FLANIGANS ENTERPRISES INC

Previous wording

Reported financial results may not be indicative of the financial results of future periods. All non-historical information contained in the following discussion constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such as “anticipates, appears, expects, trends, intends, hopes, plans, believes, seeks, estimates, may, will,” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and uncertainties, including but not limited to the effect of the novel coronavirus pandemic and related “shelter-in-place” orders and other governmental mandates (“COVID 19”), customer demand and competitive conditions. Factors that could cause actual results to differ materially are included in, but not limited to, those identified in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our periodic reports, including our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may reflect events or circumstances after the date of this report.

Current wording

Reported financial results may not be indicative of the financial results of future periods. All non-historical information contained in the following discussion constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such as “anticipates, appears, expects, trends, intends, hopes, plans, believes, seeks, estimates, may, will,” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and uncertainties, including but not limited to customer demand and competitive conditions. Factors that could cause actual results to differ materially are included in, but not limited to, those identified in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our periodic reports, including our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may reflect events or circumstances after the date of this report.

Previous wording

Revenues. Total revenue for the twenty-six weeks ended March 30, 2024 increased $7,545,000 or 8.81% to $93,209,000 from $85,664,000 for the twenty-six weeks ended April 1, 2023 due primarily to increased package liquor store and restaurant sales, the Recent Price Increases, revenue generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023, the opening of the package liquor store in Hollywood, Florida (Store #19P) in December 2022, and the opening of the package liquor store in Miramar, Florida (Store #24) in March 2023.

Current wording

Revenues. Total revenue for the thirteen weeks ended June 29, 2024 increased $3,730,000 or 8.22% to $49,102,000 from $45,372,000 for the thirteen weeks ended July 1, 2023 due primarily to increased package liquor store and restaurant sales, revenue generated from the opening of our corporate owned restaurant in Hollywood, Florida (Store #19R) in March 2024 and the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023.

Previous wording

Restaurant Food Sales. Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $29,356,000 for the thirteen weeks ended March 30, 2024 as compared to $27,113,000 for the thirteen weeks ended April 1, 2023. The increase in restaurant food sales during the thirteen weeks ended March 30, 2024 as compared to restaurant food sales during the thirteen weeks ended April 1, 2023 is attributable to the increased menu prices and restaurant food sales generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023. Comparable weekly restaurant food sales for restaurants open for all of the thirteen weeks ended March 30, 2024 and April 1, 2023 respectively, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location Store #19 which opened for business during the second quarter of our fiscal year 2024) and nine restaurants owned by affiliated limited partnerships (excluding our Miramar, Florida location Store #25 which opened for business during the third quarter of our fiscal year 2023) was $2,089,000 and $2,061,000 for the thirteen weeks ended March 30, 2024 and April 1, 2023, respectively, an increase of 1.36%. Comparable weekly restaurant food sales for Company-owned restaurants (excluding our Hollywood, Florida location Store #19 which opened for business during the second quarter of our fiscal year 2024) was $1,029,000 and $1,008,000 for the thirteen weeks ended March 30, 2024 and April 1, 2023, respectively, an increase of 2.08%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only (excluding Store #25 which opened for business during the third quarter of our fiscal year 2023), was $1,060,000 and $1,053,000 for the thirteen weeks ended March

Current wording

Restaurant Food Sales. Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $30,471,000 for the thirteen weeks ended June 29, 2024 as compared to $28,126,000 for the thirteen weeks ended July 1, 2023. The increase in restaurant food sales during the thirteen weeks ended June 29, 2024 as compared to restaurant food sales during the thirteen weeks ended July 1, 2023 is attributable to restaurant food sales generated from the opening of our corporate owned restaurant in Hollywood, Florida (Store #19R) during the second quarter of our fiscal year 2024 and the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) during the third quarter of our fiscal year 2023. Comparable weekly restaurant food sales for restaurants open for all of the thirteen weeks ended June 29, 2024 and July 1, 2023 respectively, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location Store #19R which opened for business during the second quarter of our fiscal year 2024) and nine restaurants owned by affiliated limited partnerships (excluding our Miramar, Florida location (Store #25) which opened for business during the third quarter of our fiscal year 2023) was $2,053,000 and $2,016,000 for the thirteen weeks ended June 29, 2024 and July 1, 2023, respectively, an increase of 1.84%. Comparable weekly restaurant food sales for Company-owned restaurants (excluding our Hollywood, Florida location Store #19R which opened for business during the second quarter of our fiscal year 2024) was $977,000 and $951,000 for the thirteen weeks ended June 29, 2024 and July 1, 2023, respectively, an increase of 2.73%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only (excluding our Miramar, Florida location (Store #25) which opened for business during the third quarter of our fiscal year 2023), was $1,076,000 and $1,065,000 for the thirteen weeks ended June 29, 2024 and July 1, 2023, respectively, an increase of 1.03%. We expect that restaurant food sales, including non-alcoholic beverages, for the balance of our fiscal year 2024 will increase due to the operation of our re-opened Store #19R.

Previous wording

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $7,740,000 for the thirteen weeks ended March 30, 2024 as compared to $7,281,000 for the thirteen weeks ended April 1, 2023. The increase in restaurant bar sales during the thirteen weeks ended March 30, 2024 is primarily due to the increased menu prices and restaurant bar sales generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023. Comparable weekly restaurant bar sales (for restaurants open for all of the thirteen weeks ended March 30, 2024 and April 1, 2023 respectively, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location Store #19 which opened for business during the second quarter of our fiscal year 2024) and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location Store #25, which opened for business during the third quarter of our fiscal year 2023) was $556,000 and $560,000 for the thirteen weeks ended March 30, 2024 and April 1, 2023, respectively, a decrease of 0.71%. Comparable weekly restaurant bar sales for Company-owned restaurants only (excluding our Hollywood, Florida location Store #19 which opened for business during the second quarter of our fiscal year 2024) was $252,000 and $245,000 for the thirteen weeks ended March 30, 2024 and April 1, 2023, respectively, an increase of 2.86%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only (excluding Store #25 which opened for business during the third quarter of our fiscal year 2023), was $304,000 and $315,000 for the thirteen weeks ended March 30, 2024 and April 1, 2023, respectively, a decrease of 3.49%. We expect that restaurant bar sales for the balance of our fiscal year 2024 will increase due to increased restaurant traffic and the operation of our newly re-opened Store #19.

