WICHITA, Kan., July 12, 2001 (PRIMEZONE) -- Lone Star Steakhouse & Saloon, Inc. (Nasdaq:STAR) announced operating results for the twelve-week period ended June 12, 2001. Adjusted net income (Net income before unusual items and non-cash compensation accruals) was $3,615,000 or $.15 per share ($.14 diluted) compared to $5,858,000 or $.22 per share ($.22 diluted) last year. Year to date adjusted net income was $10,998,000 or $.46 per share ($.44 diluted) compared to $12,961,000 or $.47 per share ($.47 diluted) in 2000. Due to increases in the Company's common stock price during the quarter, the non-cash stock compensation charge associated with certain options repriced in prior years was $9,094,000, after tax, resulting in a net loss for the quarter of $5,320,000 or $.22 per share. Second quarter revenue grew 1.4% to $136,069,000 and year to date revenue increased 2.3% to $279,821,000.
Sullivan's Steakhouse restaurants continued to show strong comparable sales growth for the quarter of 16.8%, bringing year to date growth to 16.5%. Lone Star Steakhouse & Saloon restaurants same store sales declined 1.1% during the quarter, bringing year to date, same store sales growth to 0.1%. Del Frisco's Double Eagle Steak House restaurants were affected by the well-publicized softening economic environment, posting a decline of 4.5% in comparable store sales for the quarter, bringing the year to date decline to 0.6%.
The Company's financial position remains strong, with cash of $49 million, no debt, and adjusted EBITDA for the quarter of $13.6 million or $.57 per share. Book value per share increased to $18.54 at the end of the quarter. The Board of Directors declared the Company's quarterly cash dividend of $.125 per share payable July 27, 2001 to shareholders of record on July 13, 2001.
Lone Star domestic margins were in line with sales volumes with the exception of advertising, natural gas, and labor, all of which were substantially higher than last year.
The Company opened 2 Lone Star Steakhouse & Saloon restaurants in Little Rock, Arkansas and Port Orange, Florida in the second quarter.
Australian Lone Star's comparable store sales declined 9.0%. Sales and operating margins in Australia are still suffering from the effects of the National General Sales Tax implemented by the Australian government in July 2000, which has had a negative impact on consumer spending.
During the second quarter, the Company purchased 93,000 shares of its common stock. The total number of shares repurchased by the Company since the announcement of its stock buy back program is 17.3 million at an average price of $9.62 per share.
Future reported earnings will continue to be impacted by FASB Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation, an interpretation of APB No. 25" which requires a quarterly non-cash charge for the "in-the-money" component of stock options that have been modified. In subsequent quarters, the charge or credit to non-cash compensation expense will be for the change, either up or down from the previous reported quarter. This non-cash charge could introduce extreme volatility in reported earnings. For greater clarity and comparability, the Company will continue to report adjusted net income without unusual items in the charge or credit for non-cash stock compensation.
Lone Star owns and operates 246 domestic and 26 international Lone Star Steakhouse & Saloon restaurants; 15 Sullivan's Steakhouse restaurants; and five Del Frisco's Double Eagle Steak House restaurants.
For interested parties, there will be a conference call with management at 10:00 AM Central Time on Tuesday, July 17, 2001 to discuss this second quarter earnings release. The call in number is (719)-457-5206 and the confirmation code is 436031. A recorded replay of the conference call will be available from 12:00 PM on July 17, 2001 thru midnight July 30, 2001. The replay call in number is (719)-457-0820 and the confirmation code is 436031. A listen only connection to the conference call, as well as the replay, will be available on the Internet through the Company's website, www.lonestarsteakhouse.com.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the Company believes the assumptions underlying the forward-looking statements contained herein, including the development plans of the Company, are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements contained in the press release will prove to be accurate.
Lone Star Steakhouse & Saloon, Inc.
