8-K 1 c92098e8vk.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 9, 2005 QUALITY DINING, INC. (Exact name of registrant as specified in its charter) Indiana 000-23420 35-1804902 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 4220 Edison Lakes Parkway Mishawaka, IN 46545 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (574) 271-4600 N/A (Former name or former address, if changed since last report) 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 (see General Instruction A.2. below): / / 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)) ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW a) Following a review of its accounting policy and in consultation with its independent registered public accounting firm, PricewaterhouseCoopers LLP, the Company has determined that it had incorrectly calculated its straight-line rent expense and related deferred rent liability. As a result, on February 9, 2005, the Company's Board of Directors concluded that the Company's previously filed financial statements for fiscal years through 2003 and the first three interim periods in 2004 should be restated. Historically, when accounting for leases with renewal options, the Company recorded rent expense on a straight-line basis over the initial non-cancelable lease term without regard for renewal options. The Company depreciated its buildings, leasehold improvements and other long-lived assets on those properties over a period that included both the initial non-cancelable term of the lease and all 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 lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty such that at lease inception the renewal option is reasonably assured of being exercised. The Company will also restate its financial statements to recognize depreciation on its buildings, leasehold improvements and other long-lived assets over the expected lease term where the lease term is shorter than the useful life of the assets. The cumulative effect of the restatement through October 26, 2003 and August 1, 2004 will be an increase in the deferred rent liability of $1,453,000 and $1,667,000, respectively, and a decrease in property and equipment of $1,180,000 and $1,433,000, respectively. As a result, accumulated deficit at October 31, 2004 and August 1, 2004 will increase by $2,633,000 and $2,958,000, respectively. Rent expense for the fiscal year ended October 26, 2003 and the 40 weeks ended August 1, 2004 will increase by approximately $255,000 and $214,000, respectively, and depreciation expense will increase by $218,000 and $253,000, respectively. Income tax expense will also decrease by $142,000 for the 40 weeks ended August 1, 2004. Net income for the fiscal year ended October 26, 2003 and the 40 weeks period ended August 1, 2004 will decrease by $473,000, or $0.04 per diluted share, and $325,000, or $0.03 per diluted share, respectively. The Company also determined that $2,599,000 in fixed assets were improperly classified as Assets Held for Sale on October 26, 2003. The Company has reclassified these assets from Held for Sale to Property and Equipment on the October 26, 2003 balance sheet. This change did not affect results of operations, cash flows or total assets of the Company. The restatement will not have any impact on the Company's previously reported total cash flows, sales or same-restaurant sales or compliance with any covenant under its credit facility or other debt instruments. The financial impact of the adjustments described above for the periods presented is as follows: QUALITY DINING, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Summary of Restatement Impacts 52 Weeks Ended October 26, 2003 (In thousands, except per share data)

QUALITY DINING, INC. CONSOLIDATED BALANCE SHEET Restatement Impacts As of October 26, 2003 (Dollars in thousands)

QUALITY DINING, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Summary of Restatement Impacts 16 Weeks Ended February 15, 2004 (In thousands, except per share data)

QUALITY DINING, INC. CONSOLIDATED BALANCE SHEET Restatement Impacts As of February 15, 2004 (Dollars in thousands)

QUALITY DINING, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Summary of Restatement Impacts 12 Weeks Ended May 9, 2004 (In thousands, except per share data)

QUALITY DINING, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Summary of Restatement Impacts 28 Weeks Ended May 9, 2004 (In thousands, except per share data)

QUALITY DINING, INC. CONSOLIDATED BALANCE SHEET Restatement Impacts As of May 9, 2004 (Dollars in thousands)

QUALITY DINING, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Summary of Restatement Impacts 12 Weeks Ended August 1, 2004 (In thousands, except per share data)

QUALITY DINING, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Summary of Restatement Impacts 40 Weeks Ended August 1, 2004 (In thousands, except per share data)

QUALITY DINING, INC. CONSOLIDATED BALANCE SHEET Restatement Impacts As of August 1, 2004 (Dollars in thousands)

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 hereunto duly authorized. Dated: February 15, 2005 QUALITY DINING, INC. By: /s/ John C. Firth ----------------------------------- Name: John C. Firth Title: Vice President and General Counsel

QUALITY DINING INC 8-K