FLANIGANS ENTERPRISES INC MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

CAUTION REGARDING FORWARD-LOOKING STATEMENTS



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
October 2, 2021. 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.



OVERVIEW


As of January 1, 2022, Flanigan's Enterprises, Inc., a Florida corporation,
together with its subsidiaries ("we", "our", "ours" and "us" as the context
requires), (i) operates 27 units, consisting of restaurants, package liquor
stores and combination restaurants/package liquor stores that we either own or
have operational control over and partial ownership in; and (ii) franchises an
additional five units, consisting of two restaurants (one of which we operate)
and three combination restaurants/package liquor stores. The table below
provides information concerning the type (i.e. restaurant, package liquor store
or combination restaurant/package liquor store) and ownership of the units (i.e.
whether (i) we own 100% of the unit; (ii) the unit is owned by a limited
partnership of which we are the sole general partner and/or have invested in; or
(iii) the unit is franchised by us), as of January 1, 2022 and as compared to
October 2, 2021 and January 2, 2021. With the exception of "The Whale's Rib", a
restaurant we operate but do not own, all of the restaurants operate under our
service marks "Flanigan's Seafood Bar and Grill" or "Flanigan's" and all of the
package liquor stores operate under our service marks "Big Daddy's Liquors" or
"Big Daddy's Wine & Liquors".



                                      15

  Index

Types of Units                     January 1, October 2, January 2,
                                      2022       2021       2021

Company: Combined package and restaurant 3 3 3 (1) Restaurant only

                        7          7          7
Package store only                     7          7          7

Company Operated Restaurants Only:
Limited Partnerships                   8          8          8
Franchise                              1          1          1
Unrelated Third Party                  1          1          1

Total Company Owned/Operated Units     27         27         27
Franchised Units                       5          5          5      (2)


Notes:

(1) During the first quarter of our fiscal year 2019, our combination package
liquor store and restaurant located at 2505 N. University Drive, Hollywood,
Florida (Store #19) was damaged by a fire which has caused it to be closed since
the first quarter of our fiscal year 2019. Store #19 remains closed through
January 1, 2022.

(2) We operate a restaurant for one (1) franchisee. This unit is included in the table both as a franchise restaurant and as a restaurant operated by us.



Franchise Financial Arrangement: In exchange for our providing management and
related services to our franchisees and granting them the right to use our
service marks "Flanigan's Seafood Bar and Grill" and "Big Daddy's Liquors", our
franchisees (four of which are franchised to members of the family of our
Chairman of the Board, officers and/or directors), are required to (i) pay to us
a royalty equal to 1% of gross package store sales and 3% of gross restaurant
sales; and (ii) make advertising expenditures equal to between 1.5% to 3% of all
gross sales, as defined, based upon our actual advertising costs allocated
between stores, pro-rata, based upon gross sales.



Limited Partnership Financial Arrangement: We manage and control the operations
of all restaurants owned by limited partnerships, except the Fort Lauderdale,
Florida restaurant which is owned by a related franchisee. Accordingly, the
results of operations of all limited partnership owned restaurants, except the
Fort Lauderdale, Florida restaurant are consolidated into our operations for
accounting purposes. The results of operations of the Fort Lauderdale, Florida
restaurant are accounted for by us utilizing the equity method of accounting. In
general, until the investors' cash investment in a limited partnership
(including any cash invested by us and our affiliates) is returned in full, the
limited partnership distributes to the investors annually out of available cash
from the operation of the restaurant up to 25% of the cash invested in the
limited partnership, with no management fee paid to us. Any available cash in
excess of the 25% of the cash invested in the limited partnership distributed to
the investors annually, is paid one-half (½) to us as a management fee, with the
balance distributed to the investors. Once the investors in the limited
partnership have received, in full, amounts equal to their cash invested, an
annual management fee is payable to us equal to one-half (½) of cash available
to the limited partnership, with the other one half (½) of available cash
distributed to the investors (including us and our affiliates). As of January 1,
2022, all limited partnerships have returned all cash invested and we receive an
annual management fee equal to one-half (½) of the cash available for
distribution by the limited partnership. In addition to receipt of distributable
amounts from the limited partnerships, we receive a fee equal to 3% of gross
sales for use of the service mark "Flanigan's Seafood Bar and Grill".



