UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: March 1, 2005
(Date of earliest event reported)
MAIN STREET RESTAURANT GROUP, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 000-18668
DELAWARE 11-2948370
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
5050 N. 40TH STREET, SUITE 200, PHOENIX, ARIZONA 85018
(Address of principal executive offices, including zip code)
(602) 852-9000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)
[] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item 2.02 Results of Operations and Financial Condition
Main Street Restaurant Group, Inc. (the "Company") issued a news release
dated March 2, 2005, entitled "Main Street Restaurant Group, Inc. Announces 2004
Fourth Quarter Results", a copy of which is furnished herewith as Exhibit 99.1
to this Current Report on Form 8-K.
The information under this Item 2.02 in this Current Report on Form 8-K,
including Exhibit 99.1 hereto, shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section. The information
in this Current Report on Form 8-K shall not be deemed to be incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as expressly set forth by specific reference in such
filing.
The Company does not have, and expressly disclaims, any obligation to
release publicly any updates or any changes in the Company's expectations or any
change in events, conditions, or circumstances on which any forward-looking
statement is based. The text included with this Report is available on our
website located at www.mainandmain.com, although we reserve the right to
discontinue that availability at any time.
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review
As a result of a recent SEC Pronouncement on lease accounting and many Form
8-Ks and amendments to annual reports filed by other, larger restaurant
companies about lease accounting, we performed a review of all of our leases and
our accounting policy for leases. As a result of this review and in consultation
with our independent registered public accounting firm of Mayer Hoffman McCann,
P.C. we determined that the change in the computation of straight-line rent
expense and related deferred rent liability applied to us and that it was
appropriate to adjust the way we had been previously recording these amounts. As
a result, on March 1, 2005, the Company's Board of Directors concluded that the
Company's previously filed financial statements for fiscal years 2002 and 2003
and for the first three quarters of fiscal 2004 should be restated.
Historically, when accounting for leases with renewal options, the Company
has recorded rent expense on a straight-line basis over the initial
non-cancelable lease term, with the term commencing when actual rent payments
began. The Company depreciated its buildings, leasehold improvements and other
long-lived assets on those properties over a 240-month period that included, in
the case of many of our leases, both the initial non-cancelable term of the
lease and some option periods provided for in the lease (or the useful life of
the assets if shorter). The Company will restate its financial statements to
recognize rent expense on a straight-line basis over the entire lease term,
including option periods where failure to exercise such options would result in
an economic penalty.
The Company estimates that the cumulative effect of the restatement through
fiscal 2004 will be an increase in the deferred rent liability of approximately
$1.2 million. There is no material net impact on any of the deferred tax
accounts. As a result, retained earnings and stockholders equity at the end of
fiscal 2004 will decrease by approximately $1.2 million. Rent expense for fiscal
years ended 2002, 2003, and 2004 was increased by approximately $173,000,
$178,000, and $190,000, respectively, and for each of the first three quarters
of fiscal 2004 by approximately $47,000. The restatement will decrease diluted
net earnings per share by approximately $.01, $.01, and $.01 for fiscal years
2002, 2003, and 2004, respectively, and less than $.01 for each of the first
three quarters of fiscal 2004. Since the restatement was a non-cash item, it
will not have any impact on the Company's previously reported cash flows, sales
or same-restaurant sales, or compliance with any covenant under its credit
facility or other debt instruments for any period.
As a result of the restatement, the financial statements contained in the
Company's prior filings with the SEC should no longer be relied upon.
The Company's Audit Committee discussed the matters disclosed in this
Current Report on Form 8-K pursuant to this Item 4.02 with the Company's
independent registered public accounting firm, Mayer Hoffman McCann, P.C.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
Exhibit No. Exhibit Description
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99.1 Press Release dated March 2, 2005-Announcing
2004 Fourth Quarter Results.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Main Street Restaurant Group, Inc.
Dated: March 2, 2005 /s/ Michael Garnreiter
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Michael Garnreiter
Executive Vice President and Chief Financial
Officer