##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the quarterly period ended March 29, 2009
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to.
 Commission file number 333-116310
 REAL MEX RESTAURANTS, INC.
  Delaware
    
    13-4012902(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 5660 Katella Avenue, Suite 100
Cypress, CA 90630
 (562)-346-1200
 þ o
 o o
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-Accelerated Filer þ
    
    Smaller Reporting Company o
 o No þ




---



##### 



Real Mex Restaurants, Inc.
 Index
 PART I FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)
    
    
    4Consolidated Balance Sheets
    
    
    4Consolidated Statements of Operations
    
    
    5Consolidated Statements of Cash Flows
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    20Item 4. Controls and Procedures
    
    
    20PART II OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    21Item 1A. Risk Factors
    
    
    21Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    21Item 3. Defaults Upon Senior Securities
    
    
    21Item 4. Submission of Matters to a Vote of Security Holders
    
    
    21Item 5. Other Information
    
    
    21Item 6. Exhibits
    
    
    22SIGNATURE
    
    
    23Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




---



##### Table of Contents



FORWARD-LOOKING STATEMENTS
 This report includes forward looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the Exchange Act).
Forward looking statements are those that do not relate solely to historical fact. They include,
but are not limited to, any statement that may predict, forecast, indicate or imply future results,
performance, achievements or events. They may contain words such as believe, anticipate,
expect, estimate, intend, project, plan, will, should, may, or could or words or
phrases of similar meaning. They may relate to, among other things: our liquidity and capital
resources; legal proceedings and regulatory matters involving our Company; food-borne illness
incidents; increases in the cost of ingredients; our dependence upon frequent deliveries of food
and other supplies; our vulnerability to changes in consumer preferences and economic conditions;
our ability to compete successfully with other casual dining restaurants; our ability to expand;
and anticipated growth in the restaurant industry and our markets.
 These forward looking statements reflect our current views with respect to future events and
are based on assumptions and subject to risks and uncertainties, including, but not limited to,
economic, competitive, governmental and technological factors outside of our control, that
may cause actual results to differ materially from trends, plans or expectations set forth in the
forward looking statements. These risks and uncertainties may include these factors and the risks
and uncertainties described elsewhere in this report and other filings with the Securities and
Exchange Commission, including the Item 1A. Risk Factors section of our annual report on Form
10-K for the year ended December 28, 2008. Given these risks and uncertainties, we urge you to read
this report completely and with the understanding that actual future results may be materially
different from what we plan or expect. All of the forward-looking statements made in this Form 10-Q
are qualified by these cautionary statements and we cannot assure you that the actual results or
developments anticipated by our Company will be realized or, even if substantially realized, that
they will have the expected consequences to or effects on our Company or our business or
operations. In addition, these forward-looking statements present our estimates and assumptions
only as of the date of this report. Except for our ongoing obligation to disclose material
information as required by federal securities laws, we do not intend to update you concerning any
future revisions to any forward looking statements to reflect events or circumstances occurring
after the date of this report.
 Unless otherwise provided in this report, references to we, us, our and Company refer
to Real Mex Restaurants, Inc. and its consolidated subsidiaries.
  3




---



##### Table of Contents



PART I
FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Real Mex Restaurants, Inc.
 
 Consolidated Balance Sheets (unaudited)
(in thousands, except for share data)
 March 29,
    
    
    December 28,2009
    
    
    2008AssetsCurrent assets:Cash and cash equivalents
    
    $
    2,235
    
    
    $
    2,099Trade receivables, net
    
    
    10,343
    
    
    
    9,102Other receivables
    
    
    226
    
    
    
    873Inventories
    
    
    12,273
    
    
    
    13,563Deferred compensation plan assets
    
    
    171
    
    
    
    1,848Prepaid expenses and other current assets
    
    
    6,438
    
    
    
    7,253Current portion of favorable lease asset, net
    
    
    5,863
    
    
    
    5,902Total current assets
    
    
    37,549
    
    
    
    40,640Property and equipment, net
    
    
    104,158
    
    
    
    110,505Goodwill, net
    
    
    43,398
    
    
    
    43,200Trademarks and other intangibles
    
    
    68,900
    
    
    
    68,900Deferred charges
    
    
    1,104
    
    
    
    1,404Favorable lease asset, less current portion, net
    
    
    23,945
    
    
    
    25,382Other assets
    
    
    8,280
    
    
    
