52 weeks ended October 1, 1995.
Consumer product sales increased 14.3% to $8.5 million from $7.4 million in fiscal 1994 due to higher sales of Pizzeria Uno brand and private label refrigerated pizza, as well as increased shipments of frozen pizza for tests by customers outside New England.
Franchise income increased 3.9% to $4.1 million in fiscal 1995 from $4.0 million the prior year. Royalty income increased 4.7% to $4.0 million principally due to an increase in comparable store sales of 2.4% for the year. Initial franchise fees totaled $125,000 for fiscal 1995 compared to $150,000 in fiscal 1994.
Cost of food and beverages as a percentage of restaurant and consumer product sales increased to 25.5% for fiscal 1995 from 25.1% the prior year. This percentage cost increase primarily reflected changes in sales mix toward a larger percentage of higher-cost non-pizza menu items.
Labor and benefits as a percentage of restaurant and consumer product sales decreased slightly to 30.6% for fiscal 1995 from 30.8% the prior year, principally due to the leverage of higher comparable store sales.
Occupancy costs as a percentage of restaurant and consumer product sales declined to 14.8% for fiscal 1995 from 15.8% the prior year, primarily due to an increased number of owned restaurant properties and the operating leverage provided by the increase in comparable store sales noted above.
Other operating costs declined as a percentage of restaurant and consumer product sales to 8.8% for fiscal 1995 from 9.0% the prior year, principally due to the operating leverage provided by the increase in comparable store sales.
General and administrative expenses decreased as a percentage of total revenues to 7.1% for fiscal 1995 from 7.5% the prior year as a result of allocating certain fixed expenses over a larger revenue base.
Depreciation and amortization expenses as a percentage of restaurant and consumer product sales increased to 7.0% for fiscal 1995 from 6.4% the prior year, principally due to increased amortization of pre-opening costs associated with the higher rate of unit growth.
Operating income increased 30.0% to $13.4 million for fiscal 1995 compared to $10.3 million in fiscal 1994. The operating profit margin improved slightly to 8.4% from 8.3%, primarily as a result of the increase in Company-owned restaurants and comparable store sales.
Other expense increased to $1,944,000 or 1.2% as a percentage of total revenues in fiscal 1995 from $845,000 or .7% of total revenues the prior year. This increase was due to higher interest expense associated with the increased level of debt used to fund the Company's accelerated expansion plan and its ownership of an increasing number of restaurant properties. In addition, other expense in the comparable period in 1994 was favorably affected by a $312,000 gain on the sale of a restaurant to a franchisee.
The effective income tax rate declined to 37% for fiscal 1995 from 39.1% in fiscal 1994, primarily due to the effect of the FICA tip tax credit, which became effective on January 1, 1994 and generally lower state income taxes.
FISCAL YEAR 1994 COMPARED TO FISCAL YEAR (53 WEEKS) 1993
Total revenues increased 13.9% to $124.1 million in fiscal 1994 from $108.9 million in the prior year. Company-owned restaurant sales increased 14.7% to $112.7 million in fiscal 1994 due primarily to a 9.4% increase in operating weeks of full-service restaurants resulting from the addition of eight new restaurants, and a 6.5% increase in comparable store sales.
Consumer product sales increased 4.9% to $7.4 million in fiscal 1994 from $7.1 million in the prior year primarily due to expanded sales of private label, thin-crust pizzas to several supermarket chains in New England. Initial shipments
of both refrigerated and frozen Pizzeria Uno brand pizzas commenced in fiscal 1994 to new customers in New York, New Jersey, Pennsylvania and Ohio in order to expand the Company's regional presence beyond New England.
Franchise income increased 9.2% to $4.0 million in fiscal 1994 from $3.6 million in the prior year. Royalty income increased 9.5% to $3.8 million in fiscal 1994 from $3.5 million in the prior year primarily due to an increase of 7.1% in average unit sales. Initial franchise fees totaled $150,000 in fiscal 1994 compared to $147,500 in fiscal 1993.
Cost of food and beverages as a percentage of restaurant and consumer product sales increased to 25.1% in fiscal 1994 from 24.7% in the prior year, reflecting primarily changes in sales mix toward a larger percentage of higher cost non-pizza menu items.
Labor and benefits as a percentage of restaurant and consumer product sales decreased slightly to 30.8% in fiscal 1994 from 31.3% in the prior year, principally due to the leverage of higher comparable store sales.
