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**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION****Washington,DC  20549**

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**FORM 10-Q**

| **ý**                                                          | ** Quarterly Report Pursuant to Section 13 or  15(d) of the Securities and Exchange Act of 1934** |
|---------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|
|                                                                |                                                                                                   |
| **For  the Quarterly Period Ended    July  4, 2001** |
|                                                                |                                                                                                   |
| **Commission  File Number    333-62775**             |

** **

| **BERTUCCI’S CORPORATION**                         |
|---------------------------------------------------------|
|                                                    | **** |   |
| (Exact name of  registrant as specified in its charter) |

 

 

| **Delaware**                                      | **06-1311266**         |
|---------------------------------------------------|------------------------|
|                                                   |
| (State or other  jurisdiction of                  | (I.R.S. Employer       |
| incorporation or  organization)                   | Identification Number) |
|                                              |                   |
|                                              |                   |
| **155  Otis Street, Northborough, Massachusetts** | **01532-2414**         |
|                                                   |
| (Address of principal  executive offices)         | (Zip Code)             |

 

| **(508)  351-2500**                                         |
|-------------------------------------------------------------|
|                                                             |
| Registrant’s telephone  number, including area code:   |
|                                                        |
|                                                        |
| **NE  Restaurant Company, Inc.**                            |
| **5  Clock Tower Place**                                    |
| **Maynard,  MA  01754**                                |
| **978-897-1400**                                            |
|                                                             |
| Registrant’s previous  name, address and phone number: |

Indicate by check mark whether theregistrant (1) has filed all reports required to be filled by Section 13 or15(d) of the Securities Exchange Act of the 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file suchreports), and (2) has been subject to the filing requirements for the past 90days.  Yes ý  No  o

2,978,955 shares of the registrant’sCommon Stock were outstanding on August 17, 2001.

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BERTUCCI’SCORPORATION(formerly NE Restaurant Company, Inc.)FORM 10-Q

TABLE OF CONTENTS

 

|       |     |                                                                                                     |                                                                                                                                       |   |
|------------|----------|----------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
| PART I:    |     | FINANCIAL INFORMATION                                                                                    |                                                                                                                                       |
|       |     |                                                                                                     |                                                                                                                                       |
|       | Item 1.  |    Financial Statements:                                                                       |                                                                                                                                       |
|       |     | 1)                                                                                                       | Consolidated  Balance Sheets July 4, 2001 (Unaudited) and January 3, 2001                                                                  |   |
|       |     |                                                                                                     |                                                                                                                                       |   |
|       |     | 2)                                                                                                       | Consolidated  Statements of Operations For the Thirteen and Twenty Six Weeks Ended July 4,  2001 (Unaudited) and June 28, 2000 (Unaudited) |   |
|       |     |                                                                                                     |                                                                                                                                       |   |
|       |     | 3)                                                                                                       | Consolidated  Statement of Stockholders’ Equity for the Twenty Six Weeks Ended July 4, 2001  (Unaudited)                              |   |
|       |     |                                                                                                     |                                                                                                                                       |   |
|       |     | 4)                                                                                                       | Consolidated  Statements of Cash Flow for the Twenty Six Weeks July 4, 2001 (Unaudited) and  June 28, 2000 (Unaudited)                     |   |
|       |     |                                                                                                     |                                                                                                                                       |   |
|       |     | 5)                                                                                                       | Notes  to Consolidated Financial Statements                                                                                                |   |
|       |     |                                                                                                     |                                                                                                                                       |   |
|       | Item  2. |    Management’s Discussion and Analysis of  Results of Operations and Financial Condition |                                                                                                                                       |
|       |     |                                                                                                     |                                                                                                                                       |   |
|       | Item  3. |    Quantitative and Qualitative Disclosures  about Market Risk                                 |                                                                                                                                       |
|       |     |                                                                                                     |                                                                                                                                       |   |
| PART II:   |     | OTHER INFORMATION                                                                                        |                                                                                                                                       |
|       | Item 1.  |                                                                                                     | Legal Proceedings                                                                                                                          |   |
|       | Item  2. |                                                                                                     | Changes  in Securities and Use of Proceeds                                                                                                 |   |
|       | Item 3.  |                                                                                                     | Defaults  upon Senior Securities                                                                                                           |   |
|       | Item  4. |                                                                                                     | Submission  of Matters to a Vote of Security Holders                                                                                       |   |
|       | Item 5.  |                                                                                                     | Other Information                                                                                                                          |   |
|       | Item 6.  |                                                                                                     | Exhibits  and Reports on Form 8-K                                                                                                          |   |
|       |     |                                                                                                     |                                                                                                                                       |   |
| SIGNATURES |     |                                                                                                     |

PART  I:           FINANCIALINFORMATIONItem 1. Financial Statements 

| **BERTUCCI'S  CORPORATION**                                                              |
|------------------------------------------------------------------------------------------|
| **(formerly NE  Restaurant Company, Inc.)**                                              |
| **CONSOLIDATED BALANCE SHEETS**                                                          |
| (In thousands, except share data)                                                        |
|                                                                                     |
|                                                                                     | (Unaudited) |   |   |   |
|                                                                                     | July 4, |   | January 3, |   |
|                                                                                     | 2001 |   | 2001 |   |
|                                                                                     |  |   |  |   |
| **ASSETS**                                                                               |   |   |   |   |
|                                                                                     |   |   |   |   |
| Current Assets:                                                                          |   |   |   |   |
|                                                                                     | Cash and cash equivalents | $ | 44,163 |   | $ | 7,602 |   |
|                                                                                     | Receivables | 1,443 |   | 838 |   |
|                                                                                     | Inventories | 899 |   | 1,885 |   |
|                                                                                     | Prepaid expenses and other current assets | 1,347 |   | 2,617 |   |
|                                                                                     | Assets held for sale - short term | - |   | 200 |   |
|                                                                                     | Prepaid and current deferred income taxes | - |   | 5,433 |   |
|                                                                                     |   |  |   |  |   |
|                                                                                     | Total current assets | 47,852 |   | 18,575 |   |
|                                                                                     |  |   |  |   |
| Property and equipment, at cost:                                                         |   |   |   |   |
|                                                                                     | Land and land right | 2,647 |   | 7,858 |   |
|                                                                                     | Buildings | 6,606 |   | 12,549 |   |
|                                                                                     | Leasehold improvements | 49,823 |   | 83,973 |   |
|                                                                                     | Furniture and equipment | 28,166 |   | 50,455 |   |
|                                                                                     |   |  |   |  |   |
|                                                                                     | 87,242 |   | 154,835 |   |
|                                                                                     | Less - Accumulated depreciation | (22,291 | ) | (40,196 | ) |
|                                                                                     |   |  |   |  |   |
|                                                                                     | 64,951 |   | 114,639 |   |
|                                                                                     | Construction work in process | 1,344 |   | 2,917 |   |
|                                                                                     |   |  |   |  |   |
|                                                                                     | Net property and equipment | 66,295 |   | 117,556 |   |
|                                                                                     |   |   |   |   |
| Goodwill, net                                                                            | 27,266 |   | 28,404 |   |
| Deferred finance costs, net                                                              | 5,517 |   | 8,025 |   |
| Liquor licenses                                                                          | 1,806 |   | 3,014 |   |
| Deferred taxes, noncurrent                                                               | 6,313 |   | 6,451 |   |
| Other assets, net                                                                        | 204 |   | 1,570 |   |
|                                                                                     |  |   |  |   |
|                                                                                     | Total Assets | $ | 155,253 |   | $ | 183,595 |   |
|                                                                                     |  |   |  |   |
|                                                                                     | LIABILITIES AND STOCKHOLDERS' EQUITY |   |   |   |   |
|                                                                                     |   |   |   |   |
| Current Liabilities:                                                                     |   |   |   |   |
|                                                                                     | Mortgage loans payable - current portion | $ | - |   | $ | 1,578 |   |
|                                                                                     | Accounts payable | 7,955 |   | 14,510 |   |
|                                                                                     | Accrued expenses | 12,281 |   | 18,531 |   |
|                                                                                     | Income taxes payable | 8,997 |   | 286 |   |
|                                                                                     |   |  |   |  |   |
|                                                                                     | Total current liabiliites | 29,233 |   | 34,905 |   |
|                                                                                     |   |   |   |   |   |
| Mortgage loan payable, net of current portion                                            | - |   | 39,737 |   |
| Bonds payable                                                                            | 100,000 |   | 100,000 |   |
| Deferred rent and other long-term liabilites                                             | 2,235 |   | 4,887 |   |
|                                                                                     |  |   |  |   |
|                                                                                     | Total liabilities | 131,468 |   | 179,529 |   |
| Commitments and contingencies                                                            |   |   |   |   |
| Stockholders' equity:                                                                    |   |   |   |   |
|                                                                                     | Common stock, $.01 par value | 37 |   | 37 |   |
|                                                                                     | Authorized - 4,000,000 shares |   |   |   |   |
|                                                                                     | Issued and outstanding - 3,666,370 shares |   |   |   |   |
|                                                                                     | Less treasury stock-687,415 shares at cost | (8,088 | ) | (8,088 | ) |
|                                                                                     | Additional paid-in capital | 29,004 |   | 29,004 |   |
|                                                                                     | Retained earnings (Accumulated deficit) | 2,832 |   | (16,887 | ) |
|                                                                                     |   |  |   |  |   |
|                                                                                     | Total stockholders' equity | 23,785 |   | 4,066 |   |
|                                                                                     |   |  |   |  |   |
|                                                                                     | Total Liabiliites and Stockholders' Equity | $ | 155,253 |   | $ | 183,595 |   |
|                                                                                     |  |   |  |   |
|                                                                                     |   |   |   |   |
| The accompanying notes are an integral part of these  consolidated financial statements. |   |   |   |   |
|                                                                                     |   |   |   |   |
|                                                                                          |  |  |  |  |  |  |  |  |  |