                                      16

  Index

RESULTS OF OPERATIONS



                                            -----------------------Thirteen

Weeks Completed———————–

                                                January 1, 2022                             January 2, 2021
                                          Amount                                      Amount
                                      (In thousands)           Percent            (In thousands)           Percent
Restaurant food sales               $        22,205                 60.47       $        18,328                 59.54
Restaurant bar sales                          6,007                 16.35                 4,443                 14.43
Package store sales                           8,511                 23.18                 8,011                 26.03

Total Sales                         $        36,723                100.00       $        30,782                100.00

Franchise related revenues                      446                                         386
Rental income                                   199                                         187
Other operating income                           35                                          25

Total Revenue                       $        37,403                             $        31,380



Thirteen Weeks Completed Comparison January 1, 2022 and January 2, 2021.



Revenues.Total revenue for the thirteen weeks ended January 1, 2022 increased
$6,023,000 or 19.19% to $37,403,000 from $31,380,000 for the thirteen weeks
ended January 2, 2021 due primarily to increased package liquor store and
restaurant sales, increased menu prices and the comparatively less adverse
effects of COVID-19 on our operations during the thirteen weeks ended January 1,
2022 as compared with the thirteen weeks ended January 2, 2021. Effective
October 3, 2021 and then effective December 19, 2021 we increased menu prices
for our food offerings to target an increase to our food revenues of
approximately 2.38% and 3.34% annually, respectively, to offset higher food
costs and higher overall expenses. Effective December 12, 2021 we increased menu
prices for our bar offerings to target an increase to our bar revenues of
approximately 7.80% annually, (collectively the "Recent Price Increases"). Prior
to these increases, we previously raised menu prices in the third quarter of our
fiscal year 2021. We expect that the new package liquor store located at 7990
Davie Road Extension, Hollywood, Florida will open for business during our
fiscal year 2022 and we expect to generate revenue from it. We do not anticipate
that the restaurant located at 2505 N. University Drive, Hollywood, Florida,
which has been closed since October, 2018 due to a fire (the "Hollywood
restaurant") will open for business during our fiscal year 2022 and accordingly
we do not expect to generate any revenue from it.



Restaurant Food Sales. Restaurant revenue generated from the sale of food,
including non-alcoholic beverages, at restaurants totaled $22,205,000 for the
thirteen weeks ended January 1, 2022 as compared to $18,328,000 for the thirteen
weeks ended January 2, 2021. The increase in restaurant food sales for the
thirteen weeks ended January 1, 2022 as compared to restaurant food sales during
the thirteen weeks ended January 2, 2021 is attributable to menu price increases
and the comparatively more adverse effects of COVID-19 on our operations during
the thirteen weeks ended January 1, 2021 as compared with the thirteen weeks
ended January 1, 2022. Comparable weekly restaurant food sales (for restaurants
open for all of the thirteen weeks ended January 1, 2022 and January 2, 2021
respectively, which consists of nine restaurants owned by us, (excluding Store
#19 which was closed for the thirteen weeks ended January 1, 2022 and January 1,
2021 due to a fire on October 2, 2018) and eight restaurants owned by affiliated
limited partnerships) was $1,748,000 and $1,401,000 for the thirteen weeks ended
January 1, 2022 and January 2, 2021, respectively, an increase of 24.77%.
Comparable weekly restaurant food sales for Company owned restaurants only was
$858,000 and $681,000 for the thirteen weeks ended January 1, 2022 and January
2, 2021, respectively, an increase of 25.99%. Comparable weekly restaurant food
sales for affiliated limited partnership owned restaurants only was $890,000 and
$720,000 for the thirteen weeks ended January 1, 2022 and January 2, 2021
respectively, an increase of 23.61%.