Occupancy costs as a percentage of restaurant and consumer product sales declined to 15.8% in fiscal 1994 from 16.4% in the prior year, resulting from the Company's purchase of the real estate for several restaurants since fiscal 1992, and the operating leverage provided by the increase in comparable store sales.
Other operating costs as a percentage of restaurant and consumer product sales were 9.0% for fiscal 1994, remaining relatively unchanged from 8.7% in the prior year.
General and administrative expenses decreased as a percentage of total revenues to 7.5% in fiscal 1994 from 7.6% in the prior year, principally due to the allocation of certain fixed expenses over a larger revenue base.
Depreciation and amortization expenses as a percentage of restaurant and consumer product sales decreased to 6.4% in fiscal 1994 from 6.8% in the prior year principally due to the increase in comparable store sales.
Operating income increased 27.3% to $10.3 million in fiscal 1994 from $8.1 million for the prior year. The operating profit margin increased to 8.3% in fiscal 1994 from 7.4% in the prior year, principally due to an increase in Company-owned restaurants and comparable store sales.
Other expense declined to $845,000 in fiscal 1994 from $1.1 million in the prior year, principally due to a $312,000 gain on the sale of a restaurant to a franchisee in fiscal 1994.
The effective income tax rate declined to 39.1% in fiscal 1994 from 40.5% in fiscal 1993, primarily due to the FICA tip credit, which became effective on January 1, 1994.
Historically, the Company has leased most of its restaurant locations and pursued a strategy of controlled growth, financing its expansion principally from operating cash flow, equity offerings and from the sale of senior, unsecured notes and short-term borrowing under revolving lines of credit. During fiscal 1995, the Company's investment in property, equipment and leasehold improvements was $39.9 million.
The Company opened 16 restaurants during fiscal 1995 and currently plans to open up to 12 restaurants in fiscal 1996. The Company expects that the average cash investment required to open a full-service Pizzeria Uno restaurant, excluding land and pre-opening costs, will be approximately $1.5 million.
As of October 1, 1995, the Company had outstanding indebtedness of $21.8 million under its unsecured, revolving line of credit, $3.3 million of senior, unsecured notes and $820,000 in capital lease obligations. In December 1994, the Company obtained a $50.0 million unsecured revolving credit facility to replace its then existing $20.0 million revolving credit facility. The new revolving credit facility will convert to a three year term loan in December 1997. Advances under the revolving credit facility will accrue interest at either the bank's prime rate plus .25%, or alternatively, at 100-150 basis points above LIBOR. The Company anticipates using the revolving credit facility in the future for repayment of the $3.3 million of principal outstanding under its senior, unsecured notes, for the development of additional restaurants, and for working capital.
On October 26, 1995, the Company entered into a five year interest rate swap agreement involving the exchange of floating rate interest payment obligations for fixed rate interest payment obligations. The notional amount of this interest rate swap agreement was $20 million. The Company entered into this agreement in order to manage interest costs and risks associated with fluctuating interest rates.
During June 1995, the Company completed a secondary public equity offering of 2.3 million shares of its Common Stock underwritten by Montgomery Securities. The Company received $22.6 million in net proceeds from the offering.
In October 1995, the Board of Directors of the Company authorized the repurchase of up to a total of 1.5 million shares of the Company's Common stock in the market from time to time during the subsequent six months. This superseded the Board of Directors previous authorization in July 1995 for the repurchase of up to a total of 500,000 shares of the Company's Common Stock. As of November 30, 1995, the Company had repurchased a total of 494,100 shares of its Common Stock at prices between $7.00 and $8.25 per share.
The Company believes that existing cash balances, cash generated from operations and borrowings under its revolving line of credit will be sufficient to satisfy the Company's working capital and capital expenditure requirements through fiscal 1996.
IMPACT OF INFLATION
Inflation has not been a major factor in the Company's business for the last several years. The Company believes it has historically been able to pass on increased costs through menu price increases, but there can be no assurance that it will be able to do so in the future. Future increases in local area construction costs could adversely affect the Company's ability to expand.
SEASONALITY
The Company's business is seasonal in nature, with revenues and, to a greater degree, operating income being lower in its first and second quarters than its other quarters due to reduced winter volumes.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - ----------------------------------------------------
The financial statements and supplementary data are listed under Part IV, Item 14 in this Report.