Current wording

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $7,577,000 for the thirteen weeks ended June 29, 2024 as compared to $7,687,000 for the thirteen weeks ended July 1, 2023. The decrease in restaurant bar sales during the thirteen weeks ended June 29, 2024 is primarily due to increased competition and notwithstanding the opening of our corporate owned restaurant in Hollywood, Florida (Store #19R). Comparable weekly restaurant bar sales (for restaurants open for all of the thirteen weeks ended June 29, 2024 and July 1, 2023 respectively, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location Store #19R which opened for business during the second quarter of our fiscal year 2024) and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location Store #25, which opened for business during the third quarter of our fiscal year 2023) was $517,000 and $552,000 for the thirteen weeks ended June 29, 2024 and July 1, 2023, respectively, a decrease of 6.34%. Comparable weekly restaurant bar sales for Company-owned restaurants only (excluding our Hollywood, Florida location Store #19R which opened for business during the second quarter of our fiscal year 2024) was $229,000 and $234,000 for the thirteen weeks ended June 29, 2024 and July 1, 2023, respectively, a decrease of 2.14%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only (excluding Store #25 which opened for business during the third quarter of our fiscal year 2023), was $288,000 and $318,000 for the thirteen weeks ended June 29, 2024 and July 1, 2023, respectively, a decrease of 9.43%. We expect that restaurant bar sales for the balance of our fiscal year 2024 will increase due to the operation of our re-opened Store #19R.

Previous wording

Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $10,140,000 for the thirteen weeks ended March 30, 2024 as compared to $8,659,000 for the thirteen weeks ended April 1, 2023, an increase of $1,481,000. This increase was primarily due to increased package liquor store traffic and the package liquor sales generated from the operation of our package liquor store in Miramar, Florida (Store #24). Sales were up due to the fact that both New Year’s Eve and New Year’s Day fell in the second quarter of our fiscal year 2024, while New Year’s Eve fell in the first quarter of our fiscal year 2023 and New Year’s Day fell in the second quarter of our fiscal year 2023. The weekly average of same store package liquor store sales, which includes ten (10) Company-owned package liquor stores (excluding Store #24 which opened for business during the second quarter of our fiscal year 2023), was $732,000 and $663,000 for the thirteen weeks ended March 30, 2024 and April 1, 2023, respectively, an increase of 10.41%. We expect that package liquor store sales for our fiscal year 2024 will increase due to increased package liquor store traffic and the operation of the package liquor store located in Miramar, Florida (Store #24).

Current wording

Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $10,292,000 for the thirteen weeks ended June 29, 2024 as compared to $8,791,000 for the thirteen weeks ended July 1, 2023, an increase of $1,501,000. This increase was primarily due to increased package liquor store traffic. The weekly average of same store package liquor store sales, which includes eleven (11) Company-owned package liquor stores was $792,000 and $676,000 for the thirteen weeks ended June 29, 2024 and July 1, 2023, respectively, an increase of 17.16%. We expect that package liquor store sales for our fiscal year 2024 will increase due to increased package liquor store traffic.

Previous wording

Operating Costs and Expenses. Operating costs and expenses (consisting of cost of merchandise sold, payroll and related costs, occupancy costs and selling, general and administrative expenses), for the thirteen weeks ended March 30, 2024 increased $4,292,000 or 10.44% to $45,384,000 from $41,092,000 for the thirteen weeks ended April 1, 2023. The increase was primarily due to increased payroll, increased consultant fees to improve our accounting process and an expected general increase in food costs, costs and expenses incurred from our limited partnership owned restaurant in Miramar, Florida (Store #25) and the package liquor store in Miramar, Florida (Store #24), partially offset by actions taken by management to reduce and/or control costs. We anticipate that our operating costs and expenses will continue to increase through our fiscal year 2024. Operating costs and expenses increased as a percentage of total revenue to approximately 94.41% for the thirteen weeks ended March 30, 2024 from 93.81% for the thirteen weeks ended April 1, 2023.

Current wording

Costs and Expenses. Costs and expenses (consisting of cost of merchandise sold, payroll and related costs, operating expenses, occupancy costs, selling, general and administrative expenses and depreciation and amortization), for the thirteen weeks ended June 29, 2024 increased $4,143,000 or 9.71% to $46,815,000 from $42,672,000 for the thirteen weeks ended July 1, 2023. The increase was primarily due to increased payroll, increased consultant fees to improve our accounting process, an expected general increase in food costs, costs and expenses incurred from our company owned restaurant in Hollywood Florida (Store #19R), partially offset by actions taken by management to reduce and/or control costs. We anticipate that our costs and expenses will continue to increase through our fiscal year 2024. Costs and expenses increased as a percentage of total revenue to approximately 95.34% for the thirteen weeks ended June 29, 2024 from 94.05% for the thirteen weeks ended July 1, 2023.

Previous wording

Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the thirteen weeks ended March 30, 2024 increased to $24,886,000 from $23,184,000 due to higher sales volume for the thirteen weeks ended March 30, 2024. Gross profit margin for the restaurant food and bar sales decreased during the thirteen weeks ended March 30, 2024 when compared to the thirteen weeks ended April 1, 2023 due to higher food costs partially offset by, among other things, Recent Price Increases. Our gross profit margin for restaurant food and bar sales (calculated as gross profit reflected as a percentage of restaurant food and bar sales), was 67.09% for the thirteen weeks ended March 30, 2024 and 67.41% for the thirteen weeks ended April 1, 2023.

Current wording

Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the thirteen weeks ended June 29, 2024 increased to $24,944,000 from $24,078,000 due to higher sales volume for the thirteen weeks ended June 29, 2024. Gross profit margin for the restaurant food and bar sales decreased during the thirteen weeks ended June 29, 2024 when compared to the thirteen weeks ended July 1, 2023 due to higher food costs. Our gross profit margin for restaurant food and bar sales (calculated as gross profit reflected as a percentage of restaurant food and bar sales), was 65.56% for the thirteen weeks ended June 29, 2024 and 67.23% for the thirteen weeks ended July 1, 2023.

Previous wording

Package Store Sales. Gross profit for package store sales for the thirteen weeks ended March 30, 2024 increased to $2,648,000 from $2,447,000 for the thirteen weeks ended April 1, 2023. Our gross profit margin (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 26.11% for the thirteen weeks ended March 30, 2024 and 28.26% for the thirteen weeks ended April 1, 2023. We anticipate that the gross profit margin for package liquor store merchandise will decrease for the balance of fiscal year 2024 due to higher costs and a reduction in pricing of certain package store merchandise to be more competitive.

Current wording

Package Store Sales. Gross profit for package store sales for the thirteen weeks ended June 29, 2024 increased to $2,589,000 from $2,293,000 for the thirteen weeks ended July 1, 2023. Our gross profit margin (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 25.16% for the thirteen weeks ended June 29, 2024 and 26.08% for the thirteen weeks ended July 1, 2023. We anticipate that the gross profit margin for package liquor store merchandise will decrease for the balance of fiscal year 2024 due to higher costs and a reduction in pricing of certain package store merchandise to be more competitive.