Restaurant Bar Sales. Restaurant revenue generated from the sale of alcoholic
beverages at restaurants totaled $6,007,000 for the thirteen weeks ended January
1, 2022 as compared to $4,443,000 for the thirteen weeks ended January 2, 2021.
The increase in restaurant bar sales during the thirteen weeks ended January 1,
2022 is primarily due to the Recent Price Increases and the comparatively more
adverse effects of COVID-19 on our operations during the thirteen weeks ended
January 2, 2021 as compared with the thirteen weeks ended January 1, 2022, and
by the Recent Price Increases. Comparable weekly restaurant bar sales (for
restaurants open for all of the thirteen weeks ended January 1, 2022 and January
2. 2021 respectively, which consists of nine restaurants owned by us, (excluding
Store #19 which was closed for the thirteen weeks ended January 1. 2022 and
January 2, 2021 due to a fire on October 2, 2018), and eight restaurants owned
by affiliated limited partnerships) was $462,000 for the thirteen weeks ended
January 1, 2022 and $342,000 for the thirteen weeks ended January 2, 2021, an
increase of 35.09%. Comparable weekly restaurant bar sales for Company owned
restaurants only was $203,000 and $141,000 for the thirteen weeks ended January
1, 2022 and January 2, 2022, respectively, an increase of 43.97%. Comparable
weekly restaurant bar sales for affiliated limited partnership owned restaurants
only was $259,000 and $201,000 for the thirteen weeks ended January 1, 2022 and
January 2, 2021 respectively, an increase of 28.86%.

                                      17

  Index



Package Store Sales. Revenue generated from sales of liquor and related items at
package liquor stores totaled $8,511,000 for the thirteen weeks ended January 1,
2022 as compared to $8,011,000 for the thirteen weeks ended January 2, 2021, an
increase of $500,000. This increase was primarily due to increased package
liquor store traffic due to what appears to be continued increased demand for
package liquor store products resulting from COVID-19. The weekly average of
same store package liquor store sales, which includes nine (9) Company-owned
package liquor stores, (excluding Store #19, which was closed for the thirteen
weeks ended January 1, 2022 and January 2, 2021 due to a fire on October 2,
2018), was $675,000 and $616,000 for the thirteen weeks ended January 1, 2022
and January 2, 2021 respectively, an increase of 9.58 %.



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 January 1,
2022 increased $6,528,000 or 21.68% to $36,638,000 from $30,110,000 for the
thirteen weeks ended January 2, 2021. The increase was primarily due to payroll
and an expected general increase in food costs, 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
2022. Operating costs and expenses increased as a percentage of total revenue to
approximately 97.95% in the first quarter of our fiscal year 2021 from 95.95% in
the first quarter of our fiscal year 2021.



Gross profit. Gross margin is calculated by subtracting cost of goods sold from sales.



Restaurant Food Sales and Bar Sales. Gross profit for food and bar sales for the
thirteen weeks ended January 1, 2022 increased to $17,879,000 from $15,249,000
for the thirteen weeks ended January 2, 2021. 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 63.37% for the thirteen weeks
ended January 1, 2022 and 66.97% for the thirteen weeks ended January 2, 2021.
Gross profit margin for restaurant food and bar sales decreased during the first
quarter of our fiscal year 2022 when compared to the first quarter of our fiscal
year 2021 due to higher food costs, partially offset by, among other things, by
the Recent Price Increases.


Package Store Sales. Gross profit for package store sales for the thirteen weeks
ended January 1, 2022 increased to $2,171,000 from $2,160,000 for the thirteen
weeks ended January 2, 2021, due primarily to increased package liquor store
traffic which we believe is due to what appears to be continued increased demand
caused by COVID-19. Our gross profit margin, (calculated as gross profit
reflected as a percentage of package liquor store sales), for package store
sales was 25.51% for the thirteen weeks ended January 1, 2022 and 26.96% for the
thirteen weeks ended January 2, 2021.