ITEM 9.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. - -------------------------------------------------------------
The information required by this Item 10 is hereby incorporated by reference to the text appearing under Part I, Item 1 - Business, under the caption "Executive Officers of the Registrant" at page 13 of this Report, and by reference to the Company's definitive Proxy Statement which is expected to be filed by the Company within 120 days after the close of its fiscal year.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION - --------------------------------
The information required by this Item 11 is hereby incorporated by reference to the Company's definitive Proxy Statement which is expected to be filed by the Company within 120 days after the close of its fiscal year.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - ------------------------------------------------------------------------
The information required by this Item 12 is hereby incorporated by reference to the Company's definitive Proxy Statement which is expected to be filed by the Company within 120 days after the close of its fiscal year.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - --------------------------------------------------------
The information required by this Item 13 is hereby incorporated by reference to the Company's definitive Proxy Statement which is expected to be filed by the Company within 120 days after the close of its fiscal year.
PART IV -------
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K - --------------------------------------------------------------------------
2. FINANCIAL STATEMENT SCHEDULES -----------------------------
All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.
3. EXHIBITS --------
(3) Articles of Incorporation and By-laws. --------------------------------------
(a) Restated Certificate of Incorporation, as amended, filed as Exhibit 3.1 to the Company s Quarterly Report on Form 10-Q for the fiscal quarter ended April 2, 1995 (the "April 2, 1995 Form 10-Q").*
(b) By-laws filed as Exhibit 3.2 to the April 2, 1995 Form 10-Q.*
(4) Instruments Defining the Rights of Security Holders, including -------------------------------------------------------------- Indentures. -----------
(a) Specimen Certificate of Common Stock filed as Exhibit 4(a) to the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 1991 (the "1991 Annual Report on Form 10-K").*
(b) Note Purchase Agreement dated as of June 1, 1990 between the Company, Uno Restaurants, Inc., Connecticut General Life Insurance Company, CIGNA Property and Casualty Insurance Company on behalf of one or more separate accounts, Insurance Company of North America and Life Insurance Company of North America, filed as Exhibit 4 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 1, 1990,* and First Amendment to Note Purchase Agreement dated as of July 31, 1991, filed as Exhibit 4(b) to the 1991 Annual Report on Form 10-K,* and Second
Amendment to Note Purchase Agreement dated as of April 30, 1992, filed as Exhibit 4(b) to the 1992 Annual Report on Form 10-K,* and Third Amendment to Note Purchase Agreement dated as of February 15, 1993, filed as Exhibit 4(b) to the 1993 Annual Report on Form 10-K.*
(10) Material Contracts. -------------------
(a) Lease between the Company and Aaron D. Spencer dated March 30, 1987 for premises in West Roxbury, Massachusetts, filed as Exhibit 10.2 to the 1987 Registration Statement.*
(b) Lease between the Company and Aaron D. Spencer dated March 30, 1987 for premises in Boston, Massachusetts, filed as Exhibit 10.3 to the 1987 Registration Statement.*
(c) Lease between Uno Restaurants, Inc. and Lisa S. Cohen and Mark N. Spencer dated February 1, 1990 for premises in West Roxbury, Massachusetts, filed as Exhibit 10(d) to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1990 (the "1990 Annual Report on Form 10-K").*
(d) Form of Franchise Agreement and Area Franchise Agreement, filed as Exhibit 10.5 to the Registration Statement on Form S-2 (Registration No. 33-38944) (the "1991 Registration Statement").*
(e) Uno Restaurant Corporation 1987 Employee Stock Option Plan, as amended, filed as Exhibit A to the Company's Proxy Statement for the Annual Meeting of Stockholders held on February 22, 1994.* **
(f) Uno Restaurant Corporation 1989 Non-Qualified Stock Option Plan for Non-Employee Directors, filed as Exhibit A to the Company's Proxy Statement for the Annual Meeting of Stockholders held on February 8, 1995.* **
(g) Uno Restaurant Corporation 1993 Non-Qualified Stock Option Plan for Non-Employee Directors, filed as Exhibit A to the Company's Proxy Statement for the Annual Meeting of Stockholders held on March 2, 1993.* **
(h) Form of Indemnification Agreement between the Company and its Directors filed as Exhibit 10.6 to the 1987 Registration Statement.* **
(i) Variable Royalty Plan for Franchises, filed as Exhibit 10(l) to the 1991 Annual Report on Form 10-K.*
(j) $50,000,000 Revolving Credit and Term Loan Agreement dated as of December 9, 1994 by and among Uno Restaurants, Inc., as Borrower, Uno Foods Inc., Pizzeria Uno Corporation, URC Holding Company, Inc. and Uno Restaurant Corporation, as Guarantors, and Fleet Bank of Massachusetts, N.A. as Agent (without exhibits) filed as Exhibit 10(p) to the 1994 Annual Report on Form 10-K,* and First Amendment to Revolving Credit and Term Loan Agreement dated as of January 30, 1995, and Second Amendment to Revolving Credit and Term Loan Agreement dated as of November 7, 1995.