Previous wording

Payroll and Related Costs. Payroll and related costs for the thirteen weeks ended March 30, 2024 increased $798,000 or 5.63% to $14,972,000 from $14,174,000 for the thirteen weeks ended April 1, 2023. Payroll and related costs for the thirteen weeks ended March 30, 2024 were higher due primarily to the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023, the retail package liquor store in Miramar, Florida (Store #24) in March 2023 and higher salaries to employees to remain competitive with other potential employees in a tight labor market. Payroll and related costs as a percentage of total revenue was 31.15% in the thirteen weeks ended March 30, 2024 and 32.36% of total revenue in the thirteen weeks ended April 1, 2023.

Current wording

Payroll and Related Costs. Payroll and related costs for the thirteen weeks ended June 29, 2024 increased $703,000 or 4.82% to $15,301,000 from $14,598,000 for the thirteen weeks ended July 1, 2023. Payroll and related costs for the thirteen weeks ended June 29, 2024 were higher due primarily to the opening of our company owned restaurant in Hollywood, Florida (Store #19R) during the second quarter of our fiscal year 2024, the increase to the Florida minimum wage and higher salaries to employees to remain competitive with other potential employers in a tight labor market. Payroll and related costs as a percentage of total revenue was 31.16% in the thirteen weeks ended June 29, 2024 and 32.17% of total revenue in the thirteen weeks ended July 1, 2023.

Previous wording

Occupancy Costs. Occupancy costs (consisting of percentage rent, common area maintenance, repairs, real property taxes, amortization of leasehold interests and rent expense associated with operating lease liabilities under ASC 842) for the thirteen weeks ended March 30, 2024 increased $52,000 or 2.77% to $1,930,000 from $1,878,000 for the thirteen weeks ended April 1, 2023.

Current wording

Occupancy Costs. Occupancy costs (consisting of percentage rent, common area maintenance, repairs, real property taxes, amortization of leasehold interests and rent expense associated with operating lease liabilities under ASC 842) for the thirteen weeks ended June 29, 2024 increased $110,000 or 5.75% to $2,024,000 from $1,914,000 for the thirteen weeks ended July 1, 2023.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, insurance, professional costs, clerical and administrative overhead) for the thirteen weeks ended March 30, 2024 increased $1,162,000 or 15.25% to $8,780,000 from $7,618,000 for the thirteen weeks ended April 1, 2023, due primarily to Store #24, and Store #25 being open for the thirteen weeks ended March 30, 2024, increased consultant fees to improve our accounting process, inflation and otherwise to increases in expenses across all categories. Selling, general and administrative expenses increased as a percentage of total revenue for the thirteen weeks ended March 30, 2024 to 18.27% as compared to 17.39% for the thirteen weeks ended April 1, 2023.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, professional costs, clerical and administrative overhead) for the thirteen weeks ended June 29, 2024 increased $297,000 or 29.97% to $1,288,000 from $991,000 for the thirteen weeks ended July 1, 2023 due primarily to increased consultant fees to improve our accounting process. Selling, general and administrative expenses increased as a percentage of total revenue for the thirteen weeks ended June 29, 2024 to 2.62% as compared to 2.18% for the thirteen weeks ended July 1, 2023.

Previous wording

***Depreciation and Amortization.***Depreciation and amortization expense for the thirteen weeks ended March 30, 2024, which is included in selling, general and administrative expenses, increased $160,000 or 18.65% to $1,018,000 from $858,000 from the thirteen weeks ended April 1, 2023. This increase is driven by the opening of Stores #24, and #25. As a percentage of total revenue, depreciation and amortization expense was 2.12% of revenue in the thirteen weeks ended March 30, 2024 and 1.96% of revenue in the thirteen weeks ended April 1, 2023.

Current wording

***Depreciation and Amortization.***Depreciation and amortization expense for the thirteen weeks ended June 29, 2024 increased $199,000 or 21.44% to $1,127,000 from $928,000 from the thirteen weeks ended July 1, 2023. This increase is driven by the opening of Store #19R. As a percentage of total revenue, depreciation and amortization expense was 2.30% of revenue in the thirteen weeks ended June 29, 2024 and 2.05% of revenue in the thirteen weeks ended July 1, 2023.

Previous wording

Interest Expense, Net. Interest expense, net, for the thirteen weeks ended March 30, 2024 decreased $7,000 to $255,000 from $262,000 for the thirteen weeks ended April 1, 2023.

Current wording

Interest Expense, Net. Interest expense, net, for the thirteen weeks ended June 29, 2024 decreased $13,000 to $251,000 from $264,000 for the thirteen weeks ended July 1, 2023.

Previous wording

***Income Taxes.***Income tax for the thirteen weeks ended March 30, 2024 was a benefit of $55,000, as compared to an expense of $290,000 for the thirteen weeks ended April 1, 2023. This is primarily due to the FICA Tip Credit that is estimated to be generated in our fiscal year 2024 offset by the tax expense that is anticipated based on the projected pre-tax income and permanent differences.

Current wording

***Income Taxes.***Income tax for the thirteen weeks ended June 29, 2024 was an expense of $282,000, as compared to an expense of $51,000 for the thirteen weeks ended July 1, 2023. This is primarily due the tax expense that is anticipated based on the projected pre-tax income and permanent differences.

Previous wording

Net Income. Net income for the thirteen weeks ended March 30, 2024 increased $346,000 or 15.89% to $2,524,000 from $2,178,000 for the thirteen weeks ended April 1, 2023 due primarily to increased revenue at our retail package liquor stores and restaurants offset by higher food costs and overall increased expenses, including but not limited to, increased consultant fees to improve our accounting process. As a percentage of revenue, net income for the thirteen weeks ended March 30, 2024 is 5.25%, as compared to 4.97% for the thirteen weeks ended April 1, 2023.

Current wording

Net Income. Net income for the thirteen weeks ended June 29, 2024 decreased $609,000 or 25.26% to $1,802,000 from $2,411,000 for the thirteen weeks ended July 1, 2023 due primarily to higher food costs and overall increased expenses, partially offset by increased revenue at our retail package liquor stores and restaurants. As a percentage of revenue, net income for the thirteen weeks ended June 29, 2024 is 3.67%, as compared to 5.31% for the thirteen weeks ended July 1, 2023.

