In 2011 we maintained a $45 million unsecured revolving line of credit with a major financial institution
(the Line of Credit) which was scheduled to expire on September 30, 2012. As of January 3, 2012, there were no borrowings outstanding under the Line of Credit and there were outstanding letters of credit totaling approximately $8.9
million. Any borrowings under the Line of Credit will bore interest at the financial institutions prime rate or at LIBOR plus a percentage not to exceed 1.375% based on a Lease Adjusted Leverage Ratio as defined in the Line of Credit
agreement. The Line of Credit agreement also required compliance with a Fixed Charge Coverage Ratio, a Lease Adjusted Leverage Ratio and certain non-financial covenants. At January 3, 2012, we were in compliance with these covenants. Any
interest on the Line of Credit was payable quarterly and all related borrowings were required to be repaid on or before September 30, 2012.
On February 17, 2012, we entered into a new $75 million unsecured revolving line of credit (New Line of Credit) with that same financial institution, which replaces our existing Line of
Credit. The New Line of Credit expires on January 31, 2017, and may be used for working capital and other general corporate purposes. We expect to utilize the New Line of Credit principally for letters of credit that are required to support certain
of our self-insurance programs and for working capital and construction requirements as needed. The terms of the New Line of Credit are substantially similar to the prior Line of Credit. However, any borrowings under the New Line of Credit will bear
interest at either LIBOR plus a percentage not to exceed 1.50%, or at a rate ranging from the financial institutions prime rate to 0.75% below the financial institutions prime rate based on a Lease Adjusted Leverage Ratio as defined in
the Line of Credit agreement. The New Line of Credit agreement also requires compliance with a Fixed Charge Coverage Ratio, a Lease Adjusted Leverage Ratio and certain non-financial covenants. While we have the New Line of Credit in place and it can
be currently drawn upon, it is possible that creditors could place limitations or restrictions on the ability of borrowers in general to draw on existing credit facilities. At this time, however, we have no indication that any such limitations or
restrictions are likely to occur.
Our capital expenditures during fiscal 2012 will continue to be significant as we currently plan to open as
many as 16 new restaurants (including one relocation of an existing restaurant) during the year, in addition to our necessary maintenance and key initiative-related capital expenditures. As of February 27, 2012, we have entered into seven
signed leases for new restaurant locations expected to open in fiscal 2012. Additionally we expect to enter into several more leases during fiscal 2012. We currently anticipate our total capital expenditure for fiscal 2012, including all expenditure
categories and net of expected tenant improvement allowances we may receive from landlords, will be approximately $90 million to $95 million. We expect to fund our expected capital expenditures for fiscal 2012 with current cash and investment
balances on hand, expected cash flow from operations and expected tenant improvement allowances of approximately $10.6 million. Our future cash requirements will depend on many factors, including the pace of our expansion, conditions in the retail
property development market, construction costs, the nature of the specific sites selected for new restaurants, and the nature of the specific leases and associated tenant improvement allowances available, if any, as negotiated with landlords.
We significantly depend on our expected cash flow from operations, coupled with agreed-upon landlord tenant improvement allowances, to fund
the majority of our planned capital expenditures for 2012 and 2013. If our business does not generate enough cash flow from operations as expected, or if our landlords are unable to honor their agreements with us, and replacement funding sources are
not otherwise available to us from borrowings under our credit facility or other alternatives, we may not be able to expand our operations at the pace currently planned.
As of February 27, 2012, we had an uncollected outstanding tenant improvement allowance from one landlord in the amount of $1.2 million for one of our restaurants which opened in fiscal 2008. Our
lease with that landlord allows us to offset or reduce our rent payable in the event that our tenant improvement allowances cannot be collected. We do not believe that this matter will have a material impact on our overall liquidity, and we are
currently seeking the legal enforcement of all of our rights under the lease as we concurrently attempt to negotiate a final settlement of this matter.
Our cash, cash equivalents and marketable securities (including money market funds, treasury bills, agency bonds, municipal and bank securities and domestic corporate obligations) totaled approximately
$53.1 million, as of January 3, 2012.
We currently believe that our expected cash flow from operations, cash and investment balances on
hand, agreed-upon tenant improvement allowances and our new $75 million credit facility, should be sufficient, in the