 

| **BERTUCCI'S CORPORATION**                                                               |
|------------------------------------------------------------------------------------------|
| **(formerly NE Restaurant Company, Inc.)**                                               |
| **CONSOLIDATED STATEMENTS OF OPERATIONS**                                                |
| Unaudited                                                                                |
| (In thousands, except share and  per share data)                                         |
|                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                     | Thirteen weeks ended |   | Twenty six weeks ended |   |
|                                                                                     |  |   |  |   |
|                                                                                     | July 4, |   | June 28, |   | July 4, |   | June 28, |   |
|                                                                                     | 2001 |   | 2000 |   | 2001 |   | 2000 |   |
|                                                                                     |  | ** ** |  | ** ** |  | ** ** |  | ** ** |
|                                                                                     |   |   |   |   |   |   |   |   |
| Net sales                                                                                | $ | 41,013 |   | $ | 71,345 |   | $ | 110,827 |   | $ | 138,380 |   |
|                                                                                     |  |   |  |   |  |   |  |   |
|                                                                                     |   |   |   |   |   |   |   |   |
| Cost of sales and expenses:                                                              |   |   |   |   |   |   |   |   |
|                                                                                     | Cost of sales | 9,801 |   | 18,799 |   | 27,871 |   | 36,362 |   |
|                                                                                     | Operating expenses | 25,225 |   | 40,614 |   | 65,692 |   | 79,572 |   |
|                                                                                     | General and administrative expenses | 2,831 |   | 4,135 |   | 6,640 |   | 8,623 |   |
|                                                                                     | Closed restaurant expenses | 250 |   | - |   | 250 |   | - |   |
|                                                                                     | Deferred rent, depreciation and amortization and preopening  expenses | 3,382 |   | 4,559 |   | 7,858 |   | 9,089 |   |
|                                                                                     |   |  |   |  |   |  |   |  |   |
|                                                                                     | Total cost of sales and expenses | 41,489 |   | 68,107 |   | 108,311 |   | 133,646 |   |
|                                                                                     |   |  |   |  |   |  |   |  |   |
|                                                                                     | (Loss) income from operations | (476 | ) | 3,238 |   | 2,516 |   | 4,734 |   |
|                                                                                     |   |   |   |   |   |   |   |   |
| Interest expense, net                                                                    | 2,512 |   | 3,706 |   | 6,293 |   | 7,380 |   |
|                                                                                     |  |   |  |   |  |   |  |   |
|                                                                                     |   |   |   |   |   |   |   |   |
| Loss before income tax benefit and Brinker Sale                                          | (2,988 | ) | (468 | ) | (3,777 | ) | (2,646 | ) |
|                                                                                     |   |   |   |   |   |   |   |   |
| Income tax benefit                                                                       | (914 | ) | (17 | ) | (1,046 | ) | (723 | ) |
|                                                                                     |  |   |  |   |  |   |  |   |
|                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                     | Net loss before Brinker Sale | (2,074 | ) | (451 | ) | (2,731 | ) | (1,923 | ) |
|                                                                                     |   |   |   |   |   |   |   |   |
| Gain on Brinker Sale, net of tax                                                         | 22,450 |   | - |   | 22,450 |   | - |   |
|                                                                                     |  |   |  |   |  |   |  |   |
|                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                     | Net income (loss) | $ | 20,376 |   | $ | (451 | ) | $ | 19,719 |   | $ | (1,923 | ) |
|                                                                                     |  |   |  |   |  |   |  |   |
|                                                                                     |   |   |   |   |   |   |   |   |
| Basic income (loss) per share:                                                           |   |   |   |   |   |   |   |   |
|                                                                                     | Loss per share before Brinker Sale | $ | (0.70 | ) | $ | (0.15 | ) | $ | (0.92 | ) | $ | (0.64 | ) |
|                                                                                     | Gain on Brinker Sale, net of income tax | 7.54 |   | - |   | 7.54 |   | - |   |
|                                                                                     |   |  |   |  |   |  |   |  |   |
|                                                                                     | Basic income (loss) per share | $ | 6.84 |   | $ | (0.15 | ) | $ | 6.62 |   | $ | (0.64 | ) |
|                                                                                     |  |   |  |   |  |   |  |   |
|                                                                                     | Weighted Average Shares Outstanding | 2,978,955 |   | 2,981,281 |   | 2,978,955 |   | 2,983,966 |   |
|                                                                                     |   |   |   |   |   |   |   |   |
| Diluted income (loss) per share:                                                         |   |   |   |   |   |   |   |   |
|                                                                                     | Income (loss) per share before Brinker Sale | $ | (0.70 | ) | $ | (0.15 | ) | $ | (0.92 | ) | $ | (0.64 | ) |
|                                                                                     | Gain on Brinker Sale, net of income tax | 6.71 |   | - |   | 6.71 |   | - |   |
|                                                                                     |   |  |   |  |   |  |   |  |   |
|                                                                                     | Diluted income (loss) per share | $ | 6.01 |   | $ | (0.15 | ) | $ | 5.79 |   | $ | (0.64 | ) |
|                                                                                     |  |   |  |   |  |   |  |   |
|                                                                                     |   |   |   |   |   |   |   |   |
|                                                                                     | Weighted Average Shares Outstanding | 3,344,658 |   | 2,981,281 |   | 3,344,658 |   | 2,983,966 |   |
|                                                                                     |   |   |   |   |   |   |   |   |
| The accompanying notes are an integral part of these  consolidated financial statements. |
|                                                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

