LOS ANGELES, Nov. 8, 2006 (PRIMEZONE) -- Grill Concepts, Inc. (Nasdaq:GRIL) today reported continued strong gains in revenues from its Daily Grill and The Grill on the Alley-branded restaurants with same-store sales advancing 7.9 percent and 7.4 percent, respectively, for the 2006 third quarter and nine-month period ended September 24, 2006.
For the third quarter of fiscal 2006, total revenues rose 10.5 percent to $19.2 million from $17.4 million in the year-ago period. Sales at company-owned restaurants grew 11.2 percent to $14.8 million from $13.3 million in the fiscal 2005 third quarter. Management and license fees increased 22.1 percent to $491,000 from $402,000 in the year-ago third quarter.
For the year-to-date period, total revenues rose 11.1 percent to $57.2 million from $51.5 million in the year-ago period. Sales at company-owned restaurants grew 10.6 percent to $44.4 million from $40.1 million in the first nine months of fiscal 2005. Management and license fees increased 17.9 percent to $1.3 million from $1.1 million in the year-ago nine-month period.
"These results reflect same-store sales increases of 5.4 percent at our Daily Grill restaurants and 12.1 percent increases at our Grill on the Alley restaurants for the 2006 third quarter," said Philip Gay, chief executive officer. "We are pleased with these achievements particularly given the challenging trends in our sector. We believe this performance is a testament to the strength of our branded restaurant concepts and exemplifies the value of our freshly-prepared classic American grill fare."
For the 2006 third quarter, the company posted a net loss of $458,000, or $0.07 per share, based on 6,350,827 weighted average shares outstanding, compared with a net loss of $201,000, or $0.04 per share, based on 5,652,230 weighted average shares outstanding. The current quarter results included an income tax benefit of $163,000 related to deferred taxes, along with pre-opening costs of $242,000 associated with The Grill on the Alley restaurant opening in Dallas in July 2006. Fiscal 2006 third quarter results also include stock option expense of $45,000 due to the company's adoption of Financial Accounting Standards Board Statement No. 123(R) ("SFAS 123(R)") effective fiscal 2006.
Earnings before interest, taxes, depreciation and amortization (EBITDA), before pre-opening costs, in the 2006 third quarter totaled $503,000, compared with $554,000 in the fiscal 2005 third quarter.
Net income for the current nine-month period totaled $1.5 million, or $0.24 per diluted share, and includes an income tax benefit of $2.1 million related primarily to the release of a valuation allowance with respect to deferred tax assets. The company recorded stock-based compensation expense of $153,000 for the fiscal 2006 nine-month period, due to the adoption of SFAS 123(R), which reduced diluted earnings per share by $0.01 year-to-date. In the first nine months of fiscal 2005, the company posted net income of $581,000, or $0.09 per diluted share.
EBITDA, before pre-opening costs, in the year-to-date period totaled $2.3 million, compared with $2.5 million in the first nine months of fiscal 2005.
"With our strengthened financial positioning and previously announced purchase agreement of certain contractual rights and interests of Hotel Restaurant Properties, we continue to make progress with our plans to accelerate our growth objectives," Gay said.
During the quarter, the company debuted its newest The Grill on the Alley-branded restaurant in Texas, located at the main entrance of the Dallas Galleria shopping complex, a high-visibility destination that attracts more than 17 million visitors a year. Grill Concepts currently has signed management agreements for two new Daily Grill-branded restaurants to open in new markets in 2007 -- in Memphis adjacent to the FedExForum, home to the NBA's Memphis Grizzlies, and in the heart of Seattle as part of the Seattle Sheraton, which is the largest hotel in the downtown area, currently under a major expansion.
About Grill Concepts, Inc.
Grill Concepts owns, manages and licenses upscale casual and fine dining, full service restaurants under two core brand names: The Grill on the Alley and Daily Grill. The company operates 25 restaurants including five The Grill on the Alley-branded restaurants in Beverly Hills, Hollywood and San Jose, California; Chicago, Illinois; and Dallas, Texas, as well as 20 Daily Grill restaurants in Southern and Northern California; the Washington, D.C. metropolitan region; Houston, Texas; Portland, Oregon; and Skokie, Illinois.