(k) Interest Rate Swap Agreement between Fleet Bank of Massachusetts, N.A. and Uno Restaurants, Inc. dated October 25, 1995.
(l) Asset Purchase Agreement dated September 1, 1994, by and among Bay Street Restaurants, Inc., Bay Street of Philadelphia, Pennsylvania, Inc., Bay Street of Woodbridge, New Jersey, Inc., Bay Street of Schaumburg, Illinois, Inc. and Bay Street Services, Inc. (collectively, the "Seller"), and UNO Bay, Inc., B.S. of Woodbridge, Inc., B.S. of Schaumburg, Inc. and B.S. Intangible Asset Corp. (collectively, the "Purchaser") filed as Exhibit 10(q) to the 1994 Annual Report on Form 10-K.*
(m) Change in Control Protection Agreements dated January 6, 1994 between Uno Restaurant Corporation and each of its named executive officers, Mr. Spencer, Mr. Miller, Mr. Brown, Mr. Fox and Mr. Gallucci filed as Exhibit 10(r) to the 1994 Annual Report on Form 10-K.* **
(n) Master Lease-Purchase Agreement between ORIX Credit Alliance, Inc., as Lessor, and Massachusetts Industrial Finance Agency, as Lessee, dated April 19, 1994, and Master Sublease-Purchase Agreement between Massachusetts Industrial Finance Agency, as Sublessor, and Uno Foods, Inc. as Sublessee, dated April 19, 1994 filed as Exhibit 10(s) to the 1994 Annual Report on Form 10-K.*.
(11) Statement Re: Computation of Per Share Earnings
(21) Subsidiaries of the Registrant
(23) Consent of Ernst & Young LLP, Independent Auditors
(27) Financial Data Schedule
- -------------------------- * In accordance with Rule 12b-23 and Rule 12b-32 under the Securities Exchange Act of 1934, as amended, reference is made to the documents previously filed with the Securities and Exchange Commission, which documents are hereby incorporated by reference.
** Management Contract
(B) REPORTS ON FORM 8-K -------------------
During the fiscal quarter ended October 1, 1995, the Company did not file any Current Reports on Form 8-K.
Report of Independent Auditors
The Board of Directors Uno Restaurant Corporation
We have audited the accompanying consolidated balance sheets of Uno Restaurant Corporation and subsidiaries (the Company) as of October 1, 1995 and October 2, 1994, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended October 1, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Uno Restaurant Corporation and subsidiaries at October 1, 1995 and October 2, 1994, and the consolidated results of their operations and their cash flows for each of the three years in the period ended October 1, 1995, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Boston, Massachusetts November 1, 1995
Uno Restaurant Corporation and Subsidiaries
See accompanying notes.
Uno Restaurant Corporation and Subsidiaries
See accompanying notes.
Uno Restaurant Corporation and Subsidiaries
See accompanying notes.
Uno Restaurant Corporation and Subsidiaries
See accompanying notes.
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
October 1, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Uno Restaurant Corporation and its wholly-owned subsidiaries (the Company). All intercompany accounts and transactions have been eliminated in consolidation. Company-owned restaurants are located predominately in the Northeast and Mid-Atlantic states and franchised restaurants are located throughout the United States.
FISCAL YEAR
The Company's fiscal year ends on the close of business on the Sunday closest to September 30 in each year. The fiscal year ended October 3, 1993 included 53 weeks of operations.
INVENTORY
Inventory, which consists of food, beverages and store supplies, is stated at the lower of cost (first-in, first-out method) or market.
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Property, equipment and leasehold improvements are recorded at cost. The Company provides for depreciation of buildings and equipment over their estimated useful lives using the straight-line method. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the lease using the straight-line method.