Payroll and Related Costs. Payroll and related costs for the thirteen weeks
ended January 1, 2022 increased $2,773,000 or 29.30% to $12,236,000 from
$9,463,000 for the thirteen weeks ended January 2, 2021. Payroll and related
costs for the thirteen weeks ended January 1, 2022 were higher due primarily to
increased performance bonuses and higher costs for employees such as cooks.
Payroll and related costs as a percentage of total revenue was 32.71% in the
thirteen weeks ended January 1, 2022 and 30.16% of total revenue in the thirteen
weeks ended January 2, 2021.



                                      18

  Index

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 thirteen weeks ended January 1, 2022 decreased $117,000 or 6.48% to
$1,698,000 from $1,806,000 for the thirteen weeks ended January 2, 2021. The
decrease in occupancy costs was primarily due to the elimination of rent for our
restaurant location which we are developing located at 14301 West Sunrise
Boulevard, Sunrise, Florida (Store #85), the real property and improvements of
which we purchased on March 2, 2021. We anticipate that our occupancy costs will
increase throughout the balance of our fiscal year 2022 due to the commencement
of rent for our retail package liquor store which we are developing located at
11225 Miramar Parkway, #245, Miramar, Florida (Store #24) and our restaurant
location which we are developing located at 11225 Miramar parkway, #250,
Miramar, Florida (Store #25) during the second quarter of our fiscal year 2022,
offset by the termination of rent for our combination retail package liquor
store and restaurant located at 5450 N. State Road 7, North Lauderdale, Florida
(Store #40), the real property and improvements of which we purchased on
December 31, 2020.



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 January 1, 2022 increased $563,000 or
10.30% to $6,031,000 from $5,468,000 for the thirteen weeks ended January 2,
2021. Selling, general and administrative expenses decreased as a percentage of
total revenue in the thirteen weeks ended January 1, 2022 to 16.12% as compared
to 17.42% in the thirteen weeks ended January 2, 2021. We anticipate that our
selling, general and administrative expenses as a percentage of total revenue
will increase throughout the balance of our fiscal year 2022 due primarily to
increases across all categories.



Depreciation and Amortization. Depreciation and amortization expense for the
thirteen weeks ended January 1, 2022 decreased $75,000 or 9.69% to $699,000 from
$774,000 from the thirteen weeks ended January 2, 2021. As a percentage of total
revenue, depreciation and amortization expense was 1.83% of revenue in the
thirteen weeks ended January 1, 2022 and 2.47% of revenue in the thirteen weeks
ended January 2, 2021.


Interest Expense, Net. Interest expense, net, for the thirteen weeks ended
January 1, 2022 decreased $86,000 to $193,000 from $279,000 for the thirteen
weeks ended January 2. 2021. Interest expense, net, decreased for the thirteen
weeks ended January 1, 2022 due to the forgiveness of principal and all accrued
interest on the borrowing by certain of our limited partnerships of an
additional $3.35 million of 2nd PPP Loans during the first quarter of our fiscal
year 2022, offset by interest on (i) our borrowing of $2,200,000 during the
second quarter of our fiscal year 2021 from an unrelated third party lender used
to finance our purchase of the real property and improvements located at 14301
West Sunrise Boulevard, Sunrise, Florida (Store #85) (the "$2.2 Million
Borrowing") and (ii) our borrowing of $4,300,000 during the third quarter of our
fiscal year 2021 from an unrelated third party lender to re-finance our mortgage
loan of our property located at 13105 - 13205 Biscayne Boulevard, North Miami,
Florida (Store #20).



