DALLAS, Aug. 2, 2002 (PRIMEZONE) -- Romacorp, Inc. today announced results for its first quarter ended June 23, 2002.
Revenue for the quarter decreased $3.3 million, or 9.7% to $30.3 million as compared with the same quarter of the prior year. Of this decrease, $1.7 million is due to the closure of five restaurants during the prior fiscal year and the remaining decrease is due primarily to a 4.9% decrease in sales at comparable restaurants versus the same period of the prior year.
During the first quarter, franchisees opened restaurants in Austin, Texas, Maracay, Venezuela and San Potosi, Mexico and one franchised restaurant in Mexico closed. The new restaurant in Venezuela represents the third mall-based Rib Express in that country.
For the quarter, EBITDA decreased 25.4% to $2.6 million from $3.4 million during the same quarter of the prior year due primarily to the sales shortfall at comparable restaurants. During the quarter, the Company benefited from lower rib prices offset by higher group insurance, workers' compensation insurance, repair and maintenance costs and the expense associated with the exchange offer that was announced on May 14, 2002 and expired on June 18, 2002.
The net loss for the quarter was $478,000 compared with a net loss of $1,000 during the same quarter of the prior year. During the quarter, the Company recorded a gain on the sale of one property of $45,000 versus a gain on sale of assets of $205,000 recorded during the same quarter of the prior year.
Frank H. Steed, Chief Executive Officer and President commented, "In response to the continued decline in consumer confidence and the resulting impact on our Company, we continue to look for new ways to improve our sales and reduce costs. We have implemented a number of cost reduction initiatives at our Support Center that will result in lower general and administrative costs in future quarters while maintaining our guests' experience in our restaurants. Our entire organization is enthusiastic about the recent addition of Mark Buehler as Vice President of Marketing and we anticipate that his experience will benefit our Company and franchise operations during future quarters as we refocus our marketing strategy and further expand our menu offerings."
Romacorp, Inc. operates and franchises Tony Roma's restaurants, the world's largest casual dining restaurant chain specializing in ribs. The Company currently operates 56 restaurants and franchises 197 restaurants in 29 states and 26 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 Ended
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June 23, 2002 June 24, 2001
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Net restaurant sales $ 27,788 $ 31,101
Net franchise revenue 2,469 2,414
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Total revenues 30,257 33,515
Cost of sales 9,009 10,376
Direct labor 9,406 10,384
Other 8,187 8,670
General and administrative expenses 2,472 2,207
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Total operating expenses 29,074 31,637
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Operating income 1,183 1,878
Other income (expense):
Interest expense (2,022) (2,149)
Miscellaneous 105 270
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Loss before income taxes (734) (1)
Income tax benefit (256) --
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Net loss $ (478) $ (1)
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Memo:
EBITDA $ 2,565 $ 3,438
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