| **BERTUCCI'S CORPORATION**                                                               |
|------------------------------------------------------------------------------------------|
| **(formerly NE Restaurant Company, Inc.)**                                               |
| **CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY**                            |
| (In  thousands, except share data)                                                       |
|                                                                                     |
|                                                                                     | Common  Stock |   | Treasury  Stock |   |   |   |   |   |   |   |
|                                                                                     |  |   |  |   |   |   |   |   |   |   |
|                                                                                     | Number  of   Shares |   | $ | .01 per   Share |   | Number  of Shares |   | Amount |   | Additional  Paid - In Capital |   | (Accumulated Deficit)   Retained   Earnings |   | Total   Stockholders'  Equity |   |
|                                                                                     |  |   |  |   |  |   |  |   |  |   |  |   |
| Balance January 3, 2001                                                                  | 3,666,370 |   | $ | 37 |   | (687,415 | ) | $ | (8,088 | ) | $ | 29,004 |   | $ | (16,887 | ) | $ | 4,066 |   |
|                                                                                     | Net income |   |   |   |   |   |   |   |   |   |   | 19,719 |   | 19,719 |   |
|                                                                                     |   |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
| Balance July 4, 2001 (Unaudited)                                                         | 3,666,370 |   | $ | 37 |   | (687,415 | ) | $ | (8,088 | ) | $ | 29,004 |   | $ | 2,832 |   | $ | 23,785 |   |
|                                                                                     |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
|                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The accompanying notes are an  integral part of these consolidated financial statements. |   |

 

| **BERTUCCI'S  CORPORATION   (formerly NE Restaurant Company, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOW **(In  thousands) |
|-------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                | (Unaudited) |   |
|                                                                                                                                | Twenty  six weeks ended |   |
|                                                                                                                                |  |   |
|                                                                                                                                | July  4, 2001 |   | June  28, 2000 |   |
|                                                                                                                                |  |   |  |   |
|                                                                                                                                |   | ** ** |   | ** ** |
| Cash  flows from operating activities                                                                                               |   |   |   |   |
|                                                                                                                                | Net  loss | $ | 19,719 |   | $ | (1,923 | ) |
|                                                                                                                                | Less  gain on Brinker Sale, net of tax | (22,450 | ) | - |   |
|                                                                                                                                | Adjustments  to reconcile net loss to net cash used in operating activities: |   |   |   |   |
|                                                                                                                                | Depreciation,  amortization and deferred rent | 6,894 |   | 8,475 |   |
|                                                                                                                                | Changes  in operating assets and liabilities |   |   |   |   |
|                                                                                                                                | Inventories | 129 |   | (284 | ) |
|                                                                                                                                | Prepaid  expenses, receivables and other | 1,056 |   | 788 |   |
|                                                                                                                                | Accrued  expenses | (2,992 | ) | 1,856 |   |
|                                                                                                                                | Income  taxes payable | (718 | ) | (1,076 | ) |
|                                                                                                                                | Accounts  payable | (3,628 | ) | (4,805 | ) |
|                                                                                                                                | Other  operating assets and liabilities | (24 | ) | (473 | ) |
|                                                                                                                                |   |  |   |  |   |
|                                                                                                                                | Total  adjustments | 717 |   | 4,481 |   |
|                                                                                                                                |   |  |   |  |   |
| Net  cash (used in) provided by operating activities                                                                                | (2,014 | ) | 2,558 |   |
|                                                                                                                                |  |   |  |   |
|                                                                                                                                |   |   |   |   |
| Cash  flows from investing activities                                                                                               |   |   |   |   |
|                                                                                                                                | Additions  to property and equipment | (8,791 | ) | (6,265 | ) |
|                                                                                                                                | Proceeds  from sale of restaurant properties | 200 |   | 1,484 |   |
|                                                                                                                                | Acquisition  of liquor licenses | - |   | (65 | ) |
|                                                                                                                                | Franchise/development  fees paid | - |   | (40 | ) |
|                                                                                                                                |   |  |   |  |   |
| Net  cash used for investing activities                                                                                             | (8,591 | ) | (4,886 | ) |
|                                                                                                                                |  |   |  |   |
|                                                                                                                                |   |   |   |   |
| Cash  flows from financing activities                                                                                               |   |   |   |   |
|                                                                                                                                | Borrowings  of mortgage loans | - |   | 1,100 |   |
|                                                                                                                                | Payments  of mortgage loans and capital lease obligations | (421 | ) | (656 | ) |
|                                                                                                                                | Repurchase  of common stock to treasury | - |   | (71 | ) |
|                                                                                                                                | Principal  payments under capital lease obligations | - |   | (47 | ) |
|                                                                                                                                | Net  proceeds from Brinker Sale | 47,587 |   | - |   |
|                                                                                                                                |   |  |   |  |   |
| Net  cash provided by financing activities                                                                                          | 47,166 |   | 326 |   |
|                                                                                                                                |  |   |  |   |
|                                                                                                                                |   |   |   |   |
| Net  increase (decrease) in cash                                                                                                    | 36,561 |   | (2,002 | ) |
| Cash,  beginning of period                                                                                                          | 7,602 |   | 7,579 |   |
|                                                                                                                                |  |   |  |   |
| Cash,  end of period                                                                                                                | $ | 44,163 |   | $ | 5,577 |   |
|                                                                                                                                |  |   |  |   |
|                                                                                                                                |   |   |   |   |
| Supplemental  Disclosure of Cash Flow Information:                                                                                  |   |   |   |   |
|                                                                                                                                | Cash  paid for interest, net of amounts capitalized | $ | 6,375 |   | $ | 7,159 |   |
|                                                                                                                                |   |  |   |  |   |
|                                                                                                                                | Cash  paid (refunds received) for income taxes | $ | (328 | ) | $ | 85 |   |
|                                                                                                                                |   |  |   |  |   |
|                                                                                                                                |   |   |   |   |
| The  accompanying notes are an integral part of these consolidated financial  statements.                                           |   |   |   |   |
|                                                                                                                                     |  |  |  |  |  |  |  |  |  |  |

**BERTUCCI’SCORPORATION(formerly NE Restaurant Company, Inc.)Notes to Consolidated FinancialStatements**July4, 2001(Unaudited)