    8,297Total assets
    
    $
    287,334
    
    
    $
    298,328Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    25,680
    
    
    $
    23,198Accrued self-insurance reserves
    
    
    15,512
    
    
    
    15,619Accrued compensation and benefits
    
    
    11,282
    
    
    
    16,216Other accrued liabilities
    
    
    19,124
    
    
    
    15,426Current portion of long-term debt
    
    
    745
    
    
    
    8,313Current portion of capital lease obligations
    
    
    426
    
    
    
    453Total current liabilities
    
    
    72,769
    
    
    
    79,225Long-term debt, less current portion
    
    
    155,768
    
    
    
    152,105Capital lease obligations, less current portion
    
    
    843
    
    
    
    942Deferred tax liabilities
    
    
    31,549
    
    
    
    31,549Unfavorable lease liability, less current portion, net
    
    
    7,905
    
    
    
    8,445Other liabilities
    
    
    4,147
    
    
    
    3,018Total liabilities
    
    
    272,981
    
    
    
    275,284Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity:Common stock, $.001 par value, 1,000 shares
authorized, issued and outstanding at March 29,
2009 and December 28, 2008
    
    
    
    
    
    
    Additional paid-in capital
    
    
    27,403
    
    
    
    27,147Accumulated deficit
    
    
    (13,050
    )
    
    
    (4,103
    )Total stockholders equity
    
    
    14,353
    
    
    
    23,044Total liabilities and stockholders equity
    
    $
    287,334
    
    
    $
    298,328
   4




---



##### Table of Contents



Real Mex Restaurants, Inc.
 
 Consolidated Statements of Operations (unaudited)
(in thousands)
 Three Months EndedSuccessor
    
    
    PredecessorMarch 29,
    
    
    March 30,2009
    
    
    2008Revenues:Restaurant revenues
    
    $
    117,413
    
    
    $
    127,487Other revenues
    
    
    10,406
    
    
    
    9,337Franchise revenues
    
    
    673
    
    
    
    753Total revenues
    
    
    128,492
    
    
    
    137,577Costs and expenses:Cost of sales
    
    
    31,110
    
    
    
    34,060Labor
    
    
    47,616
    
    
    
    50,473Direct operating and occupancy expense
    
    
    34,699
    
    
    
    36,542General and administrative expense
    
    
    6,722
    
    
    
    7,843Depreciation and amortization
    
    
    8,137
    
    
    
    6,078Pre-opening costs
    
    
    
    
    
    
    338Operating income
    
    
    208
    
    
    
    2,243Other income (expense):Interest expense
    
    
    (9,220
    )
    
    
    (4,617
    )Other income (expense), net
    
    
    71
    
    
    
    189Total other expense, net
    
    
    (9,149
    )
    
    
    (4,428
    )Loss before income tax provision
    
    
    (8,941
    )
    
    
    (2185
    )Income tax provision
    
    
    6
    
    
    
    17Net loss
    
    $
    (8,947
    )
    
    $
    (2,202
    )
   5




---



##### Table of Contents



Real Mex Restaurants, Inc.
 
 Consolidated Statements of Cash Flows (unaudited)
(in thousands)
 Three Months EndedSuccessor
    
    
    PredecessorMarch 29,
    
    
    March 30,2009
    
    
    2008Operating activitiesNet loss
    
    $
    (8,947
    )
    
    $
    (2,202
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    7,234
    
    
    
    5,511Amortization of:Favorable lease asset and unfavorable lease liability, net
    
    
    903
    
    
    
    567Debt discount/(premium)
    
    
    3,683
    
    
    
    (293
    )Deferred financing costs
    
    
    300
    
    
    
    315Loss on disposal of property and equipment
    
    
    8
    
    
    
    74Stock-based compensation expense
    
    
    66
    
    
    
    97Non-cash consulting expense
    
    
    190
    
    
    
    Changes in operating assets and liabilities:Trade and other receivables
    
    
    (594
    )
    
    
    (1,502
    )Inventories
    
    
    1,290
    
    
    
    121Deferred compensation plan assets
    
    
    1,677
    
    
    
    640Prepaid expenses and other current assets
    
    
    815
    
    
    
    1,485Related party receivable
    
    
    
    
    
    
    2,211Deferred charges, net
    
    
    
    
    
    
    11Other assets
    
    
    17
    
    
    
    (107
    )Accounts payable and accrued liabilities
    
    
    1,753
    
    
    