REVENUE RECOGNITION - FRANCHISE FEES
The Company defers franchise fees until the franchisee opens the restaurant and all services have been substantially performed; at that time, the entire amount of the fee is recorded as income. Royalty income is recorded as earned based on rates provided by the
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
respective franchise agreements. Expenses related to franchise activities amounted to approximately $1,889,000, $1,427,000 and $1,210,000 in fiscal years 1995, 1994 and 1993, respectively.
PRE-OPENING COSTS
Costs relating to the opening of new restaurants are deferred until the restaurants open and are amortized over 12 months from that point using the straight-line method.
INCOME TAXES
In fiscal years 1995 and 1994, deferred income taxes are recognized for temporary differences between financial statement and income tax bases of assets and liabilities for which income tax benefits and obligations will be realized in future years. In fiscal year 1993, the provision for deferred income taxes represents the tax effect of differences in the timing of income and expense recognition for tax and financial statement purposes.
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNINGS PER COMMON SHARE
Earnings per common share amounts are calculated based upon the weighted-average number of shares outstanding, giving effect to the dilutive effect of stock options. Average shares outstanding and all per share amounts included in the accompanying consolidated financial statements and notes thereto are based on the increased number of shares, giving retroactive effect to the five-for-four stock split in fiscal year 1995 (see Note 7).
RECLASSIFICATIONS
Certain amounts in the accompanying 1994 and 1993 financial statements have been reclassified to permit comparison with 1995.
2. BUSINESS ACQUISITIONS AND DISPOSITIONS
In December 1994, the Company completed an agreement with Bay Street Restaurants, Inc. to purchase the net assets of three restaurants located in Illinois, New Jersey and Pennsylvania. In December 1993, the Company acquired the leasehold improvements and equipment of three franchised restaurants in Connecticut. These acquisitions have been accounted for under the purchase method of accounting. The results of operations of the acquired companies prior to the dates of acquisition would not have a material impact on the consolidated results of operations in fiscal years 1995, 1994 and 1993.
During 1995, the Company assigned its leasehold interest in its Fairview Heights, Illinois restaurant to an unaffiliated party in exchange for the leasehold interest in that unaffiliated party's restaurant located in Orlando, Florida. The Company recorded the transaction at fair market value, and wrote off the net book value of equipment no longer usable.
On November 8, 1993, the Company sold to a franchisee for $2,500,000 a Pizzeria Uno restaurant in Lake Buena Vista, Florida and recorded a gain of $312,000, which has been included in other income in fiscal year 1994.
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Property, equipment and leasehold improvements consist of the following:
4. RELATED-PARTY TRANSACTIONS
The Company leases three buildings from its principal shareholder for a restaurant and for corporate office space. Rent expense in the amount of approximately $442,000 was charged to operations in each of the fiscal years presented. The Company believes that the terms of these leases approximate fair rental value.
The Company's President and his brother own and operate three franchised restaurants. Additionally, the Chairman of the Company owns a 50% interest in a franchised pizza takery, and one of the directors of the Company has a partnership interest in a franchised restaurant. These franchisees pay royalties to the Company under standard franchise agreements, with the exception of the pizza takery, which is being operated as a test concept and, as a result, is not currently being charged royalties.
5. LEASES
The Company conducts the majority of its operations in leased facilities, which are accounted for as capital or operating leases. The leases typically provide for a base rent plus real estate taxes, insurance and other expenses, plus additional contingent rent based
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Total expenses for all leases were as follows:
Certain operating lease agreements contain free rent inducements and scheduled rent increases which are being amortized over the terms of the agreements, ranging from 15 to 20 years, using the straight-line method. The deferred rent liability, included in other liabilities, amounted to $3,296,000 at October 1, 1995 and $2,659,000 at October 2, 1994.
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
The Company has a $50,000,000 unsecured revolving line of credit which converts to a three-year term loan in December 1997. The Company is entitled to borrow at its discretion amounts which accrue interest at variable rates based on either the LIBOR or prime rate. At October 1, 1995, interest on outstanding borrowings ranged from 6.87% to 8.75%. A commitment fee of approximately .33% is accrued on unused borrowings under the credit agreement. The note agreements contain certain financial and operating covenants, including maintenance of certain levels of net worth and income.
The Company made cash payments of interest of $2,445,000, $1,465,000 and $1,219,000 during fiscal years 1995, 1994 and 1993, respectively. The Company capitalized interest during the construction period of newly constructed restaurants amounting to $509,000 in fiscal year 1995, $228,000 in fiscal year 1994 and $186,000 in fiscal year 1993 and included those amounts in leasehold improvements.