| 1.     | On  August 16, 2001, NE Restaurant Company, Inc. formally changed its name to  Bertucci’s Corporation.  The unaudited  consolidated financial statements (the "Unaudited Financial  Statements") presented herein have been prepared by Bertucci’s  Corporation (formerly NE Restaurant Company, Inc.) and include all of its  subsidiaries (collectively, the "Company") after elimination of  intercompany accounts and transactions, without audit, and, in the opinion of  management, reflect all adjustments of a normal recurring nature necessary  for a fair statement of the interim periods presented.  Certain information and footnote  disclosures normally included in financial statements prepared in accordance  with generally accepted accounting principles ("GAAP") have been  omitted, although the Company believes that the disclosures included are adequate  to make the information presented not misleading.  It is suggested that the Unaudited Financial Statements be read  in conjunction with the consolidated financial statements and notes included  in the Company's Form 10-K. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 2.     | In June 2000, the Financial Accounting  Standards Board (“FASB”) issued Statement of Financial Accounting Standard  (“SFAS”) No. 138, *Accounting for Derivative Instruments and Hedging  Activities – An Amendment of FASB Statement No. 133*, which amended  SFAS No. 133 and added guidance for certain derivative instruments and  hedging activities.  The new standard,  SFAS No. 133 as amended by SFAS No. 138, requires recognition of all  derivatives as either assets or liabilities at fair value.  One of the primary amendments to SFAS No.  133 that is covered by SFAS No. 138 establishes an exemption for normal  purchases and normal sales that will be delivered in quantities expected to  be used or sold over a reasonable period in the normal course of  business.  The adoption of this  standard effective January 4, 2001 did not have a material impact on the  Company’s fiscal position or results of operations.                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.     | In June 2001, the FASB issued SFAS No.  141, *Business  Combinations*and SFAS No. 142, *Goodwill and Other Intangible Assets*.  SFAS No. 141 requires business  combinations initiated after June 30, 2001 to be accounted for using the  purchase method of accounting and broadens the criteria for recording  intangible assets separate from goodwill.   SFAS No. 142 requires the use of a nonamortization approach to account  for purchased goodwill and certain intangibles.  The Company is required to adopt these provisions on the first  day of fiscal 2002.  The Company is  currently evaluating the provisions of SFAS No. 141 and SFAS No. 142 and has  not yet determined the impact of adopting the provisions.                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.     | The  Company had operated one Sal & Vinnie’s Sicilian Steakhouse as a result  of its 1998 acquisition of Bertucci’s Inc. In December 2000, the Company  abandoned the restaurant in exchange for termination of its lease obligation  and recorded a $2.0 million loss on abandonment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | On  April 12, 2001, the Company completed its sale of 40 Chili’s and seven On The  Border restaurants to the franchisor Brinker International, Inc. of Dallas,  Texas (“Brinker”) (the “Brinker Sale”).   Total consideration, subject to closing adjustments, was $93.5  million. Brinker acquired the inventory, facilities, equipment, management  teams associated with these restaurants, as well as the four Chili’s  restaurants currently under development by the Company. Further, Brinker  assumed the mortgage debt on the Company’s Chili’s and On The Border  restaurants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The  pro forma Consolidated Statements of Operations presented below reflect (a)  the recognition of the Brinker Sale; and (b) the abandonment of Sal &  Vinnie’s as if the dispositions occurred on December 30, 1999. Accordingly,  operating results of the Brinker restaurants are removed for all periods  presented.  Sal & Vinnie’s was  abandoned in December 2000 and, therefore, its operating results are removed  from all fiscal 2000 periods presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

 

| **BERTUCCI'S CORPORATION**                         |
|----------------------------------------------------|
|                                               | **(formerly NE  Restaurant Company, Inc.)** |
| **PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS** |
| (Unaudited)                                        |
| (In thousands, except share and  per share data)   |
| Thirteen Weeks Ended July 4, 2001                  |
|                                               |   |   |   |   |   |   |
|                                               | As |   |   |   |   |   |
|                                               | Reported |   | Brinker Sale |   | Pro Forma |   |
|                                               |  |   |  |   |  |   |
|                                               |   |   |   |   |   |   |
| Net sales                                          | $ | 41,013 |   | $ | 2,700 |   | $ | 38,313 |   |
|                                               |  |   |  |   |  |   |
|                                               |   |   |   |   |   |   |
| Cost of sales and expenses                         |   |   |   |   |   |   |
|                                               | Cost of sales | 9,801 |   | 835 |   | 8,966 |   |
|                                               | Operating expenses | 25,225 |   | 2,453 |   | 22,772 |   |
|                                               | General and administrative expenses | 2,831 |   | 271 |   | 2,560 |   |
|                                               | Closed restaurant expenses | 250 |   | - |   | 250 |   |
|                                               | Deferred rent, depreciation and amortization and preopening  expenses | 3,382 |   | 96 |   | 3,286 |   |
|                                               |   |  |   |  |   |  |   |
|                                               | Total cost of sales and expenses | 41,489 |   | 3,655 |   | 37,834 |   |
|                                               |   |  |   |  |   |  |   |
|                                               | (Loss) income from operations | (476 | ) | (955 | ) | 479 |   |
|                                               |   |   |   |   |   |   |
| Interest expense, net                              | 2,512 |   | 199 |   | 2,313 |   |
|                                               |  |   |  |   |  |   |
|                                               |   |   |   |   |   |   |
| Loss before income tax benefit                     | (2,988 | ) | (1,154 | ) | (1,834 | ) |
|                                               |   |   |   |   |   |   |
| Income tax benefit                                 | (914 | ) | (462 | ) | (452 | ) |
|                                               |  |   |  |   |  |   |
|                                               |   |   |   |   |   |   |
|                                               | Net loss | $ | (2,074 | ) | $ | (692 | ) | $ | (1,382 | ) |
|                                               |  |   |  |   |  |   |
|                                               |   |   |   |   |   |   |
| Basic and diluted loss per share                   | $ | (0.70 | ) | $ | (0.23 | ) | $ | (0.47 | ) |
|                                               |  |   |  |   |  |   |
|                                               |   |   |   |   |   |   |
|                                               | Weighted average shares outstanding | 2,978,955 |   | 2,978,955 |   | 2,978,955 |   |
|                                                    |  |  |  |  |  |  |  |  |  |  |  |  |

 

| **BERTUCCI'S  CORPORATION (formerly NE Restaurant Company,  Inc.) PRO FORMA CONSOLIDATED STATEMENT OF  OPERATIONS **(Unaudited)   (In thousands, except share and per share data) 26 Weeks Ended July 4, 2001 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                              |   |   |   |   |   |   |
|                                                                                                                                                                                                                              | As Reported |   | Brinker Sale |   | Pro Forma |   |
|                                                                                                                                                                                                                              |  |   |  |   |  |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |
| Net sales                                                                                                                                                                                                                         | $ | 110,827 |   | $ | 36,527 |   | $ | 74,300 |   |
|                                                                                                                                                                                                                              |  |   |  |   |  |   |
| Cost of sales and expenses                                                                                                                                                                                                        |   |   |   |   |   |   |
|                                                                                                                                                                                                                              | Cost of sales | 27,871 |   | 10,329 |   | 17,542 |   |
|                                                                                                                                                                                                                              | Operating expenses | 65,691 |   | 21,643 |   | 44,048 |   |
|                                                                                                                                                                                                                              | General and administrative expenses | 6,640 |   | 1,222 |   | 5,418 |   |
|                                                                                                                                                                                                                              | Closed restaurant expenses | 250 |   | - |   | 250 |   |
|                                                                                                                                                                                                                              | Deferred rent, depreciation and amortization and preopening  expenses | 7,858 |   | 1,380 |   | 6,478 |   |
|                                                                                                                                                                                                                              |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                              | Total cost of sales and expenses | 108,310 |   | 34,574 |   | 73,736 |   |
|                                                                                                                                                                                                                              |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                              | Income from operations | 2,517 |   | 1,953 |   | 564 |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |
| Interest expense, net                                                                                                                                                                                                             | 6,293 |   | 1,871 |   | 4,422 |   |
|                                                                                                                                                                                                                              |  |   |  |   |  |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |
| (Loss) income before income tax benefit                                                                                                                                                                                           | (3,776 | ) | 82 |   | (3,858 | ) |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |
| Income tax (benefit) provision                                                                                                                                                                                                    | (1,046 | ) | 33 |   | (1,079 | ) |
|                                                                                                                                                                                                                              |  |   |  |   |  |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |
| Net (loss) income                                                                                                                                                                                                                 | $ | (2,730 | ) | $ | 49 |   | $ | (2,779 | ) |
|                                                                                                                                                                                                                              |  |   |  |   |  |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |
| Basic (loss) income per share                                                                                                                                                                                                     | $ | (0.92 | ) | $ | 0.02 |   | $ | (0.94 | ) |
|                                                                                                                                                                                                                              |  |   |  |   |  |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |
| Basic weighted average shares outstanding                                                                                                                                                                                         | 2,978,955 |   | 2,978,955 |   | 2,978,955 |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |
| Diluted (loss) income per share                                                                                                                                                                                                   | $ | (0.92 | ) | $ | 0.01 |   | $ | (0.93 | ) |
|                                                                                                                                                                                                                              |  |   |  |   |  |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |
| Diluted weighted average shares outstanding                                                                                                                                                                                       | 2,978,955 |   | 3,344,658 |   | 2,978,955 |   |