    6,008Other liabilities
    
    
    1,128
    
    
    
    4,165Net cash provided by operating activities
    
    
    9,523
    
    
    
    17,101Investing activitiesAdditions to property and equipment
    
    
    (1,540
    )
    
    
    (6,057
    )Exchange transaction costs
    
    
    (198
    )
    
    
    Net proceeds from disposal of property
    
    
    65
    
    
    
    Net cash used in investing activities
    
    
    (1,673
    )
    
    
    (6,057
    )Financing activitiesNet repayment under revolving credit facility
    
    
    (7,200
    )
    
    
    (11,000
    )Payments on long-term debt agreements and capital lease obligations
    
    
    (514
    )
    
    
    (89
    )Net cash used in financing activities
    
    
    (7,714
    )
    
    
    (11,089
    )Net increase (decrease) in cash and cash equivalents
    
    
    136
    
    
    
    (45
    )Cash and cash equivalents at beginning of period
    
    
    2,099
    
    
    
    2,323Cash and cash equivalents at end of period
    
    $
    2,235
    
    
    $
    2,278Supplemental disclosure of cash flow informationInterest paid
    
    $
    1,250
    
    
    $
    2,007Income taxes paid
    
    $
    6
    
    
    $
    17
   6




---



##### Table of Contents



Real Mex Restaurants, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements (unaudited)
March 29, 2009
(in thousands, except for share data)
 1. Basis of Presentation
 ® ® ®
     2. Exchange Agreement
    7




---



##### Table of Contents



Cash and cash equivalents
    
    $
    1,417Trade and other accounts receivable
    
    
    12,100Inventories
    
    
    12,938Other current assets
    
    
    5,692Property and equipment
    
    
    113,154Other assets
    
    
    41,841Trademark and other intangibles
    
    
    68,900Goodwill
    
    
    43,178Total assets acquired
    
    
    299,220Accounts payable and accrued liabilities
    
    
    60,616Long-term debt
    
    
    166,026Deferred tax liability
    
    
    31,549Other liabilities
    
    
    13,854Total liabilities assumed
    
    
    272,045Net assets acquired
    
    $
    27,175
  3. Intangible Assets
  March 29,
    
    
    December 28,2009
    
    
    2008Trademarks
    
    $
    55,900
    
    
    $
    55,900Franchise agreements
    
    
    13,000
    
    
    
    13,000$
    68,900
    
    
    $
    68,900
 4. Long-Term Debt
  March 29,
    
    
    December 28,2009
    
    
    2008Senior Secured Notes due 2010
    
    $
    105,000
    
    
    $
    105,000Senior Secured Notes unamortized debt discount
    
    
    (14,732
    )
    
    
    (18,415
    )Senior Secured Revolving Credit Facility
    
    
    400
    
    
    
    7,600Senior Unsecured Credit Facility
    
    
    65,000
    
    
    
    65,000Mortgage
    
    
    574
    
    
    
    591Other
    
    
    271
    
    
    
    642156,513
    
    
    
    160,418Less current portion
    
    
    (745
    )
    
    
    (8,313
    )$
    155,768
    
    
    $
    152,105
  8




---



##### Table of Contents



Senior Secured Notes due 2010
   Senior Secured Revolving Credit Facilities
     9




---



##### Table of Contents



Senior Unsecured Credit Facility
     10




---



##### Table of Contents



Mortgage.
  March 29,
    
    
    December 28,2009
    
    
    2008Senior Secured Notes due 2010
    
    
    10.25
    %
    
    
    10.25
    %Senior Secured Revolving Credit Facilities
    
    
    6.12 to 7.68
    %
    
    
    7.11 to 7.94
    %Senior Unsecured Credit Facility
    
    
    12.50
    %
    
    
    12.50
    %Mortgage
    
    
    9.28
    %
    
    
    9.28
    %Other
    
    
    4.70
    %
    
    
    3.98 to 4.70
    %
 5. Capitalization
 Common Stock
  Stock Option Plans
     Weighted
average grant date fair value
    
    $
    4Risk-free interest rate
    
    
    4.52
    %Expected volatility
    
    
    42.28
    %Expected life in years
    
    
    7.42
  11




---



##### Table of Contents



WeightedAverageShares
    
    
    Exercise PriceOutstanding at December 28, 2008
    
    
    330
    
    
    $
    8,150Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited/expired
    
    
    