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
6. FINANCING ARRANGEMENTS (CONTINUED)
The Company provides certain limited lease financing to qualified franchisees through an agreement with an unaffiliated finance company. The Company's maximum guarantee under the agreement was $1,993,000 at October 1, 1995. The Company has also guaranteed up to a maximum of $431,000 of future lease payments in the event of default by specific franchisees.
The Company has an outstanding letter of credit in the amount of $150,000 at October 1, 1995, which expires in December 1996.
7. COMMON STOCK TRANSACTIONS
On November 15, 1994, the Board of Directors of the Company declared a five-for-four stock split payable to shareholders on February 28, 1995. In the third quarter of fiscal 1995, the Company obtained $22.6 million in exchange for 2.3 million shares of common stock in connection with a secondary common stock offering.
In July 1995, the Board of Directors authorized the purchase of up to 500,000 shares of the Company's common stock in the open market. Under this arrangement, the Company purchased 358,100 shares as treasury stock during fiscal year 1995. Subsequent to year end, the Board of Directors increased its authorization to purchase up to a total of 1.5 million shares of the Company's common stock in the open market.
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. ACCRUED EXPENSES
Accrued expenses consist of the following:
10. EMPLOYEE BENEFIT PLANS
The Company maintains a 401(k) Savings and Employee Stock Ownership Retirement Plan (the Plan) for all of its eligible employees. The Plan is maintained in accordance with the provisions of Section 401(k) of the Internal Revenue Code and allows all employees with at least six months of service to make annual tax-deferred voluntary contributions up to 15% of their salary. Under the Plan, the Company matches a specified percentage of the employees' contributions, subject to certain limitations, and makes annual discretionary contributions of the Company's Common Stock. Total contributions made to the plans were $153,000, $110,000 and $25,000 in fiscal years 1995, 1994 and 1993, respectively.
The Company sponsors a Deferred Compensation Plan which allows officers to defer up to 20% of their annual compensation. These assets are placed in a rabbi trust and are presented as assets of the Company in the accompanying balance sheet as they are available to the general creditors of the Company in the event of the Company's insolvency. The related liability of $426,000 at October 1, 1995 is included in other liabilities in the accompanying balance sheet. Deferred compensation expense in the amounts of $173,000 and $265,000 were recorded in fiscal year 1995 and 1994, respectively.
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
11. INCOME TAXES
Effective October 4, 1993, the Company adopted Financial Accounting Standards Board (FASB) Statement No. 109 (Statement 109). As permitted by Statement 109, the Company has elected not to restate the financial statements of any prior years. The effect of the change on net income for fiscal 1994, as well as the cumulative effect, was not material.
Deferred taxes are attributable to the following temporary differences:
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
11. INCOME TAXES (CONTINUED)
The Company made income tax payments of $3,667,000, $3,779,000 and $2,826,000 during fiscal years 1995, 1994 and 1993, respectively.
12. STOCK OPTION PLANS
The 1987 Employee Stock Option Plan (the Plan) provides for up to 1,875,000 shares of common stock issuable upon exercise of options granted under the Plan. Options may be granted at an exercise price not less than fair market value on the date of grant. All options vest at a rate of 20% per year beginning one year after the date of grant, with the exception of 93,750 and 62,500 options granted to the President and Chairman of the Company, respectively, which vest immediately at the date of grant. All options terminate ten years after the date of grant, with the exception of the 175,000 options granted to the Chairman, which terminate five years after the date of grant. Options outstanding at October 1, 1995 are non-qualified stock options.
The 1989 and 1993 Non-Qualified Stock Option Plans for Non-Employee Directors (the Directors Plans) provide for up to 101,563 shares of Common Stock issuable upon exercise of options granted under the Directors Plans. The 1989 and 1993 Directors Plans terminate on November 10, 1999 and August 17, 2002, respectively, but such termination shall not affect the validity of options granted prior to the dates of termination. Options are to be granted at an exercise price equal to the fair market value of the shares of Common Stock at the date of grant. Options granted under the Directors Plans may be exercised commencing one year after the date of grant and ending ten years from the date of grant.