 

| **BERTUCCI'S  CORPORATION (formerly NE Restaurant Company,  Inc.)  PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS**(Unaudited)  (In thousands, except share and per share data)  Thirteen Weeks Ended June 28 , 2000 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                      | As  Reported |   | Brinker Sale |   | Sal & Vinnie's  Abandonment |   | Pro Forma |   |
|                                                                                                                                                                                                                      |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Net sales                                                                                                                                                                                                                 | $ | 71,345 |   | $ | 34,826 |   | $ | 757 |   | $ | 35,762 |   |
|                                                                                                                                                                                                                      |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Cost of sales and expenses                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                      | Cost of sales | 18,799 |   | 9,756 |   | 262 |   | 8,781 |   |
|                                                                                                                                                                                                                      | Operating expenses | 40,614 |   | 19,289 |   | 418 |   | 20,907 |   |
|                                                                                                                                                                                                                      | General and administrative expenses | 4,135 |   | 1,077 |   | - |   | 3,058 |   |
|                                                                                                                                                                                                                      | Deferred  rent, depreciation and amortization and preopening expenses | 4,559 |   | 1,717 |   | 44 |   | -  2,798 |   |
|                                                                                                                                                                                                                      |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                      | Total cost of sales and expenses | 68,107 |   | 31,839 |   | 724 |   | 35,544 |   |
|                                                                                                                                                                                                                      |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                      | Income from operations | 3,238 |   | 2,987 |   | 33 |   | 218 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Interest expense, net                                                                                                                                                                                                     | 3,706 |   | 1,559 |   | - |   | 2,147 |   |
|                                                                                                                                                                                                                      |  |   |  |   |  |   |  |   |
| (Loss) income before income tax (benefit) provision                                                                                                                                                                       | (468 | ) | 1,428 |   | 33 |   | (1,929 | ) |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Income tax (benefit) provision                                                                                                                                                                                            | (17 | ) | 571 |   | 13 |   | (601 | ) |
|                                                                                                                                                                                                                      |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                      | Net (loss) income | $ | (451 | ) | $ | 857 |   | $ | 20 |   | $ | (1,328 | ) |
|                                                                                                                                                                                                                      |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Basic (loss) income per share:                                                                                                                                                                                            | $ | (0.15 | ) | $ | 0.29 |   | $ | 0.01 |   | $ | (0.45 | ) |
|                                                                                                                                                                                                                      |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Basic weighted average shares outstanding                                                                                                                                                                                 | 2,981,281 |   | 2,981,281 |   | 2,981,281 |   | 2,981,281 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Diluted (loss) income per share:                                                                                                                                                                                          | $ | (0.15 | ) | $ | 0.27 |   | $ | 0.01 |   | $ | (0.43 | ) |
|                                                                                                                                                                                                                      |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Diluted weighted average shares outstanding                                                                                                                                                                               | 2,981,281 |   | 3,118,661 |   | 3,118,661 |   | 2,981,281 |   |
|                                                                                                                                                                                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

| **BERTUCCI'S  CORPORATION (formerly NE Restaurant Company,  Inc.) PRO FORMA CONSOLIDATED STATEMENT OF  OPERATIONS **(Unaudited) (In thousands, except share and per  share data) 26 Weeks Ended June 28, 2000 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                   | As |   |   |   | Sal & Vinnie's |   |   |   |
|                                                                                                                                                                                                                                   | Reported |   | Brinker Sale |   | Abandonment |   | Pro Forma |   |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Net sales                                                                                                                                                                                                                              | $ | 138,380 |   | $ | 67,366 |   | $ | 1,392 |   | $ | 69,622 |   |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Cost of sales and expenses                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                   | Cost of sales | 36,362 |   | 18,781 |   | 490 |   | 17,091 |   |
|                                                                                                                                                                                                                                   | Operating expenses | 79,572 |   | 37,145 |   | 847 |   | 41,580 |   |
|                                                                                                                                                                                                                                   | General and administrative expenses | 8,623 |   | 2,400 |   | - |   | 6,223 |   |
|                                                                                                                                                                                                                                   | Deferred  rent, depreciation and amortization and preopening expenses | 9,089 |   | 3,378 |   | 88 |   | -  5,623 |   |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                                   | Total cost of sales and expenses | 133,646 |   | 61,704 |   | 1,425 |   | 70,517 |   |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                                   | Income (loss) from operations | 4,734 |   | 5,662 |   | (33 | ) | (895 | ) |
|                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Interest expense, net                                                                                                                                                                                                                  | 7,380 |   | 3,103 |   | - |   | 4,277 |   |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
| (Loss) income before income tax provision (benefit)                                                                                                                                                                                    | (2,646 | ) | 2,559 |   | (33 | ) | (5,172 | ) |
|                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Income tax (benefit) provision                                                                                                                                                                                                         | (723 | ) | 998 |   | (13 | ) | (1,708 | ) |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                                   | Net (loss) income before Brinker Sale | (1,923 | ) | 1,561 |   | (20 | ) | (3,465 | ) |
|                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Gain on Brinker Sale, net of income tax                                                                                                                                                                                                | - |   | 22,450 |   | - |   | (22,450 | ) |
|                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                   | Net (loss) income | $ | (1,923 | ) | $ | 24,011 |   | $ | (20 | ) | $ | (25,914 | ) |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
| Basic (loss) income per share:                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                   | (Loss) income per share before Brinker Sale | $ | (0.64 | ) | $ | 0.52 |   | $ | (0.01 | ) | $ | (1.16 | ) |
|                                                                                                                                                                                                                                   | Gain on Brinker Sale, net of income tax | - |   | 7.52 |   | - |   | (7.52 | ) |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                                   | Basic (loss) income per share | $ | (0.64 | ) | $ | 8.04 |   | $ | (0.01 | ) | $ | (8.68 | ) |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                   | Weighted average shares outstanding | 2,983,966 |   | 2,983,966 |   | 2,983,966 |   | 2,983,966 |   |
|                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Diluted income (loss) per share:                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                   | (Loss) income per share before Brinker Sale | $ | (0.64 | ) | $ | 0.50 |   | $ | (0.01 | ) | $ | (1.16 | ) |
|                                                                                                                                                                                                                                   | Gain on Brinker Sale, net of income tax | - |   | 7.20 |   | - |   | (7.20 | ) |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                                   | Diluted (loss) income per share | $ | (0.64 | ) | $ | 7.70 |   | $ | (0.01 | ) | $ | (8.36 | ) |
|                                                                                                                                                                                                                                   |  |   |  |   |  |   |  |   |
|                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                   | Weighted average shares outstanding | 2,983,966 |   | 3,118,661 |   | 3,118,661 |   | 3,118,661 |   |
|                                                                                                                                                                                                                                        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

**Item 2.  Management’s Discussion and Analysis ofResults of Operations and Financial Condition**

             Thefollowing discussion should be read in conjunction with the consolidatedfinancial statements of Bertucci’s Corporation, formerly NE Restaurant Company,Inc., (“The Company”) and the notes thereto included herein.

