DALLAS, Feb. 5, 2002 (PRIMEZONE) -- Romacorp, Inc. today announced results for its third quarter ended December 23, 2001.
Revenue for the quarter decreased $2.2 million, or 6.9%, to $29.2 million as compared with the same quarter of the prior year. On a year-to-date basis, revenues decreased $4.2 million, or 4.2%, to $94.4 million as compared with the same period of the prior year. The lower revenue is due primarily to a decrease in sales at comparable restaurants of 7.4% for the quarter and 5.7% for the year to date.
During the third quarter, franchisees opened eleven restaurants in eight different countries including Canada, Dominican Republic, Ecuador, Germany, Mexico, Spain, United States and Venezuela. The restaurants in Quito, Ecuador and Santo Domingo, Dominican Republic represent the first Tony Roma's restaurants in those countries. In addition, a development agreement for Trinidad and Tobago was signed during the quarter.
For the quarter, EBITDA decreased 21.4% to $2.6 million from $3.4 million during the same quarter of the prior year while on a year-to-date basis, EBITDA of $8.7 million was 13.0% lower than the prior year amount of $10.0 million. For the quarter and year-to-date periods, the EBITDA decrease is due primarily to the sales shortfall.
Effective March 26, 2001, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142") that requires that goodwill no longer be amortized to earnings, but instead is reviewed for impairment. The adoption of SFAS No. 142 resulted in a decrease in amortization expense of $183,000 for the quarter and $550,000 for the year to date.
The net loss for the quarter was $581,000 compared with a net loss of $2.1 million during the same quarter of the prior year. On a year-to-date basis, the net loss was $1.2 million compared to a net loss of $2.2 million during the prior year. During the third quarter of the prior year, an impairment charge of $2.3 million was recorded related to under performing assets and during the first quarter of the prior year, an extraordinary gain of $1.2 million, net of tax, was recognized related to the purchase of Senior Notes at a discount from par.
Frank H. Steed, Chief Executive Officer and President commented, "We are encouraged by the continued worldwide expansion of the Tony Roma's brand during the recently completed quarter, particularly in light of the domestic economic challenges that are affecting our Tony Roma's restaurants. Tourism declines in Florida have negatively impacted our core markets of Miami and Orlando during the quarter and we anticipate continued softness in those markets during the fourth quarter. We remain focused on improving our operations while testing a number of new menu items that we anticipate will broaden the appeal of Tony Roma's by adding breadth of flavor and offering greater value to our menu."
Romacorp, Inc. operates and franchises Tony Roma's restaurants, the world's largest casual dining restaurant chain specializing in ribs. The Company currently operates 60 restaurants and franchises 192 restaurants in 29 states and 24 foreign countries and territories.
Forward-Looking Comments
Statements which are not historical facts contained herein are forward-looking statements that involve estimates, risks and uncertainties, including but not limited to: consumer demand and market acceptance risk; the level of and the effectiveness of marketing campaigns by the Company; training and retention of skilled management and other restaurant personnel; the Company's ability to locate and secure acceptable restaurant sites; the effect of economic conditions, including interest rate fluctuations, the impact of competing restaurants and concepts, new product introductions, product mix and pricing, the cost of commodities and other food products, labor shortages and costs and other risks detailed in filings with the Securities and Exchange Commission.
ROMACORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands)
(UNAUDITED)
Thirteen Weeks Thirty-Nine Weeks
Ended Ended
------------------- -------------------
Dec. 23, Dec. 24, Dec. 23, Dec. 24,
2001 2000 2001 2000
-------- -------- -------- --------
Net restaurant sales $ 26,482 $ 28,919 $ 86,796 $ 91,272
Net franchise revenue 2,761 2,504 7,586 7,277
-------- -------- -------- --------
Total revenues 29,243 31,423 94,382 98,549
Cost of sales 8,528 9,609 28,609 30,956
Direct labor 9,385 9,723 29,639 29,710
Other 8,045 8,379 25,423 25,322
General and administrative
expenses 2,177 2,371 6,616 8,626
Impairment of long-lived
assets -- 2,303 -- 2,303
-------- -------- -------- --------
Total operating expenses 28,135 32,385 90,287 96,917
-------- -------- -------- --------
Operating income (loss) 1,108 (962) 4,095 1,632
Other income (expense):
Interest expense (2,057) (2,333) (6,313) (6,967)
Miscellaneous income 52 41 342 91
-------- -------- -------- --------
Loss before income taxes
and extraordinary item (897) (3,254) (1,876) (5,244)
Benefit for income taxes (316) (1,139) (660) (1,838)
-------- -------- -------- --------
Loss before
extraordinary item (581) (2,115) (1,216) (3,406)
Extraordinary gain on
early retirement of debt,
net of tax -- -- -- 1,214
-------- -------- -------- --------
Net loss $ (581) $ (2,115) $ (1,216) $ (2,192)
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Memo:
EBITDA $ 2,641 $ 3,359 $ 8,738 $ 10,042
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