Income Taxes. Income tax for the thirteen weeks ended January 1, 2022 was an
expense of $147,000, as compared to a benefit of $4,000 for the thirteen weeks
ended January 2, 2021. Income taxes for the thirteen weeks ended January 2, 2021
was a benefit of $4,000 which represents the net difference in the deferred tax
assets plus the current state income tax expense.



Net Income. Net income for the thirteen weeks ended January 1, 2022 increased
$2,906,000 or 281.59% to $3,938,000 from $1,032,000 for the thirteen weeks ended
January 2, 2021 due primarily to the forgiveness of debt of certain of the 2nd
PPP Loans, increased revenue at our retail package liquor stores and restaurants
and the Recent Price Increases, partially offset by higher food costs and
overall expenses. As a percentage of revenue, net income for the thirteen weeks
ended January 1, 2022 is 10.53%, as compared to 3.29% in the thirteen weeks
ended January 2, 2021.



                                      19

  Index

Net Income Attributable to Flanigan's Enterprises, Inc. Stockholders. Net income
attributable to Flanigan's Enterprises, Inc. Stockholders for the thirteen weeks
ended January 1, 2022 increased $784,000 or 100.51% to $1,564,000 from $780,000
for the thirteen weeks ended January 2, 2021 due primarily to the forgiveness of
debt of certain of the PPP Loans, increased revenue at our retail package liquor
stores and restaurants and the Recent Price Increases, partially offset by
higher food costs and overall expenses. As a percentage of revenue, net income
attributable to stockholders for the thirteen weeks ended January 1, 2022 is
4.18%, as compared to 2.49% for the thirteen weeks ended January 2, 2021.



New Sponsored Restaurants



As new restaurants open, our income from operations will be adversely affected
due to our obligation to advance pre-opening costs, including but not limited to
pre-opening rent for the new locations. During the first quarter of our fiscal
year 2022, we had one new restaurant location in Sunrise, Florida and a second
new restaurant location in Miramar, Florida in the development stage, each
location to house a new "Flanigan's". Rent for the new restaurant location in
Miramar, Florida commences during the second quarter of our fiscal year 2022.



Menu price increases and trends

During the first quarter of our fiscal year 2022, we increased menu prices for
our food offerings (effective October 3, 2021 and December 19, 2021,
respectively) to target an aggregate increase to our food revenues of
approximately 8.83% annually and we increased menu prices for our bar offerings
(effective December 12, 2021) to target an increase to our bar revenues of
approximately 7.80% annually to offset higher food and liquor costs and higher
overall expenses. Prior to these increases, we previously raised menu prices in
the third quarter of our fiscal year 2021.



COVID-19 has and will continue to materially and adversely affect our restaurant
business for what may be a prolonged period of time. This damage and disruption
has resulted from events and factors that were impossible for us to predict and
are beyond our control. As a result, COVID-19 has materially adversely affected
our results of operations for our fiscal year 2021, first quarter of our fiscal
year 2022 and will, in all likelihood, impact our results of operations,
liquidity and/or financial condition throughout our fiscal year 2022. The extent
to which our restaurant business may be adversely impacted and its effect on our
operations, liquidity and/or financial condition cannot be accurately predicted.



Cash and capital resources



We fund our operations through cash from operations and borrowings from third
parties. As of January 1, 2022, we had cash of approximately $33,602,000, an
increase of $926,000 from our cash balance of $32,676,000 as of October 2, 2021.