**General**

             TheCompany is an operator of full-service, casual dining restaurants in thenortheastern United States.  TheCompany’s wholly owned subsidiary, Bertucci’s Restaurant Corp. (“Bertucci’s”)owns and operates a restaurant concept under the name Bertucci’s Brick OvenPizzeria® (“Bertucci’s restaurants”).

             TheCompany was formed in 1991 to acquire 15 Chili's restaurants from a priorfranchisee.  The Company grew throughthe addition of 25 new Chili's and seven On The Border restaurants in NewEngland until April 2001.  The Companydeveloped and operated the Chili’s and On The Border Restaurants (collectively,“Brinker Concept Restaurants”) under franchise agreements with BrinkerInternational, Inc., a publicly-owned company (“Brinker” or the “Franchisor”).

             InJuly 1998, the Company completed its acquisition of Bertucci's’ parent entity,Bertucci’s, Inc., a publicly-owned restaurant company for a purchase price, netof cash received, of approximately $89.4 million (the “Acquisition”).   The Company financed the Acquisition primarilythrough the issuance of $100 million of 10 3/4% senior notes due 2008 (the“Senior Notes”).  The Acquisitionincluded 90 Bertucci’s restaurants and one Sal & Vinnie’s restaurant.  Since 1999, the Company closed theBertucci’s test kitchen restaurant in Wakefield, Massachusetts and closed seventeenunder performing Bertucci’s restaurants. In December of 2000 the Company also closed the one Sal and Vinnie'sSicilian SteakhouseTM (“Sal and Vinnie’s”) located in Massachusetts.

             OnApril 12, 2001, the Company completed the sale of 40 Chili’s and seven On TheBorder restaurants to Brinker (the “Brinker Sale”).  Total consideration, subject to closing adjustments, was $93.5million. Brinker acquired the inventory, facilities, equipment and managementteams associated with these restaurants, as well as the four Chili’srestaurants currently under development by the Company. Further, Brinkerassumed the mortgage debt on the Company’s Chili’s and On The Borderrestaurants.

             Asof July 4, 2001, the Company owned and operated 75 full-service, casual dining,Italian-style restaurants under the name Bertucci's Brick Oven Pizzeria®located primarily in New England and Mid-Atlantic United States.

Results of Operations

             Thefollowing table sets forth the percentage relationship to net sales, unlessotherwise indicated, of certain items included in the Company's statement ofoperations, as well as certain operating data, for the periods indicated:

|                                                   | Thirteen Weeks Ended:                                              |   | Twenty-Six Weeks Ended: |   |    |
|--------------------------------------------------------|--------------------------------------------------------------------|--------|-------------------------|--------|---------|
|                                                   | July 4,                                                            |   | June 28,                |   | July 4, |   | June 28, |   |   |
|                                                   | 2001                                                               |   | 2000                    |   | 2001    |   | 2000 |   |   |
|                                                   |                                                                    |   |                         |   |         |   |  |   |   |
| Net Sales                                              | 100.0                                                              | %      | 100.0                   | %      | 100.0   | % | 100.0 | % |   |
|                                                   |                                                                    |   |                         |   |         |   |  |   |   |
| Cost of sales and expenses                             |                                                               |   |                    |   |    |   |   |   |   |
|                                                   | Cost of sales                                                      | 23.9   | %                       | 26.3   | %       | 25.1 | % | 26.3 | % |   |
|                                                   | Operating expenses                                                 | 61.5   | %                       | 56.9   | %       | 59.3 | % | 57.5 | % |   |
|                                                   | General and administrative expenses                                | 6.9    | %                       | 5.8    | %       | 6.0 | % | 6.2 | % |   |
|                                                   | Closed restaurant expenses                                         | 0.6    | %                       | 0.0    | %       | 0.2 | % | 0.0 | % |   |
|                                                   | Deferred rent, depreciation, amortization and preopening  expenses | 8.2    | %                       | 6.5    | %       | 7.1 | % | 6.6 | % |   |
|                                                   |                                                                    |   |                         |   |         |   |  |   |   |
|                                                   | Total cost of sales and expenses                                   | 101.1  | %                       | 95.5   | %       | 97.7 | % | 96.6 | % |   |
|                                                   |                                                                    |   |                         |   |         |   |  |   |   |
|                                                   |                                                               |   |                    |   |    |   |   |   |   |
|                                                   | (Loss) income from operations                                      | (1.1   | )%                      | 4.5    | %       | 2.3 | % | 3.4 | % |   |
|                                                   |                                                               |   |                    |   |    |   |   |   |   |
| Interest expense, net                                  | 6.0                                                                | %      | 5.2                     | %      | 5.7     | % | 5.3 | % |   |
|                                                   |                                                                    |   |                         |   |         |   |  |   |   |
| Loss before income tax benefit and Brinker Sale        | (7.1                                                               | )%     | (0.7                    | )%     | (3.4    | )% | (1.9 | )% |   |
|                                                   |                                                               |   |                    |   |    |   |   |   |   |
| Income tax benefit                                     | (2.2                                                               | )%     | (0.1                    | )%     | (0.9    | )% | (0.5 | )% |   |
|                                                   |                                                               |   |                    |   |    |   |   |   |   |
| Net loss before Brinker Sale                           | (4.9                                                               | )%     | (0.6                    | )%     | (2.5    | )% | (1.4 | )% |   |
|                                                   |                                                               |   |                    |   |    |   |   |   |   |
| Gain on Brinker Sale, net of tax                       | 54.7                                                               | %      | 0.0                     | %      | 20.3    | % | 0.0 | % |   |
|                                                   |                                                                    |   |                         |   |         |   |  |   |   |
|                                                   | Net income (loss)                                                  | 49.8   | %                       | (0.6   | )%      | 17.8 | % | (1.4 | )% |   |
|                                                   |                                                                    |   |                         |   |         |   |  |   |   |
|                                                   |                                                               |   |                    |   |    |   |   |   |   |
|                                                   |                                                               |   |                    |   |    |   |   |   |   |
| **Restaurant Operating Data (Dollars in  Thousands):** |                                                               |   |                    |   |    |   |   |   |   |
|                                                        |                                                               |
| EBITDA (a)                                             | $                                                                  | 3,156  |                    | $      | 7,797   |   | $ | 10,625 |   | $ | 13,823 |   |
| Bertucci's Comparable restaurant sales                 | 4.8                                                                | %      | 5.2                     | %      | 4.4     | % | 7.7 | % |
| Number of Bertucci's restaurants:                      |                                                               |   |                    |   |    |   |   |   |
|                                                   | Restaurants open at beginning of period                            | 73     |                    | 72     |    | 72 |   | 79 |   |
|                                                   | Restaurants opened                                                 | 2      |                    | -      |    | 3 |   | - |   |
|                                                   | Restaurants closed                                                 | -      |                    | -      |    | - |   | 7 |   |
|                                                   |                                                                    |   |                         |   |         |   |  |   |
|                                                   | Total restaurants open at end of period                            | 75     |                    | 72     |    | 75 |   | 72 |   |
|                                                        |                                                                    |        |                         |        |         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

----

| (a) | ''EBITDA'' is defined as income from  operations before deferred rent, depreciation, amortization, preopening costs  and closed restaurant expenses. EBITDA is not a measure of performance  defined by Generally Accepted Accounting Principles (“GAAP”). EBITDA should  not be considered in isolation or as a substitute for net income or the  statement of cash flows which have been prepared in accordance with GAAP. The  Company believes EBITDA provides useful information regarding the Company's  ability to service its debt and the Company understands that such information  is considered by certain investors to be an additional basis for evaluating a  company's ability to pay interest and repay debt. The EBITDA measures  presented herein may not be comparable to similarly titled measures of other  companies. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Thirteen Weeks Ended July 4, 2001 Compared to Thirteen WeeksEnded June 28, 2000**

             *Net Sales*.  Net sales decreased by $30.3 million, or42.5%, to $41.0 million during the second quarter 2001 from $71.3 millionduring the second quarter 2000.  Thedecrease was entirely due to the Brinker Sale during the first week of thesecond quarter 2001.  Bertucci’s salesincreased $2.5 million to $38.3 million in the second quarter 2001, up from$35.8 million during the second quarter of 2000.  The increase was a result of three new restaurants and anincrease in comparable sales. Bertucci’s comparable sales increased 4.0% in the second quarter, mostlyas a result of menu engineering and price increases as dine-in guest counts werenegative 0.7%.