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
13. QUARTERLY FINANCIAL DATA (UNAUDITED)
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
14. SUBSEQUENT EVENT
On October 26, 1995, the Company entered into a five year interest rate swap agreement involving the exchange of floating rate interest payment obligations for fixed rate interest payment obligations. The notional amount of this interest rate swap agreement was $20 million. The Company entered into this agreement in order to manage interest costs and risks associated with fluctuating interest rates. In the event that a counterparty fails to meet the terms of the interest rate swap agreement, the Company's exposure is limited to the interest rate differential. The Company has executed this agreement with a creditworthy institution and considers the risk of nonperformance to be remote.
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements (Form S-8 No. 33-80584 and Post-Effective Amendment No. 2 to Form S-8 No. 33-22875) pertaining to the Uno Restaurant Corporation 1987 Employee Stock Option Plan (Form S-8 No. 33-80586) pertaining to the Uno Restaurant Corporation 1989 Non-Qualified Stock Option Plan for Non-Employee Directors and (Form S-8 No. 33-80664) pertaining to the Uno Restaurant Corporation 1993 Non-Qualified Stock Option Plan for Non-Employee Directors of our report dated November 1, 1995, with respect to the consolidated financial statements of Uno Restaurant Corporation included in the Annual Report (Form 10-K) for the year ended October 1, 1995.
ERNST & YOUNG LLP
Boston, Massachusetts December 18, 1995
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 its behalf by the undersigned, thereunto duly authorized.
(Registrant) Uno Restaurant Corporation -----------------------------------------


ITEM 2. PROPERTIES
The Company owns the sites of five of its supermarkets (containing 304,000 square feet of total space), all of which are free-standing stores, except the Egg Harbor store, which is part of a shopping center. The Company also owns the site of the former Easton and Maplewood stores. The Maplewood property is under contract for sale to the current tenant and the Easton store is currently being marketed. The remaining eighteen supermarkets (containing 800,000 square feet of total space) are leased, with initial lease terms generally ranging from 20 to 30 years, usually with renewal options. Eleven of these leased stores are located in strip shopping centers and the remaining seven are free-standing stores. Except with respect to one lease between the Company and certain related parties, none of the Company's leases expire before 1997. The annual rent, including capitalized leases, for all of the Company's leased facilities for the year ended July 29, 1995 was approximately $5,700,000. The Company is a limited partner in two partnerships, each of which owns a shopping center in which one of the Company's leased supermarkets is located. The Company also is a general partner in a general partnership that is a lessor of one of the Company's free-standing supermarkets.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
No material legal proceedings.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters submitted to shareholders in the fourth quarter.
ITEM X. EXECUTIVE OFFICERS OF THE REGISTRANT
In addition to the information regarding directors incorporated by reference to the Company's definitive Proxy Statement in Part III, Item 10, the following is provided with respect to executive officers who are directors:
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS
The information required by this Item is incorporated by reference from Information appearing on Page 16 in the Company's Annual Report to Shareholders for the fiscal year ended July 29, 1995.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is incorporated by reference from Information appearing on Page 1 in the Company's Annual Report to Shareholders for the fiscal year ended July 29, 1995.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by this Item is incorporated by reference from Information appearing on Pages 4 and 5 in the Company's Annual Report to Shareholders for the fiscal year ended July 29, 1995.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated by reference from Information appearing on Page 1 and Pages 6 to 16 in the Company's Annual Report to Shareholders for the fiscal year ended July 29, 1995.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 is incorporated by reference from the Company's definitive Proxy Statement to be filed on or before November 3, 1995, in connection with its Annual Meeting scheduled to be held on December 8, 1995.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated by reference from the Company's definitive Proxy Statement to be filed on or before November 3, 1995, in connection with its Annual Meeting scheduled to be held on December 8, 1995.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is incorporated by reference from the Company's definitive Proxy Statement to be filed on or before November 3, 1995, in connection with its annual meeting scheduled to be held on December 8, 1995.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 13 is incorporated by reference from the Company's definitive Proxy Statement to be filed on or before November 3, 1995, in connection with its annual meeting scheduled to be held on December 8, 1995.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
Consolidated Balance Sheets - July 29, 1995 and July 30, 1994 Consolidated Statements of Operations - years ended July 29, 1995; July 30, 1994 and July 31, 1993 Consolidated Statements of Shareholders' Equity - years ended July 29, 1995; July 30, 1994 and July 31, 1993 Consolidated Statements of Cash Flows - years ended July 29, 1995; July 30, 1994 and July 31, 1993 Notes to consolidated financial statements
The financial statements above and Independent Auditors' Report have been incorporated by reference from the Company's Annual Report to Shareholders for the fiscal year ended July 29, 1995.