Previous wording

Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders. Net income attributable to Flanigan’s Enterprises, Inc. stockholders for the thirteen weeks ended March 30, 2024 increased $45,000 or 2.37% to $1,942,000 from $1,897,000 for the thirteen weeks ended April 1, 2023 due primarily to increased revenue at our retail package liquor stores and restaurants offset by higher food costs and overall increased expenses, including but not limited to, increased consultant fees to improve our accounting process and a higher portion of our net income attributable to noncontrolling interests (specifically the operation of our Miramar location). As a percentage of revenue, net income attributable to stockholders for the thirteen weeks ended March 30, 2024 is 4.04%, as compared to 4.33% for the thirteen weeks ended April 1, 2023.

Current wording

Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders. Net income attributable to Flanigan’s Enterprises, Inc. stockholders for the thirteen weeks ended June 29, 2024 decreased $484,000 or 30.16% to $1,121,000 from $1,605,000 for the thirteen weeks ended July 1, 2023 due primarily to higher food costs and overall increased expenses, partially offset by increased revenue at our retail package liquor stores and restaurants. As a percentage of revenue, net income attributable to stockholders for the thirteen weeks ended June 29, 2024 is 2.28%, as compared to 3.54% for the thirteen weeks ended July 1, 2023.

Previous wording

Revenues. Total revenue for the thirteen weeks ended March 30, 2024 increased $4,266,000 or 9.74% to $48,069,000 from $43,803,000 for the thirteen weeks ended April 1, 2023 due primarily to increased package liquor store and restaurant sales, increased menu prices, revenue generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023, and the opening of the package liquor store in Miramar, Florida (Store #24) in March 2023. Effective March 26, 2023 we increased menu prices for our food offerings to target an increase to our food revenues of approximately 2.06% and effective March 19, 2023 we increased menu prices for our bar offerings to target an increase to our bar revenues of approximately 5.65% annually, to offset higher food costs and higher overall expenses (collectively the “Recent Price Increases”). Prior to these increases, we previously raised menu prices in the first quarter of our fiscal year 2022.

Current wording

Revenues. Total revenue for the thirty-nine weeks ended June 29, 2024 increased $11,275,000 or 8.60% to $142,311,000 from $131,036,000 for the thirty-nine weeks ended July 1, 2023 due primarily to increased package liquor store and restaurant sales, the increased menu prices, revenue generated from the opening of our corporate owned restaurant in Hollywood, Florida (Store #19R) in March 2024, the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023, the opening of the package liquor store in Miramar, Florida (Store #24) in March 2023 and the opening of the package liquor store in Hollywood, Florida (Store #19P) in December 2022. Effective March 26, 2023 we increased menu prices for our food offerings to target an increase to our food revenues of approximately 2.06% and effective March 19, 2023 we increased menu prices for our bar offerings to target an increase to our bar revenues of approximately 5.65% annually, to offset higher food costs and higher overall expenses (collectively the “Recent Price Increases”). Prior to these increases, we previously raised menu prices in the first quarter of our fiscal year 2022.

Previous wording

Restaurant Food Sales. Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $55,711,000 for the twenty-six weeks ended March 30, 2024 as compared to $51,880,000 for the twenty-six weeks ended April 1, 2023. The increase in restaurant food sales is attributable to increased menu prices and restaurant food sales generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023. Comparable weekly restaurant food sales for restaurants open for all of the twenty-six weeks ended March 30, 2024 and April 1, 2023 respectively, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location Store #19 which opened for business during the second quarter of our fiscal year 2024) and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location Store #25 which opened for business during the third quarter of our fiscal year 2023) was $1,980,000 and $1,972,000 for the twenty-six weeks ended March 30, 2024 and April 1, 2023, respectively, an increase of 0.41%. Comparable weekly restaurant food sales for Company-owned restaurants only (excluding our Hollywood, Florida location Store #19 which opened for business during the second quarter of our fiscal year 2024) was $933,000 and $925,000 for the twenty-six weeks ended March 30, 2024 and April 1, 2023, respectively, an increase of 0.86%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only, (excluding Store #25 which opened for business during the third quarter of our fiscal year 2023), was $1,047,000 for each of the twenty-six weeks ended March 30, 2024 and April 1, 2023, respectively. We expect that restaurant food sales, including non-alcoholic beverages, for our fiscal year 2024 will increase due to increased restaurant traffic and the operation of Store #25 and our newly re-opened Store #19.

Current wording

Restaurant Food Sales. Restaurant revenue generated from the sale of food, including non-alcoholic beverages, at restaurants totaled $86,182,000 for the thirty-nine weeks ended June 29, 2024 as compared to $80,006,000 for the thirty-nine weeks ended July 1, 2023. The increase in restaurant food sales is attributable to the Recent Price Increases and restaurant food sales generated from the opening of our corporate owned restaurant in Hollywood, Florida (Store #19R) during the second quarter of our fiscal year 2024 and the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) during the third quarter of our fiscal year 2023. Comparable weekly restaurant food sales for restaurants open for all of the thirty-nine weeks ended June 29, 2024 and July 1, 2023 respectively, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location Store #19R which opened for business during the second quarter of our fiscal year 2024) and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location Store #25 which opened for business during the third quarter of our fiscal year 2023) was $2,005,000 and $1,986,000 for the thirty-nine weeks ended June 29, 2024 and July 1, 2023, respectively, an increase of 0.96%. Comparable weekly restaurant food sales for Company-owned restaurants only (excluding our Hollywood, Florida location (Store #19R) which opened for business during the second quarter of our fiscal year 2024) was $948,000 and $933,000 for the thirty-nine weeks ended June 29, 2024 and July 1, 2023, respectively, an increase of 1.61%. Comparable weekly restaurant food sales for affiliated limited partnership owned restaurants only, (excluding our Miramar, Florida location (Store #25) which opened for business during the third quarter of our fiscal year 2023), was $1,057,000 and $1,053,000 for thirty-nine weeks ended June 29, 2024 and July 1, 2023, respectively, an increase of 0.38%. We expect that restaurant food sales, including non-alcoholic beverages, for the balance our fiscal year 2024 will increase due to the operation of our re-opened Store #19R.