Non-GAAP Financial Measure
The company believes that EBITDA, although a non-GAAP measure, provides greater comparability regarding its ongoing operating performance. However, EBITDA should not be considered an alternative to measurements required by accounting principles generally accepted in the United States ("U.S. GAAP"). A reconciliation of the company's U.S. GAAP information to EBITDA is provided in the attached table.
This news release contains forward-looking statements, which are based on current operations, plans and expectations. Such statements include, but are not limited to, the company's ability to continue expanding its restaurant network and projected opening dates of the Memphis and Seattle restaurants. Actual results may differ materially from these statements due to risks and uncertainties beyond the company's control, which are detailed from time to time in the company's filings with the United States Securities and Exchange Commission.
GRILL CONCEPTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share data)
(unaudited)
Three Months Ended Nine Months Ended
------------------------------------------
Sept. 24, Sept. 25, Sept. 24, Sept. 25,
--------- --------- --------- ---------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenues:
Sales $ 14,792 $ 13,298 $ 44,366 $ 40,102
Cost reimbursements 3,921 3,675 11,535 10,264
Management and
license fees 491 402 1,329 1,127
--------- --------- --------- ---------
Total revenues 19,204 17,375 57,230 51,493
--------- --------- --------- ---------
Operating expenses:
Cost of sales 4,298 3,743 12,576 11,295
Restaurant operating 9,039 8,256 26,544 23,987
Reimbursed costs 3,921 3,675 11,535 10,264
General and
administrative 1,443 1,147 4,305 3,417
Depreciation and
amortization 749 660 1,810 1,603
Pre-opening costs 242 11 440 272
--------- --------- --------- ---------
Total operating
expenses 19,692 17,492 57,210 50,838
--------- --------- --------- ---------
Income (loss) from
operations (488) (117) 20 655
Interest, net (90) (43) (197) (123)
Debt extinguishment
costs -- -- (279) --
--------- --------- --------- ---------
Income (loss) before
benefit (provision)
for income taxes and
minority interest (578) (160) (456) 532
Benefit (provision)
for income taxes 163 (68) 2,138 (277)
Minority interest in
net (profit) loss
of subsidiaries (30) 40 (135) 364
--------- --------- --------- ---------
Net income (loss) (445) (188) 1,547 619
Preferred dividends
accrued (13) (13) (38) (38)
--------- --------- --------- ---------
Net income (loss)
applicable to
common stock $ (458) $ (201) $ 1,509 $ 581
========= ========= ========= =========
Net income (loss) per
share applicable to
common stock:
Basic net income
(loss) $ (0.07) $ (0.04) $ 0.25 $ 0.10
========= ========= ========= =========
Diluted net income
(loss) $ (0.07) $ (0.04) $ 0.24 $ 0.09
========= ========= ========= =========
Weighted average
shares outstanding:
Basic 6,350,827 5,652,230 5,980,299 5,679,752
========= ========= ========= =========
Diluted 6,350,827 5,652,230 6,474,678 6,217,285
========= ========= ========= =========
GRILL CONCEPTS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-U.S. GAAP MEASURES TO U.S. GAAP
(dollars in thousands)
(unaudited)
The following table sets forth the reconciliation of net income
(loss) to earnings before interest, taxes, depreciation and
amortization (EBITDA), before pre-opening costs:
Three Months Ended Nine Months Ended
-----------------------------------------
Sept. 24, Sept. 25, Sept. 24, Sept. 25,
-------- -------- -------- --------
2006 2005 2006 2005
-------- -------- -------- --------
Net income (loss) $ (458) $ (201) 1,509 $ 581
Add:
Interest, net 90 43 197 123
Debt extinguishment
costs -- -- 279 --
Benefit (provision)
for income taxes (163) 68 (2,138) 277
Depreciation and
amortization 749 660 1,810 1,603
Pre-opening costs 242 11 440 272
Minority interest 30 (40) 135 (364)
Preferred dividends 13 13 38 38
-------- -------- -------- --------
EBITDA $ 503 $ 554 $ 2,270 $ 2,530
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