During the second quarter of our fiscal year 2021, certain of the entities
owning the limited partnership stores (the "LP's"), as well as the store we
manage but do not own (the "Managed Store") (collectively, the "Borrowers"),
applied for and received loans from an unrelated third party lender (the
"Lender") pursuant to the Paycheck Protection Program (the "PPP") under the
Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") enacted
March 27, 2020, in the aggregate principal amount of approximately $3.98 million
(the "2nd PPP Loans"), of which approximately: (i) $3.46 million was loaned to
six (6) of the LP's; and (ii) $0.52 million was loaned to the Managed Store.
During first quarter of our fiscal year 2022, we applied for forgiveness for all
PPP Loans, including the Managed Store, and as of January 1, 2022, the entire
amount of principal and accrued interest was forgiven under the 2nd PPP Loans.
During the third quarter of our fiscal year 2021, we generated net proceeds of
$2.8 million from the re-finance of our mortgage loan encumbering the real
property and improvements located at 13105 - 13205 Biscayne Boulevard, North
Miami, Florida where our Flanigan's Seafood Bar and Grill restaurant and Big
Daddy's Liquors retail package liquor store operate (Store #20) with an
unrelated third-party lender, increasing the principal amount borrowed from $1.5
million to $4.3 million. During the second quarter of our fiscal year 2021, we
closed on the purchase of the real property and improvements located at 14301
West Sunrise Boulevard, Sunrise, Florida where we are developing a "Flanigan's
Seafood Bar and Grill" restaurant (Store #85) for $4,800,000. We financed this
acquisition with a loan from an unrelated third-party lender in the principal
amount of $2.2 million and paid cash for the balance. During the first quarter
of our fiscal year 2021, we closed on the purchase of the real property and
improvements located at 5450 N. State Road 7, North Lauderdale, Florida where we
operate a combination "Flanigan's Seafood Bar and Grill" restaurant and "Big
Daddy's Liquors" package liquor store (Store #40) and paid $1,200,000 cash
at
closing.

                                      20

  Index

Notwithstanding the negative effects of COVID-19 on our operations, we believe
that our current cash availability from our cash on hand, positive cash flow
from operations and borrowed funds will be sufficient to fund our operations and
planned capital expenditures for at least the next twelve months.



Cash Flows


The following table is a summary of our cash flows for the first thirteen weeks of fiscal years 2022 and 2021.


                                                ---------Thirteen Weeks Ended--------
                                             January 1, 2022            January 2, 2021
                                                           (in thousands)
Net cash provided by operating activities   $            4,531         $   

3,770

Net cash used in investing activities                   (1,979 )                   (1,568 )
Net cash used in financing activities                   (1,626 )           

(1,096 )

Net Increase in Cash and Cash Equivalents                  926             

1,106

Cash and Cash Equivalents, Beginning                    32,676             

29,922

Cash and Cash Equivalents, Ending           $           33,602         $   
       31,028



We did not declare or pay a cash dividend on our capital stock in the first
quarter of our fiscal year 2022 or the first quarter of our fiscal year 2021.
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.



Capital Expenditures


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 thirteen weeks ended January 1, 2022, we acquired
property and equipment and construction in progress of $2,402,000, (of which
$4,000 was deposits recorded in other assets and $140,000 was purchase deposits
transferred to construction in process as of October 2, 2021), including
$587,000 for renovations to two (2) existing limited partnership owned
restaurants and one (1) Company owned restaurants. During the thirteen weeks
ended January 2, 2021, we acquired property and equipment and construction in
progress of $1,105,000, (of which $11,000 was deposits recorded in other assets
and $18,000 was purchase deposits transferred to construction in process as of
October 3, 2020), including $89,000 for renovations to three (3) Company owned
restaurants.



                                      21

  Index

All of our owned units require periodic refurbishing in order to remain
competitive. We anticipate the cost of this refurbishment in our fiscal year
2022 will be approximately $1,000,000, excluding construction/renovations to
Store #19 (our combination package liquor store and restaurant which is being
rebuilt due to damages caused by a fire), Store #85 (our Sunrise, Florida
restaurant location in development), Store #24 (our Miramar, Florida package
store location in development) and Store #25 (our Miramar, Florida restaurant
location in development), which funds will be provided from operations, subject
to reimbursement of all or a part of the cost of construction/renovations
through private offerings for the limited partnerships which will own Store
#85
and Store #25.