Previous wording

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $15,203,000 for the twenty-six weeks ended March 30, 2024 as compared to $14,269,000 for the twenty-six weeks ended April 1, 2023. The increase in restaurant bar sales for the twenty-six weeks ended March 30, 2024 is primarily due to increased menu prices and restaurant bar sales generated from the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023. Comparable weekly restaurant bar sales for restaurants open for all of the twenty-six weeks ended March 30, 2024 and April 1, 2023 respectively, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location Store #19 which opened for business during the second quarter of our fiscal year 2024) and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location Store #25,which opened for business during the third quarter of our fiscal year 2023) was $547,000 for the twenty-six weeks ended March 30, 2024 and $549,000 for the twenty-six weeks ended April 1, 2023, a decrease of 0.36%. Comparable weekly restaurant bar sales for Company-owned restaurants only (excluding our Hollywood, Florida location Store #19 which opened for business during the second quarter of our fiscal year 2024) was $243,000 and $237,000 for the twenty-six weeks ended March 30, 2024 and April, 1, 2023 respectively, an increase of 2.53%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only (excluding Store #25 which opened for business during the third quarter of our fiscal year 2023) was $303,000 and $312,000 for the twenty-six weeks ended March 30, 2024 and April, 1, 2023 respectively, a decrease of 2.88%. We expect that restaurant bar sales for our fiscal year 2024 will increase due to increased restaurant traffic and the operation of Store #25 and our newly re-opened Store #19.

Current wording

Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic beverages at restaurants totaled $22,780,000 for the thirty-nine weeks ended June 29, 2024 as compared to $21,956,000 for the thirty-nine weeks ended July 1, 2023. The increase in restaurant bar sales for the thirty-nine weeks ended June 29, 2024 is primarily due to Recent Price Increases and restaurant bar sales generated from the opening of our corporate owned restaurant in Hollywood, Florida (Store #19R) during the second quarter of our fiscal year 2024 and the opening of our limited partnership owned restaurant in Miramar, Florida (Store #25) during the third quarter of our fiscal year 2023. Comparable weekly restaurant bar sales for restaurants open for all of the thirty-nine weeks ended June 29, 2024 and July 1, 2023 respectively, which consists of ten restaurants owned by us (excluding our Hollywood, Florida location (Store #19R) which opened for business during the second quarter of our fiscal year 2024) and nine restaurants owned by affiliated limited partnerships, (excluding our Miramar, Florida location (Store #25), which opened for business during the third quarter of our fiscal year 2023) was $537,000 for the thirty-nine weeks ended June 29, 2024 and $550,000 for the thirty-nine weeks ended July 1, 2023, a decrease of 2.36%. Comparable weekly restaurant bar sales for Company-owned restaurants only (excluding our Hollywood, Florida location (Store #19R) which opened for business during the second quarter of our fiscal year 2024) was $239,000 and $236,000 for the thirty-nine weeks ended June 29, 2024 and July 1, 2023 respectively, an increase of 1.27%. Comparable weekly restaurant bar sales for affiliated limited partnership owned restaurants only (excluding our Miramar, Florida location (Store #25) which opened for business during the third quarter of our fiscal year 2023) was $298,000 and $314,000 for the thirty-nine weeks ended June 29, 2024 and July 1, 2023 respectively, a decrease of 5.10%. We expect that restaurant bar sales for our fiscal year 2024 will increase due to our newly re-opened Store #19R.

Previous wording

Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $20,742,000 for the twenty-six weeks ended March 30, 2024 as compared to $18,062,000 for the twenty-six weeks ended April 1, 2023, an increase of $2,680,000. This increase was primarily due to increased package liquor store traffic and the package liquor sales generated from the operation of our package liquor stores in Hollywood, Florida (Store #19P) and Miramar, Florida (Store #24). The weekly average of same store package liquor store sales, which includes nine (9) Company-owned package liquor stores, (excluding Store #19P which reopened during the first quarter of fiscal year 2023, and Store #24 which opened for business during the second quarter of our fiscal year 2023), was $698,000 and $675,000 for the twenty-six weeks ended March 30, 2024 and April, 1, 2023 respectively, an increase of 3.41%. We expect that package liquor store sales for our fiscal year 2024 will increase due to increased package liquor store traffic.

Current wording

Package Store Sales. Revenue generated from sales of liquor and related items at package liquor stores totaled $31,034,000 for the thirty-nine weeks ended June 29, 2024 as compared to $26,853,000 for the thirty-nine weeks ended July 1, 2023, an increase of $4,181,000. This increase was primarily due to increased package liquor store traffic and the package liquor sales generated from the operation of our package liquor stores in Hollywood, Florida (Store #19P) and Miramar, Florida (Store #24). The weekly average of same store package liquor store sales, which includes nine (9) Company-owned package liquor stores, (excluding Store #19P which reopened during the first quarter of fiscal year 2023, and Store #24 which opened for business during the second quarter of our fiscal year 2023), was $693,000 and $653,000 for the thirty-nine weeks ended June 29, 2024 and July 1, 2023 respectively, an increase of 6.13%. We expect that package liquor store sales for our fiscal year 2024 will increase due to increased package liquor store traffic.

Previous wording

Operating Costs and Expenses. Operating costs and expenses, (consisting of cost of merchandise sold, payroll and related costs, occupancy costs and selling, general and administrative expenses), for the twenty-six weeks ended March 30, 2024 increased $7,976,000 or 9.76% to $89,732,000 from $81,756,000 for the twenty-six weeks ended April 1, 2023. The increase was primarily due to increased payroll, increased consultant fees to improve our accounting process and an expected general increase in food costs, costs and expenses incurred from our limited partnership owned restaurant in Miramar, Florida (Store #25) and the package liquor store in Miramar, Florida (Store #24), partially offset by actions taken by management to reduce and/or control costs. We anticipate that our operating costs and expenses will continue to increase through our fiscal year 2024. Operating costs and expenses increased as a percentage of total revenue to approximately 96.27% for the twenty-six weeks ended March 30, 2024 from 95.44% for the twenty-six weeks ended April 1, 2023.

Current wording

Costs and Expenses. Costs and expenses (consisting of cost of merchandise sold, payroll and related costs, operating expenses, occupancy costs, selling, general and administrative expenses and depreciation and amortization), for the thirty-nine weeks ended June 29, 2024 increased $12,119,000 or 9.74% to $136,547,000 from $124,428,000 for the thirty-nine weeks ended July 1, 2023. The increase was primarily due to increased payroll, increased consultant fees to improve our accounting process, an expected general increase in food costs, costs and expenses incurred from our company owned restaurant in Hollywood Florida (Store #19R), our limited partnership owned restaurant in Miramar, Florida (Store #25), the package liquor store in Miramar, Florida (Store #24) and the package liquor store in Hollywood, Florida (Store #19P), partially offset by actions taken by management to reduce and/or control costs. We anticipate that our operating costs and expenses will continue to increase through our fiscal year 2024. Operating costs and expenses increased as a percentage of total revenue to approximately 95.95% for the thirty-nine weeks ended June 29, 2024 from 94.96% for the thirty-nine weeks ended July 1, 2023.