2. Financial Statement Schedules
Independent Auditors' Report on Schedules
Schedule V - Property, Equipment and Fixtures
Schedule VI - Accumulated depreciation and amortization of property, equipment and fixtures
All other schedules are omitted because they are not applicable, or not required, or because the required information is included in the consolidated financial statements or notes thereto.
3. Exhibits
EXHIBIT INDEX
Exhibit No. 3 - Certificate of Incorporation and By-Laws *
Exhibit No. 4 - Instruments defining the rights of security holders;
4.1 Note Purchase Agreement dated August 20, 1987 *
4.2 Loan Agreement dated March 29, 1994*
4.3 Amendment No. 1 to Loan Agreement*
Exhibit No. 10 - Material Contracts:
10.1 Wakefern By-Laws *
10.2 Stockholders Agreement dated February 20, 1992
between the Company and Wakefern Food Corp. *
10.3 Voting Agreement dated March 4, 1987 *
10.4 1987 Incentive and Nonstatutory Stock Option Plan*
Exhibit No. 13 - Annual Report to Security Holders
Exhibit No. 22 - Subsidiaries of Registrant
Exhibit No. 23 - Consent of KPMG Peat Marwick LLP
Exhibit No. 27 - Article 5 Financial Data Schedule
Exhibit No. 28 a - Press release dated October 3, 1995
Exhibit No. 28 b - Third Quarter Report to Shareholders
* The following exhibits are incorporated by reference from the following previous filings:
Form 10-K for 1994: 4.3 Form 10-K for 1993: 3, 4.1, 10.1, 10.2, 10.3 and 10.4 Form 10-Q for April 23, 1994: 4.2
(b) No reports on Form 8-K were filed during the fourth quarter of fiscal 1995.
Independent Auditors' Report on Financial Statement Schedules
The Board of Directors Village Super Market, Inc.:
Under date of September 29, 1995, we reported on the consolidated balance sheets of Village Super Market, Inc. as of July 29, 1995 and July 30, 1994, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the years in the three-year period ended July 29, 1995 as contained in the 1995 annual report to shareholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year 1995. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedules as listed in the accompanying index. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
KPMG Peat Marwick LLP
Short Hills, New Jersey September 29, 1995
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 its behalf by the undersigned thereunto duly authorized.
Village Super Market, Inc.
By: /S/ Kevin Begley By: /S/ Perry Sumas Kevin Begley Perry Sumas (Chief Financial & (Chief Executive Officer) Principal Accounting Officer)
Date: October 25, 1995
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 and on dates indicated:
/S/ Perry Sumas /S/ James Sumas Perry Sumas, October 25, 1995 James Sumas, October 25, 1995 (Director) (Director)
/S/ Robert Sumas /S/ William Sumas Robert Sumas, October 25, 1995 William Sumas, October, 25, 1995 (Director) (Director)
/S/ John P. Sumas /S/ John J. McDermott John P. Sumas, October 25, 1995 John McDermott, October 25, 1995 (Director) (Director)
/S/ George Andresakes /S/ Norman Crystal George Andresakes, October 25, 1995 Norman Crystal, October 25, 1995 (Director) (Director)
SUBSIDIARIES OF REGISTRANT
The Company currently has one wholly-owned subsidiary, Village Liquor, Inc. This corporation is organized under the laws of the State of New Jersey. The Financial statements of this subsidiary are included in the Company's consolidated financial statements.
Independent Auditors' Consent
The Board of Directors Village Super Market, Inc.:
We consent to incorporation by reference in the Registration Statement (No. 2-86320) on Form S-8 of Village Super Market, Inc. of our reports dated September 29, 1995, relating to the consolidated balance sheets of Village Super Market, Inc. and subsidiaries as of July 29, 1995 and July 30, 1994, and the related consolidated statements of operations, shareholders' equity, and cash flows and related schedules for each of the years in the three year period ended July 29, 1995, which reports appear in or are incorporated by reference in the July 29, 1995 annual report on Form 10-K of Village Super Market, Inc.
Our report refers to a change in the method of accounting for income taxes.
KPMG Peat Marwick LLP
Short Hills, New Jersey October 27, 1995