Long Term Debt


As of January 1, 2022, we had long term debt of $19,651,000, as compared to
$26,904,000 as of January 2, 2021, and $22,115,000 as of October 2, 2021. Our
long term debt decreased as of January 1, 2022 as compared to October 2, 2021
due to the forgiveness of all principal and accrued interest of the 2nd PPP
Loans, offset by $1,861,000 for financed insurance premiums, less any payments
made on account thereof. As of January 1, 2022, we are in compliance with the
covenants of all loans with our lender.



Construction Contracts


a) Extension of 7990 Davie Road, Hollywood, Florida (Store #19 – “Big Daddy’s Wines and Liquors”)



During the third quarter of our fiscal year 2019, we entered into an agreement
with a third party unaffiliated general contractor for site work at this
location totaling $1,618,000, (i) to connect the real property where this
restaurant operated (Store #19) to city sewer and (ii) to construct a new
building on the adjacent parcel of real property for the operation of a package
liquor store. During our fiscal years 2020 and 2021, we agreed to change orders
to the agreement for additional construction services increasing the total
contract price by $536,000 to $2,156,000, of which $1,427,000 of the total
amount obligated has been paid through January 1, 2022 and an additional
$255,000 has been paid subsequent to the end of the first quarter our fiscal
year 2022.


(b) 2505 N. University Drive, Hollywood, Florida (Store #19 - "Flanigan's")



During the third quarter of our fiscal year 2019, we entered into an agreement
with an unaffiliated third party architect for design and development services
totaling $77,000 for the re-build of our restaurant located at 2505 N.
University Drive, Hollywood, Florida (Store #19), which has been closed since
October 2, 2018 due to damages caused by a fire, of which $62,000 has been paid.
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 at
this location totaling $2,515,000, of which none has been paid.



(c) 14301 Sunrise Blvd West, Sunrise, Florida (Store #85)



During the third quarter of our fiscal year 2019, we also entered into an
agreement with an unaffiliated third party design group for design and
development services of our new location at 14301 W. Sunrise Boulevard, Sunrise,
Florida 33323 (Store #85) for a total contract price of $122,000. During our
fiscal year 2020, we agreed upon amendments to the $122,000 Contract for
additional design and development services which had the effect of increasing
the total contract price by $18,000 to $140,000, of which $131,000 has been paid
through January 1, 2022. Additionally, during the fourth quarter of our fiscal
year 2020, we entered into an agreement with a third party unaffiliated general
contractor for interior renovations at this location totaling $1,236,000 and
through the first quarter our fiscal year 2022 we agreed to change orders to the
agreement for additional interior renovations increasing the total contract
price by $197,000 to $1,433,000, of which $1,268,000 has been paid through
January 1, 2022 and none has been paid subsequent to the end of the first
quarter of our fiscal year 2022.



                                      22

  Index

(D) 11225 Miramar Drive#250, Miramar, Florida (“Flanigan’s”)

During the fourth quarter of our fiscal year 2019, we entered into a Lease
Agreement with a non-affiliated third party, (the "Landlord") to rent
approximately 6,000 square feet of commercial space for a restaurant location in
a shopping center at 11225 Miramar Parkway, #250, Miramar, Florida (Store #25),
which shopping center was under construction. During the second quarter of our
fiscal year 2021, we entered into an Architectural Professional Services
Agreement with a third-party unaffiliated architect for design and development
services for this, new location (Store #25) for a total contract price of
$73,850, which contract price has been paid in full through January 1, 2022.
During the fourth quarter of our fiscal year 2021, we received notification from
the Landlord that it had completed substantially all of the Landlord's work
under the Lease Agreement and was delivering possession of the leased premises
to us. During the first quarter of our fiscal year 2022, we entered into an
agreement with a third party unaffiliated general contractor for interior
renovations at this location totaling $1,421,000, of which none has been paid.