Previous wording

Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the twenty-six weeks ended March 30, 2024 increased to $46,873,000 from $44,133,000 due to higher sales volume for the twenty-six weeks ended March 30, 2024. Gross profit margin for the restaurant food and bar sales decreased during the twenty-six weeks ended March 30, 2024 when compared to the twenty-six weeks ended April 1, 2023 due to higher food costs partially offset by, among other things, Recent Price Increases. Our gross profit margin for restaurant food and bar sales (calculated as gross profit reflected as a percentage of restaurant food and bar sales), was 66.10% for the twenty-six weeks ended March 30, 2024 and 66.72% for the twenty-six weeks ended April 1, 2023.

Current wording

Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the thirty-nine weeks ended June 29, 2024 increased to $71,817,000 from $68,211,000 due to higher sales volume for the thirty-nine weeks ended June 29, 2024. Gross profit margin for the restaurant food and bar sales decreased during the thirty-nine weeks ended June 29, 2024 when compared to the thirty-nine weeks ended July 1, 2023 due to higher food costs partially offset by, among other things, the Recent Price Increases. Our gross profit margin for restaurant food and bar sales (calculated as gross profit reflected as a percentage of restaurant food and bar sales), was 65.91% for the thirty-nine weeks ended June 29, 2024 and 66.90% for the thirty-nine weeks ended July 1, 2023.

Previous wording

Package Store Sales. Gross profit for package store sales for the twenty-six weeks ended March 30, 2024 increased to $5,370,000 from $4,866,000 for the twenty-six weeks ended April 1, 2023. Our gross profit margin, (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 25.89% for the twenty-six weeks ended March 30, 2024 and 26.94% for the twenty-six weeks ended April 1, 2023. We anticipate that the gross profit margin for package liquor store merchandise will decrease for the balance of our fiscal year 2024 due to higher costs and a reduction in pricing of certain package store merchandise to be more competitive.

Current wording

Package Store Sales. Gross profit for package store sales for the thirty-nine weeks ended June 29, 2024 increased to $7,959,000 from $7,159,000 for the thirty-nine weeks ended July 1, 2023. Our gross profit margin, (calculated as gross profit reflected as a percentage of package liquor store sales), for package store sales was 25.65% for the thirty-nine weeks ended June 29, 2024 and 26.66% for the thirty-nine weeks ended July 1, 2023. We anticipate that the gross profit margin for package liquor store merchandise will decrease for the balance of our fiscal year 2024 due to higher costs and a reduction in pricing of certain package store merchandise to be more competitive.

Previous wording

Payroll and Related Costs. Payroll and related costs for the twenty-six weeks ended March 30, 2024 increased $1,547,000 or 5.56% to $29,357,000 from $27,810,000 for the twenty-six weeks ended April 1, 2023. Payroll and related costs for the twenty-six weeks ended March 30, 2024 were higher due primarily to the opening of our limited partnership owned restaurant location in Miramar, Florida (Store #25) in April 2023, the retail package liquor store in Miramar, Florida (Store #24) in March 2023 and higher salaries to employees to remain competitive with other potential employees in a tight labor market. Payroll and related costs as a percentage of total revenue was 31.50% for the twenty-six weeks ended March 30, 2024 and 32.46% of total revenue for the twenty-six weeks ended April 1, 2023.

Current wording

Payroll and Related Costs. Payroll and related costs for the thirty-nine weeks ended June 29, 2024 increased $2,250,000 or 5.31% to $44,658,000 from $42,408,000 for the thirty-nine weeks ended July 1, 2023. Payroll and related costs for the thirty-nine weeks ended June 29, 2024 were higher due primarily to the opening of the company owned restaurant in Hollywood, Florida (Store #19R) in March 2024, our limited partnership owned restaurant in Miramar, Florida (Store #25) in April 2023, the retail package liquor store in Miramar, Florida (Store #24) in March 2023, the retail package liquor store in Hollywood, Florida (Store #19P) in December 2022, the increase to the Florida minimum wage and higher salaries to employees to remain competitive with other potential employers in a tight labor market. Payroll and related costs as a percentage of total revenue was 31.38% for the thirty-nine weeks ended June 29, 2024 and 32.36% of total revenue for the thirty-nine weeks ended July 1, 2023.

Previous wording

Occupancy Costs. Occupancy costs (consisting of percentage rent, common area maintenance, repairs, real property taxes, amortization of leasehold purchases and rent expense associated with operating lease liabilities under ASC 842) for the twenty-six weeks ended March 30, 2024 increased $368,000 or 9.88% to $4,094,000 from $3,726,000 for the twenty-six weeks ended April 1, 2023. The increase in occupancy costs was primarily due to an increase in real property taxes.

Current wording

Occupancy Costs. Occupancy costs (consisting of percentage rent, common area maintenance, repairs, real property taxes, amortization of leasehold purchases and rent expense associated with operating lease liabilities under ASC 842) for the thirty-nine weeks ended June 29, 2024 increased $478,000 or 8.48% to $6,118,000 from $5,640,000 for the thirty-nine weeks ended July 1, 2023. The increase in occupancy costs was primarily due to an increase in real property taxes.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, insurance, professional costs, clerical and administrative overhead) for the twenty-six weeks ended March 30, 2024 increased $1,860,000 or 12.39% to $16,868,000 from $15,008,000 for the twenty-six weeks ended April 1, 2023. Selling, general and administrative expenses increased as a percentage of total revenue for the twenty-six weeks ended March 30, 2024 to 18.10% as compared to 17.52% for the twenty-six weeks ended April 1, 2023, due primarily to Store #24, and Store #25 being open for the full twenty-six weeks ended March 30, 2024, increased consultant fees to improve our accounting process, inflation and otherwise to increases in expenses across all categories.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses (consisting of general corporate expenses, including but not limited to advertising, professional costs, clerical and administrative overhead) for the thirty-nine weeks ended June 29, 2024 increased $980,000 or 33.95% to $3,867,000 from $2,887,000 for the thirty-nine weeks ended July 1, 2023 due primarily to increased consultant fees to improve our accounting process. Selling, general and administrative expenses increased as a percentage of total revenue for the thirty-nine weeks ended June 29, 2024 to 2.72% as compared to 2.20% for the thirty-nine weeks ended July 1, 2023.

Previous wording

***Depreciation and Amortization.***Depreciation and amortization expense for the twenty-six weeks ended March 30, 2024, which is included in selling, general and administrative expenses, increased $325,000 or 19.36% to $2,004,000 from $1,679,000 from the twenty-six weeks ended April 1, 2023. This increase is driven by the opening of Stores #24, and #25. As a percentage of total revenue, depreciation and amortization expense was 2.15% of revenue for the twenty-six weeks ended March 30, 2024 and 1.96% of revenue for the twenty-six weeks ended April 1, 2023.