    
    
    
    8,150Outstanding at March 29, 2009
    
    
    330
    
    
    $
    8,150Vested and expected to vest at March 29, 2009
    
    
    316
    
    
    $
    8,150Exercisable at March 29, 2009
    
    
    129
    
    
    $
    8,150
  6. Related Party Transactions
 Succcessor Transactions
     Predecessor Transactions
   12




---



##### Table of Contents



7. Impact of Recently Issued Accounting Principles
       13




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis of our financial condition and results of operations
contains forward looking statements within the meaning of the federal securities laws. See the
discussion under the heading Forward-Looking Statements elsewhere in this report.
 Overview
             14




---



##### Table of Contents



Critical Accounting Policies
   Results of Operations
   13 Weeks EndedSuccessor
    
    
    PredecessorMarch 29, 
2009
    
    
    March 30, 
2008Total revenues
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    24.2
    
    
    
    24.8Labor
    
    
    37.1
    
    
    
    36.7Direct operating and occupancy expense
    
    
    27.0
    
    
    
    26.6Total operating costs
    
    
    88.3
    
    
    
    88.0General and administrative expense
    
    
    5.2
    
    
    
    5.7Depreciation and amortization
    
    
    6.3
    
    
    
    4.4Pre-opening costs
    
    
    
    
    
    
    0.2Operating income
    
    
    0.2
    
    
    
    1.6Interest expense
    
    
    7.2
    
    
    
    3.4(Loss) income before tax provision
    
    
    (7.0
    )
    
    
    (1.6
    )Net (loss) income
    
    
    (7.0
    )
    
    
    (1.6
    )
 Thirteen weeks ended March 29, 2009 compared to the thirteen weeks ended March 30, 2008
 Total Revenues
 Cost of Sales
 Labor
  15




---



##### Table of Contents



Direct Operating and Occupancy Expense
 General and Administrative Expense
 Depreciation and amortization
 Interest Expense
 Income tax provision.
 Liquidity and Capital Resources
  Working Capital and Cash Flows
   16




---



##### Table of Contents



Operating Activities
 Investing Activities
  Financing Activities
 Debt and Other Obligations
 Senior Secured Notes due 2010
   17




---



##### Table of Contents



Senior Secured Revolving Credit Facilities
         18




---



##### Table of Contents



Senior Unsecured Credit Facility
   Mortgage.
  March 29,
    
    
    December 28,2009
    
    
    2008Senior Secured Notes due 2010
    
    
    10.25
    %
    
    
    10.25
    %Senior Secured Revolving Credit Facilities
    
    
    6.12 to 7.68
    %
    
    
    7.11 to 7.94
    %Senior Unsecured Credit Facility
    
    
    12.50
    %
    
    
    12.50
    %Mortgage
    
    
    9.28
    %
    
    
    9.28
    %Other
    
    
    4.70
    %
    
    
    3.98 to 4.70
    %
 Capital Leases
 Inflation
   19




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
     
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
  Changes In Internal Controls Over Financial Reporting
   20




---



##### Table of Contents



PART II
OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity 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
   21




---



##### Table of Contents



Item 6. Exhibits
 Exhibit No.


    Description31.1
    *

    Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of
the Securities Exchange Act of 1934 of the Chief Executive
Officer.31.2
    *

    Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of
the Securities Exchange Act of 1934 of the Chief Financial
Officer.32.1
    *

    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
the Chief Executive Officer.32.2
    *

    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
the Chief Financial Officer.
 *
    
    Filed herewith.  22




---



##### Table of Contents



SIGNATURE
  REAL MEX RESTAURANTS, INC.Dated: May 12, 2009
    By:
    /s/ Richard E. RiveraRichard E. RiveraPresident & Chief Executive
Officer and Chairman
(Principal Executive Officer)Dated: May 12, 2009
    By:
    /s/ Steven TannerSteven TannerChief Financial Officer
(Principal Financial Officer
and Accounting Officer)  23




---



##### Table of Contents



EXHIBIT INDEX
 Exhibit No.

    Description31.1
    *

    Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of
the Securities Exchange Act of 1934 of the Chief Executive
Officer.31.2
    *

    Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of
the Securities Exchange Act of 1934 of the Chief Financial
Officer.32.1
    *

    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
the Chief Executive Officer.32.2
    *

    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
the Chief Financial Officer.
 *
    
    Filed herewith.  24