(e) 11225 Miramar Drive#245, Miramar, Florida (“Big Daddy’s Wine and Liquors”)

During the fourth quarter of our fiscal year 2019, we entered into a Lease
Agreement with a non-affiliated third party, (the "Landlord") to rent
approximately 2,000 square feet of commercial space for a retail package liquor
store location in a shopping center at 11225 Miramar Parkway, #245, Miramar,
Florida (Store #24), which shopping center was under construction. During the
second quarter of our fiscal year 2021, we entered into an Architectural
Professional Services Agreement with a third-party unaffiliated architect for
design and development services for this, new location (Store #24) for a total
contract price of $18,650, which contract price has been paid in full through
January 1, 2022. During the fourth quarter of our fiscal year 2021, we received
notification from the Landlord that it had completed substantially all of the
Landlord's work under the Lease Agreement and was delivering possession of the
leased premises to us. During the first quarter of our fiscal year 2022, we
entered into an agreement with a third party unaffiliated general contractor for
interior renovations at this location totaling $317,000, of which none has
been
paid.



Purchase Commitments



In order to ensure adequate supply of baby back ribs for our restaurants for
calendar year 2022, on October 4, 2021, we entered into a purchase agreement
with our current rib supplier, whereby we agreed to purchase approximately
$10,414,000 of baby back ribs during calendar year 2022 from this vendor at
market cost. Our purchase agreement provides for the purchase of 2.25 & Down
Baby Back Ribs, at a monthly cost of the average market price per pound of
the
prior 4 weeks.


Although we plan to source all of our rib supply from this supplier, we believe there are several other alternative suppliers available, if required.


Working Capital



The table below summarizes the current assets, current liabilities, and working
capital for our fiscal quarters ended January 1, 2022, January 2, 2021 and our
fiscal year ended October 2, 2021.



Item                   Jan. 1, 2022       Jan. 2, 2021        Oct. 2, 2021
                                         (in Thousands)

Current Assets        $       42,655     $        38,023     $       39,790
Current Liabilities           24,936              28,217             20,223
Working Capital       $       17,719     $         9,806     $       19,567




                                      23

  Index

Our working capital increased during our fiscal quarter ended January 1, 2022
from our working capital for our fiscal quarter ended January 2, 2021primarily
due to (i) our receipt of $3.35 million from the 2nd PPP Loans during the second
quarter of our fiscal year 2021 and (ii) our receipt of $2.8 million from our
re-financing of our mortgage loan encumbering the real property and improvements
located at 13105 - 13205 Biscayne Boulevard, North Miami, Florida where our
Flanigan's Seafood Bar and Grill restaurant and Big Daddy's Liquors retail
package liquor store operate (Store #20), increasing the principal amount
borrowed from $1.5 million to $4.3 million during the third quarter of our
fiscal year 2021. Our working capital decreased during our fiscal quarter ended
January 1, 2022 from our working capital of our fiscal year ended October 2,
2021 due to expenditures related to construction in progress for the development
of our new restaurant location in Sunrise, Florida (Store # 85) and for the
development of our new package store location in Hollywood, Florida (Store
#19 -
package).



While there can be no assurance due to, among other things, unanticipated
expenses or unanticipated decline in revenues, or both, we believe that our cash
on hand, positive cash flow from operations and borrowed funds will adequately
fund operations, debt reductions and planned capital expenditures throughout our
fiscal year 2022.


Off-balance sheet arrangements

The Company has no off-balance sheet arrangements.


Inflation



The primary inflationary factors affecting our operations are food, beverage and
labor costs. A large number of restaurant personnel are paid at rates based upon
applicable minimum wage and increases in minimum wage directly affect labor
costs. We have endeavored to offset the adverse effects of cost increases by
increasing our menu prices.

© Edgar Online, source Previews

About Jonathan Bell

Check Also

13% of 401(k) Participants Borrowed Against Plans in 2021 – Here’s Why It’s a Dangerous Move | Economic news

If you are aware of any local business openings or closings, please let us know …