Current wording

***Depreciation and Amortization.***Depreciation and amortization expense for the thirty-nine weeks ended June 29, 2024 increased $523,000 or 20.15% to $3,119,000 from $2,596,000 from the thirty-nine weeks ended July 1, 2023. This increase is driven by the opening of Store #19R, Store #25, Store #24 and Store #19P. As a percentage of total revenue, depreciation and amortization expense was 2.19% of revenue for the thirty-nine weeks ended June 29, 2024 and 1.98% of revenue for the thirty-nine weeks ended July 1, 2023.

Previous wording

Interest Expense, Net. Interest expense, net, for the twenty-six weeks ended March 30, 2024 decreased $20,000 to $517,000 from $537,000 for the twenty-six weeks ended April 1, 2023.

Current wording

Interest Expense, Net. Interest expense, net, for the thirty-nine weeks ended June 29, 2024 decreased $33,000 to $768,000 from $801,000 for the thirty-nine weeks ended July 1, 2023.

Previous wording

***Income Taxes.***Income tax for the twenty-six weeks ended March 30, 2024 was an benefit of $73,000, as compared to an expense of $353,000 for the twenty-six weeks ended April 1, 2023. This benefit is primarily due to the FICA Tip Credit that is estimated to be generated in our fiscal year 2024 offset by the tax expense that is anticipated based on the projected pre-tax income and permanent differences.

Current wording

***Income Taxes.***Income tax for the thirty-nine weeks ended June 29, 2024 was an expense of $209,000 as compared to an expense of $404,000 for the thirty-nine weeks ended July 1, 2023. This is primarily due the tax expense that is anticipated based on the projected pre-tax income and permanent differences.

Previous wording

Net Income. Net income for the twenty-six weeks ended March 30, 2024 increased $66,000 or 2.16% to $3,118,000 from $3,052,000 for the twenty-six weeks ended April 1, 2023 due primarily to increased revenue at our retail package liquor stores and restaurants offset by higher food costs and overall increased expenses, including but not limited to, increased consultant fees to improve our accounting process. As a percentage of revenue, net income for the twenty-six weeks ended March 30, 2024 is 3.35%, as compared to 3.56% for the twenty-six weeks ended April 1, 2023.

Current wording

Net Income. Net income for the thirty-nine weeks ended June 29, 2024 decreased $543,000 or 9.94% to $4,920,000 from $5,463,000 for the thirty-nine weeks ended July 1, 2023 due primarily to higher food costs and overall increased expenses, including but not limited to, increased consultant fees to improve our accounting process. As a percentage of revenue, net income for the thirty-nine weeks ended June 29, 2024 is 3.46%, as compared to 4.17% for the thirty-nine weeks ended July 1, 2023.

Previous wording

Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders. Net income attributable to stockholders for the twenty-six weeks ended March 30, 2024 decreased $470,000 or 18.64% to $2,051,000 from $2,521,000 for the twenty-six weeks ended April 1, 2023 due primarily to higher food costs, overall increased expenses, including but not limited to, increased consultant fees to improve our accounting process, and a higher portion of net income attributable to noncontrolling interests (specifically the operations of our Miramar location). As a percentage of revenue, net income attributable to stockholders for the twenty-six weeks ended March 30, 2024 is 2.20%, as compared to 2.94% for the twenty-six weeks ended April 1, 2023.

Current wording

Net Income Attributable to Flanigan’s Enterprises, Inc. Stockholders. Net income attributable to stockholders for the thirty-nine weeks ended June 29, 2024 decreased $954,000 or 23.12% to $3,172,000 from $4,126,000 for the thirty-nine weeks ended July 1, 2023 due primarily to higher food costs and overall increased expenses, including but not limited to, increased consultant fees to improve our accounting process and a higher portion of our net income attributable to noncontrolling interests (specifically the operation of our Miramar location). As a percentage of revenue, net income attributable to stockholders for the thirty-nine weeks ended June 29, 2024 is 2.23%, as compared to 3.15% for the thirty-nine weeks ended July 1, 2023.

Previous wording

During the twenty-six weeks ended March 30, 2024, we did not increase our menu prices. During the twenty-six weeks ended April 1, 2023 we increased menu prices for our food offerings (effective March 26, 2023) to target an aggregate increase to our food revenues of approximately 2.06% annually and we increased menu prices for our bar offerings (effective March 19, 2023) to target an increase to our bar revenues of approximately 5.65% annually to offset higher food and liquor costs and higher overall expenses. Prior to these increases we previously raised menu prices in the first quarter of our fiscal year 2022.

Current wording

During the thirty-nine weeks ended June 29, 2024, we did not increase our menu prices. During the thirty-nine weeks ended July 1, 2023 we increased menu prices for our food offerings (effective March 26, 2023) to target an aggregate increase to our food revenues of approximately 2.06% annually and we increased menu prices for our bar offerings (effective March 19, 2023) to target an increase to our bar revenues of approximately 5.65% annually to offset higher food and liquor costs and higher overall expenses. Prior to these increases we previously raised menu prices in the first quarter of our fiscal year 2022.

Previous wording

We fund our operations through cash from operations and borrowings from third parties. As of March 30, 2024, we had cash and cash equivalents of approximately $22,002,000, a decrease of $3,530,000 from our cash balance of $25,532,000 as of September 30, 2023. The decrease in cash as of March 30, 2024 was primarily due to (i) the payment of $3.92 million for insurance for the period from December 30, 2023 to December 30, 2024 and (ii) to the completion of the construction of our Company-owned restaurant in Hollywood, Florida (Store #19) which opened for business during the end of the second quarter of our fiscal year 2024.

Current wording

We fund our operations through cash from operations and borrowings from third parties. As of June 29, 2024, we had cash and cash equivalents of approximately $22,123,000, a decrease of $3,409,000 from our cash balance of $25,532,000 as of September 30, 2023. The decrease in cash as of June 29, 2024 was primarily due to (i) the payment of $3.92 million for insurance for the period from December 30, 2023 to December 30, 2024 and (ii) to the completion of the construction of our Company-owned restaurant in Hollywood, Florida (Store #19) which opened for business during the end of the second quarter of our fiscal year 2024.

Previous wording

The following table is a summary of our cash flows for the twenty-six weeks ended March 30, 2024 and April 1, 2023.

Current wording

The following table is a summary of our cash flows for the thirty-nine weeks ended June 29, 2024 and July 1, 2023.

Previous wording

We did not declare or pay a cash dividend on our capital stock during the twenty-six weeks ended March 30, 2024 or the twenty-six weeks ended April 1, 2023. Any future determination to pay cash dividends will be at our Board’s discretion and will depend upon our financial condition, operating results, capital requirements and such other factors as our Board deems relevant.