             *Cost ofSales*.  Cost of salesdecreased by approximately $9.0 million, or 47.9%, to $9.8 million during thesecond quarter 2001 from $18.8 million during the second quarter 2000.  The decrease was due to the Brinker Sale.  Expressed as a percentage of net sales,overall cost of sales decreased to 23.9% during the second quarter 2001 from26.3% during the second quarter 2000.  The decrease was primarily due to the Brinker Sale and favorable costmovement at Bertucci’s.  Bertucci’s costof sales decreased from 24.6% in the second quarter 2000 to 23.4% in 2001mostly from improvements in efficiency combined with price increases.

             *OperatingExpenses.*  Operating expensesdecreased by $15.4 million, or 37.9%, to $25.2 million during the secondquarter 2001 from $40.6 million during the second quarter 2000.  Expressed as a percentage of net sales,operating expenses increased to 61.5% in the second quarter 2001 from 56.9%during the second quarter 2000.  Operatingexpenses at Bertucci’s increased $1.9 million to $22.8 million (59.4% of sales)in 2001 from $20.9 million (58.5% of sales) in the second quarter 2000.  The increase, in both dollars and percent,was a result of new restaurants, increased management labor costs and higherutility costs.

             *General andAdministrative Expenses.* General and administrative expensesdecreased by approximately $1.3 million, or 31.5%, to $2.8 million during thesecond quarter 2001 from $4.1 million during the second quarter 2000.  The decrease was primarily due to reducedstaffing as a result of the Brinker Sale combined with reduced managementrecruiting and training costs.

*             ClosedRestaurant Expenses.*  Due to sub-tenant default on severalsub-leases on closed Bertucci’s restaurants, the Company incurred a non-cashcharge of $250,000 in the second quarter 2001. The Company used approximately$300,000 of cash from operations for closed Bertucci’s restaurants in thesecond quarter.

*             DeferredRent,**Depreciation, Amortization andPreopening Expenses*. Deferred rent, depreciation, amortization and preopening expensesdecreased by approximately $1.2 million or 20.3%, to $3.3 million during thesecond quarter 2001 from $4.5 million during the second quarter 2000.  The decrease was primarily due to theBrinker Sale offset by increased preopening expenses.  Preopening costs totaled $354,000 during the quarter compared to$238,000 in the same period last year.

*             InterestExpense.*  Interest expense decreased by approximately$1.2 million to $2.5 million during the second quarter 2001 from $3.7 millionduring the second quarter 2000.  Thedecrease was due to the elimination of $824,000 of mortgage interest combinedwith $358,000 of interest income from cash investments following the BrinkerSale.

             *IncomeTaxes.*  The effective incometax benefit rate increased to 30.6% during the second quarter 2001 from 3.7%during the second quarter 2000.  Thedifference in rate was mainly due to the impact of non-deductible expenses,primarily Goodwill amortization, and certain tax credits on quarterly resultsduring 2000 offset by the tax liability on the Brinker Sale.

**Twenty-Six Weeks Ended July 4, 2001 Compared to Twenty-SixWeeks Ended June 28, 2000**

             *Net Sales*.  Net sales decreased by $27.6 million, or19.9%, to $110.8 million during the first half 2001 from $138.4 million duringthe same period 2000.  The decrease wasentirely due to the Brinker Sale. Bertucci’s sales increased $4.7 million to $74.3 million in the firsthalf 2001, up from $69.6 million during the first half of 2000.  The increase was a result of three newrestaurants and a 4.4% increase in comparable sales.  The comparable sales increase was mostly a result of menuengineering and price increases as dine-in guest counts were negative 1.1%during the first half of 2001.

             *Cost ofSales*.  Cost of salesdecreased by approximately $8.5 million, or 23.4%, to $27.9 million during thefirst half 2001 from $36.4 million during the first half 2000.  The decrease was due to the BrinkerSale.  Expressed as a percentage of netsales, overall cost of sales decreased to 25.1% during the first half 2001 from26.3% last year.  The decrease wasprimarily due to the Brinker Sale and lower costs at Bertucci’s.  Bertucci’s cost of sales decreased from24.5% in the first half 2000 to 23.6% in 2001 mostly from improvements inefficiency combined with price increases.

             *OperatingExpenses.*  Operating expensesdecreased by $13.9 million, or 17.4%, to $65.7 million during the first half2001 from $79.6 million during the first half 2000.  Expressed as a percentage of net sales, operating expensesincreased to 59.3% in the first half 2001 from 57.5% during the first half2000.  Operating expenses at Bertucci’sincreased $2.5 million to $44.0 million (59.3% of sales) in 2001 from $41.6million (59.7% of sales) in the first half 2000.  The dollar increase was a result of new restaurants and higherutility costs while the percent decrease was from favorable labor margins andleverage on fixed costs partially offset by unfavorable utility costpercentages.

             *General andAdministrative Expenses.* General and administrative expensesdecreased by approximately $2.0 million, or 23.0%, to $6.6 million (6.0% ofsales) during the first half 2001 from $8.6 million (6.2% of sales) during thefirst half 2000.  The decrease wasprimarily due to reduced staffing from of the Brinker Sale combined withreduced management recruiting and training costs.

*             ClosedRestaurant Expenses.*  Due to sub-tenant default on severalsub-leases on closed Bertucci’s restaurants, the Company incurred a non-cashcharge of $250,000 in the first half 2001. The Company used approximately$545,000 of cash from operations for closed Bertucci’s restaurants in the firsthalf.  The Company may record additionalnon-cash charges in the third and fourth quarters of 2001 and believes that theyear-end reserved balance will be sufficient to avoid charges in future years.

*             DeferredRent,**Depreciation, Amortization andPreopening Expenses*. Deferred rent, depreciation, amortization and preopening expensesdecreased by approximately $1.2 million or 10.8%, to $7.9 million during thefirst half 2001 from $9.1 million during the first half 2000.  The decrease was primarily due to theBrinker Sale.  Preopening costs were$600,000 during the first six months of 2001, flat to last year.

*             InterestExpense.*  Interest expense decreased by approximately$1.1 million to $6.3 million during the first half 2001 from $7.4 millionduring the first half 2000.  Thedecrease was due a favorable change of $741,000 of mortgage interest combinedwith $362,000 of interest income from cash investments following the BrinkerSale.

*             IncomeTaxes.*  The effective income tax benefit rateincreased to 27.7% during the first half 2001 from 27.3% during the first half2000.  The difference in rate was mainlydue to the impact of the tax liability on the Brinker Sale.

**Liquidity and Capital Resources**

             Netcash flows used by operating activities were $2.1 million for the first half2001 or $4.7 million more than the $2.6 million generated during the first half2000.   A primary reason for the changewas an increase in working capital needs, payments of accrued severance andbonuses and the reduction of accrued expenses and accounts payable related tothe Brinker Concept Restaurants.  As ofJuly 4, 2001, the cash and cash equivalents of $44.2 million consisted of $42.0million of short-term investments and the remainder in operating cash accounts.