Unaudited Summary Financial Data for the Second Quarter 2001
(In thousands except for per share amounts)
June 12, Dec. 26,
2001 2000
------- -------
Current Assets:
Cash and cash equivalents $ 49,189 $ 29,029
Other current assets 18,117 18,119
------- -------
67,306 47,148
Property and equipment, net 392,444 406,761
Intangibles and other assets 40,490 35,014
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$500,240 $488,923
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Current liabilities $ 51,533 $ 48,864
Noncurrent liabilities 3,430 2,276
Stockholders' equity 445,277 437,783
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$500,240 $ 488,923
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For the second quarter ended
----------------------------
June 12, 2001 June 13, 2000
12 Weeks 12 Weeks
$ % $ %
------- ---- ------- ----
Net Sales $136,069 $134,187
Costs and expenses:
Costs of sales 47,621 35.0 47,228 35.2
Restaurant operating
expenses 66,327 48.7 62,662 46.7
Depreciation and
amortization 6,428 4.7 6,610 4.9
------- ---- ------- ----
Restaurant costs and
expenses 120,376 88.4 116,500 86.8
------- ---- ------- ----
Restaurant operating income 15,693 11.6 17,687 13.2
General and administrative
expenses 9,885 7.3 9,014 6.7
Non-cash stock compensation
expense 14,435 10.6
------- ---- ------- ----
Earnings (loss) from
operations (8,627) (6.3) 8,673 6.5
Other income 628 0.4 393 0.3
------- ---- ------- ----
Earnings (loss) before
income taxes (7,999) (5.9) 9,066 6.8
Provision (benefit) for
income taxes (2,679) (2.0) 3,208 2.4
------- ---- ------- ----
Net earnings (loss) $ (5,320) (3.9) $ 5,858 4.4
======= ==== ======= ====
Basic earnings (loss)
per share $(0.22) $ 0.22
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Diluted earnings (loss)
per share $(0.22) $ 0.22
===== =====
Average shares outstanding
- Basic 24,032 26,232
Average shares outstanding
- Diluted 25,296 27,148
Restaurants included at
end of period 292 300
Comparable sales growth 0.1% 0.9%
For the two quarters ended
--------------------------
June 12, 2001 June 13, 2000
24 Weeks 24 Weeks
$ % $ %
------- ---- ------- ----
Net Sales $279,821 $273,442
Costs and expenses:
Costs of sales 97,324 34.8 94,885 34.7
Restaurant operating
expenses 134,232 48.0 125,772 46.0
Depreciation and
amortization 12,882 4.6 13,160 4.8
------- ---- ------- ----
Restaurant costs and
expenses 244,438 87.4 233,817 85.5
------- ---- ------- ----
Restaurant operating income 35,383 12.6 39,625 14.5
General and administrative
expenses 19,042 6.8 20,355 7.5
Non-cash stock compensation
expense 14,435 5.1
------- ---- ------- ----
Earnings (loss) from
operations 1,906 0.7 19,270 7.0
Other income 2,327 0.8 809 0.3
------- ---- ------- ----
Earnings (loss) before
income taxes 4,233 1.5 20,079 7.3
Provision (benefit) for
income taxes 1,313 0.5 7,118 2.6
------- ---- ------- ----
Net earnings (loss) $ 2,920 1.0 $ 12,961 4.7
======= ==== ======= ====
Basic earnings (loss)
per share $ 0.12 $ 0.47
===== =====
Diluted earnings (loss)
per share $ 0.12 $ 0.47
===== =====
Average shares outstanding
- Basic 24,033 27,304
Average shares outstanding
- Diluted 24,900 27,834
Restaurants included at
end of period 292 300
Comparable sales growth 1.2% 0.7%
Analysis of components of net earnings (loss)
and basic per share amounts
For the second quarter ended
June 12, 2001 June 13, 2000
12 Weeks 12 Weeks
Per Per
$ Amt. Share $ Amt. Share
------- ----- ------- ----
Adjusted net income $ 3,615 $0.15 $ 5,858 $0.22
Non-cash stock compensation
expense - net of tax (9,094) (0.38)
Gain on sale of assets -
net of tax 159 0.01
------- ---- ------- ----
Net earnings (loss) $ (5,320) (0.22) $ 5,858 $0.22
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For the two quarters ended
June 12, 2001 June 13, 2000
12 Weeks 12 Weeks
Per Per
$ Amt. Share $ Amt. Share
------- ----- ------- ----
Adjusted net income $ 10,998 $0.46 $ 12,961 $0.47
Non-cash stock compensation
expense - net of tax (9,094) (0.38)
Gain on sale of assets -
net of tax 1,016 0.04
------- ---- ------- ----
Net earnings (loss) $ 2,920 0.12 $ 12,961 $0.47
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