Current wording

During the thirty-nine weeks ended June 29, 2024 our Board of Directors declared a cash dividend of $0.50 per share to shareholders of record on June 14, 2024 and was made payable on June 28, 2024. During the thirty-nine weeks ended July 1, 2023, our Board of Directors declared a cash dividend of $0.45 per share to shareholders of record on June 12, 2023 and was made payable on June 26, 2023. Any future determination to pay cash dividends will be at our Board’s discretion and will depend upon our financial condition, operating results, capital requirements and such other factors as our Board deems relevant.

Previous wording

In addition to using cash for our operating expenses, we use cash generated from operations and borrowings to fund the development and construction of new restaurants and to fund capitalized property improvements for our existing restaurants. During the twenty-six weeks ended March 30, 2024, we acquired property and equipment and construction in progress of $4,314,000, (of which $206,000 was purchase deposits transferred to property and equipment, $715,000 was purchase deposits transferred to CIP, and $280,000 was property and equipment in accounts payable), including $437,000 for renovations to three (3) Company-owned restaurants. During the twenty-six weeks ended April 1, 2023, we acquired property and equipment and construction in progress of $3,698,000, (of which $114,000 was purchase deposits transferred to property and equipment and $439,000 was purchase deposits transferred to construction in progress), including $105,000 for renovations to two (2) existing limited partnership owned restaurants and $187,000 for renovations to three (3) Company-owned restaurants.

Current wording

In addition to using cash for our operating expenses, we use cash generated from operations and borrowings to fund the development and construction of new restaurants and to fund capitalized property improvements for our existing restaurants. During the thirty-nine weeks ended June 29, 2024, we acquired property and equipment and construction in progress of $5,282,000, (of which $255,000 was purchase deposits transferred to property and equipment, $715,000 was purchase deposits transferred to CIP, and $308,000 was property and equipment in accounts payable), including $437,000 for renovations to three (3) Company-owned restaurants. During the thirty-nine weeks ended July 1, 2023, we acquired property and equipment and construction in progress of $15,890,000, (of which $2,298,000 was purchase deposits transferred to property and equipment and $502,000 was purchase deposits transferred to construction in progress and $538,000 was construction in progress in accounts payable), including $105,000 for renovations to two (2) existing limited partnership owned restaurants and $294,000 for renovations to three (3) Company-owned restaurants.

Previous wording

As of March 30, 2024, we had long-term debt (including the current portion) of $22,501,000, as compared to $23,128,000 as of September 30, 2023.

Current wording

As of June 29, 2024, we had long-term debt (including the current portion) of $22,221,000, as compared to $23,128,000 as of September 30, 2023.

Previous wording

In February 2023, we determined that as of December 31, 2022, we did not meet the required Post-Distribution Basic Fixed Charge Coverage Ratio (the “Post-Distribution/Fixed Charge Covenant”) contained in each of our six (6) loans (the “Institutional Loans”) with our unrelated third party institutional lender (the “Institutional Lender’). On February 23, 2023, we received from the Institutional Lender, a written waiver of the non-compliance with the Post-Distribution/Fixed Charge Covenant (the “Covenant Non-Compliance”), pursuant to which, among other things, the Institutional Lender waived (1) the non-compliance as of December 31, 2022 and (2) their right to exercise certain remedies under the Institutional Loans, including the right to accelerate the indebtedness owed by us thereunder, resulting in the indebtedness under the Institutional Loans to be immediately due and payable, which would have had a material adverse effect on the Company. The Post-Distribution/Fixed Charge Covenant requires we maintain a ratio of at least 1.15 to 1.00 and for the twelve (12) months ended March 30, 2024 our ratio was calculated to be 1.57 to 1.00. As of March 30, 2024 we are in compliance with all of our loan covenant ratios and as a result, our classification of debt is appropriate.

Current wording

In February 2023, we determined that as of December 31, 2022, we did not meet the required Post-Distribution Basic Fixed Charge Coverage Ratio (the “Post-Distribution/Fixed Charge Covenant”) contained in each of our six (6) loans (the “Institutional Loans”) with our unrelated third party institutional lender (the “Institutional Lender’). On February 23, 2023, we received from the Institutional Lender, a written waiver of the non-compliance with the Post-Distribution/Fixed Charge Covenant (the “Covenant Non-Compliance”), pursuant to which, among other things, the Institutional Lender waived (1) the non-compliance as of December 31, 2022 and (2) their right to exercise certain remedies under the Institutional Loans, including the right to accelerate the indebtedness owed by us thereunder, resulting in the indebtedness under the Institutional Loans to be immediately due and payable, which would have had a material adverse effect on the Company. The Post-Distribution/Fixed Charge Covenant requires we maintain a ratio of at least 1.15 to 1.00 and for the twelve (12) months ended June 29, 2024 our ratio was calculated to be 1.52 to 1.00. As of June 29, 2024 we are in compliance with all of our loan covenant ratios and as a result, our classification of debt is appropriate.

Previous wording

During the first quarter of our fiscal year 2022, we entered into an agreement with a third party unaffiliated general contractor to re-build our restaurant located at 2505 N. University Drive, Building B, Hollywood, Florida (Store#19), which had been closed since October 2, 2018 due to damage caused by a fire and re-opened for business on March 26, 2024. The contract totaled $2,515,000 and through the end of the second quarter of our fiscal year 2024 we agreed to change orders increasing the total contract price by $1,445,000 to $3,960,000, of which $3,596,000 has been paid through March 30, 2024, and none has been paid subsequent to the end of the second quarter of our fiscal year 2024.

Current wording

During the first quarter of our fiscal year 2022, we entered into an agreement with a third party unaffiliated general contractor to re-build our restaurant located at 2505 N. University Drive, Building B, Hollywood, Florida (Store #19R), which had been closed since October 2, 2018 due to damage caused by a fire and re-opened March 26, 2024. The contract totaled $2,515,000 and through the end of the third quarter of our fiscal year 2024 we agreed to change orders increasing the total contract price by $1,507,000 to $4,022,000, of which $3,596,000 has been paid through June 29, 2024 and $308,000 has been paid subsequent to the end of the third quarter of our fiscal year 2024.

Previous wording

During the twenty-six weeks ended March 30, 2024, we have not made any change to our critical accounting policies. See Item 7, page 40 of our Annual Report on Form 10-K for our fiscal year ended September 30, 2023 for a discussion of significant accounting policies.

Current wording

During the thirty-nine weeks ended June 29, 2024, we have not made any change to our critical accounting policies. See Item 7, page 40 of our Annual Report on Form 10-K for our fiscal year ended September 30, 2023 for a discussion of significant accounting policies.