             TheCompany’s capital expenditures were $8.8 million for the first half 2001compared to $6.3 million for the first half 2000.  The capital expenditures for 2001 were primarily due to $2.8million for the Brinker Concept Restaurants, $4.8 million for development offour new Bertucci’s Restaurants and $1.2 million for Bertucci’s maintenancecapital.

             TheBrinker Sale was consummated on April 12, 2001 and was valued at $93.5million.  This amount was adjusted byclosing costs of $1.3 million, transferred mortgage loans of $40.8 million, areduction of debt of $0.3 million and Brinker Concept Restaurants working capitalneeds of $3.5 million to arrive at net cash generated of approximately $47.6million.  From the gain, the Companyincurred a tax liability of approximately $9.8 million due September 15, 2001.

             TheSenior Bank Facility provided the Company with available borrowing up to anaggregate amount of $20.0 million. Concurrent with the completion of the Brinker Sale, the Company repaidthe $300,000 balance outstanding at which time the availability of the SeniorBank Facility was restricted.  On July21, 2001, the Senior Bank Facility expired and was not replaced; the Company iscurrently operating without a line of credit and is funding all of its growth,debt reductions and operating needs out of cash on hand.  Operating without a short-term creditfacility may hamper the Company’s ability to remain current with itsobligations.

             TheIndenture governing the Senior Notes defines the net proceeds from an assetsale (the Brinker Sale) and the types of uses of proceeds, namely, repurchaseof debt or investments in assets.  TheIndenture requires use of the proceeds within one year of the asset sale (April12, 2002 for the Brinker Sale).  TheCompany believes it will meet the terms of the indenture for use of BrinkerSale proceeds.  Furthermore, the Companybelieves that the cash flow generated from its operations with the current cashon hand should be sufficient to fund its debt service requirements, leaseobligations, current expected capital expenditures and other operating expensesuntil April 2002.  Beyond April 2002,the Company expects to be able to service its debt but the lack of short termborrowing availability may impede growth.

             Asof July 4, 2001, the Company had $100.0 million in consolidated indebtedness,all pursuant to the Senior Notes.  TheCompany unsuccessfully tendered for a portion of the Senior Notes during Mayand June 2001.  This tender expired withno Senior Notes tendered on June 26, 2001. During July 2001, the Company successfully purchased $14.7 million ofSenior Notes for $11.5 million in cash and accrued a $1.3 million tax liabilityon the $3.2 million gain.  The Companycontinues to pursue purchasing Senior Notes as well as investing in assets.

             DuringJuly 2001, the Company established a $2.0 million (maximum) Letter of CreditFacility.  As of August 17, 2001, thisfacility is collateralized with $1.0 million of cash restricted from generaluse.

             TheCompany’s future operating performance and ability to service or refinance theSenior Notes will be subject to future economic conditions and to financial,business and other factors, many of which are beyond the Company’scontrol.  Significant liquidity demandswill arise from debt service on the Senior Notes.

**Seasonality**

             TheCompany’s quarterly results of operations have fluctuated and are expected tocontinue to fluctuate depending on a variety of factors, including the timingof new restaurant openings and related pre-opening and other startup expenses,net sales contributed by new restaurants, increases or decreases in comparablerestaurant sales, competition and overall economic conditions.  The Company’s business is also subject toseasonal influences of consumer spending, dining out patterns and weather.  As is the case with many restaurant companies,the Company typically experiences lower net sales and net income during thefirst and fourth quarters.  Because ofthese fluctuations in net sales and net loss, the results of operations of anyquarter are not necessarily indicative of the results that may be achieved fora full year or any future quarter.

**Forward-Looking Statements**

             All statements other thanstatements of historical facts included in this Quarterly Report on Form 10-Q,including, without limitation, statements set forth under "Management’sDiscussion and Analysis of Financial Condition and Results of Operations" regardingthe Company’s future financial position, business strategy, budgets, projectedcosts and plans and objectives of management for future operations, areforward-looking statements.  Inaddition, forward-looking statements generally can be identified by the use offorward-looking terminology such as "may,"  "will," "expect," "intend,""estimate," "anticipate" or "believe" or thenegative thereof or variations thereon or similar terminology.  Although the Company believes that theexpectations reflected in such forward-looking statements will prove to havebeen correct, it can give no assurance that such expectations will prove tohave been correct. Factors including those set forth herein, as well as thoseset forth in the Company’s Form 10K filed with the Securities and ExchangeCommission (“SEC”) on March 30, 2001 and other filings with the SEC may affectsuch expectations.  Investors arecautioned not to place undue reliance on these forward-looking statements,which speak only as of the date hereof. The Company undertakes no obligation to publicly release any revisionsto these forward-looking statements to reflect events or circumstances afterthe date hereof or to reflect the occurrence of unanticipated events.

Item3.  QUANTITATIVE AND QUALITATIVEDISCLOSURE ABOUT MARKET RISKS

             TheCompany has market risk associated with interest rate risk.  The Company manages its exposure through itsregular financing activities.  Interestrate changes would result in a change in the fair value of the Company’s debtfacilities due to the difference between the market interest rate and the rateat the date of issuance of the debt facilities.  Furthermore, the Company has no exposure to specific risksrelated to derivatives or other “hedging” types of financial instruments.

PARTII:    OTHER INFORMATION

Item1.  LEGAL PROCEEDINGS             TheCompany is involved in various legal proceedings from time to time incidentalto the conduct of its business. In the opinion of management, any ultimateliability arising out of such proceedings will not have a material adverseeffect on the financial condition or results of operations of the Company.

             Managementis not aware of any litigation to which the Company is a party that is likelyto have a material adverse effect on the Company.

Item2.  CHANGES IN SECURITIES AND USE OFPROCEEDS             None

Item 3.  DEFAULTS UPON SENIOR SECURITIES             None

Item4.  SUBMISSION OF MATTERS TO A VOTE OFSECURITY HOLDERS             None

Item5.  OTHER INFORMATION             None

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)         Reports on Form 8-K

| (i)    | The  Company filed a Current Report on Form 8-K on April 27, 2001 announcing the  completion of the Brinker Sale.  A Pro  Forma Consolidated Balance Sheet and Pro Forma Consolidated Statement of  Operations as of January 3, 2001 and for the 53 weeks then ended were  included in the filing.  The pro forma  financial statements assumed the completion of the Brinker Sale occurred on  December 30, 1999. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (ii)   | The  Company filed a Current Report on Form 8-K on May 25, 2001 announcing a  tender offer and consent solicitation for up to $43 Million of its  outstanding $100 Million 103⁄4% Senior Notes due 2008.                                                                                                                                                                                                                  |

SIGNATURES

 

             Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

 

|   |             | BERTUCCI’S CORPORATION |
|--------|------------------|-----------------------------|
|   |             |                        |  |   |
|   |             | (Registrant)                |
|   |             |                        |   |   |
|   |             |                        |   |   |
| Date:  | August  17, 2001 | By:                         | /s/  Benjamin R. Jacobson |
|   |             |                             |
|   |             |                        | Chairman  of the Board of Directors, |
|   |             |                        | President  and Chief Executive Officer, |
|   |             |                        | Treasurer  (Principal Executive Officer) |
|   |             |                        |   |   |
|   |             |                        |   |   |
|   |             |                        |   |   |
| Date:  | August  17, 2001 | By:                         | /s/  Kurt J. Schnaubelt |
|   |             |                             |
|   |             |                        | Vice President (Principal Financial |
|   |             |                        | Officer and Principal Accounting  Officer) |
|        |                  |                             |  |  |  |  |  |