DALLAS, June 4, 2001 (PRIMEZONE) -- Romacorp, Inc. today announced results for its fourth quarter and fiscal year ended March 25, 2001. Revenue for the quarter increased $3.1 million, or 9.5% to $36.4 million as compared with the same quarter of the prior year. For the fiscal year, revenues increased $16.1 million, or 13.6% to $134.9 million as compared with the prior year. These increases are due to the opening of additional Company-owned restaurants during the current and prior year and an increase in comparable store sales of 0.9% for the quarter and 2.9% for the fiscal year.
During the fourth quarter, the Company opened the sixth Tony Roma's restaurant in Las Vegas and closed one restaurant in Orlando. Franchisees continue to support the worldwide expansion of the Tony Roma's brand and opened one restaurant in Beechmont, Ohio and five international franchised restaurants. Two of the new international restaurants were in Canada, and one in each of Spain, China and Honduras.
For the fourth quarter, EBITDA decreased 29.1% to $4.3 million from $6.0 million during the same quarter of the prior year while for the fiscal year, EBITDA of $14.3 million was 25.5% lower than the prior year amount of $19.2 million. This decrease in EBITDA is due primarily to significant increases in costs of sales that remained at levels significantly above the prior year. The Company has continued to experience higher rib and beef costs during the quarter and fiscal year and is projecting rib costs to remain at these higher levels during the next two fiscal quarters. The Company also experienced higher restaurant labor costs and increases in lease and utility costs for the quarter and fiscal year.
The net income for the quarter was $158,000 compared with net income of $394,000 during the same quarter of the prior year. For the year, the Company has experienced a net loss of $2.0 million compared with a net loss of $254,000 during the prior year. During the fourth quarter and fiscal year, restaurant pre-opening expense, interest expense and the provision (benefit) for income taxes were favorable to the prior year. During the fourth quarter of the prior year, $1.5 million of non-cash charges were recorded by the Company related to the asset impairment of one under-performing restaurant and the write-off of investments and related receivables in two joint ventures, partially offset by the after tax extraordinary gain of $592,000 related to the repurchase of Senior Notes. During the current year, the Company recorded an impairment charge of $2.3 million necessary to reduce the asset carrying value of four under-performing restaurants. During the first quarter of the current fiscal year, an extraordinary gain of $1.2 million, net of tax, was recognized related to the utilization of the Company's revolving credit facility to purchase Senior Notes. In addition, net income during the first quarter of the prior year was negatively impacted by a charge of $513,000 related to the adoption of Statement of Position 98-5 Accounting for Costs of Start-up Activities.
Frank H. Steed, Chief Executive Officer commented, "We are pleased with the continued growth of the Tony Roma's brand on both the domestic and international fronts. However, our results for the quarter and year were adversely impacted by a significant increase in cost of our core baby-back rib product. Since the Company uses only meat products processed in plants inspected by the USDA, the import restrictions on the Danish pork products have resulted in increased demand for the North American meat products used by the Company. In light of these challenges, we have focused on selectively re-engineering our menu, introducing new steak products and implementing other cost reduction initiatives to improve our sales, operational efficiency and profits."
Romacorp, Inc. operates and franchises Tony Roma's restaurants, the world's largest casual dining restaurant chain specializing in ribs. The Company operates 62 restaurants and franchises 179 restaurants in 30 states and 22 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands)
(UNAUDITED)
Thirteen Weeks Ended Fifty-two Weeks Ended
March 25, March 26, March 25, March 26,
2001 2000 2001 2000
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Net restaurant sales $ 33,692 $ 30,835 $ 124,964 $ 109,621
Net franchise revenue 2,663 2,367 9,939 9,145
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Total revenues 36,355 33,202 134,903 118,766
Cost of sales 11,256 9,196 42,213 32,959
Direct labor 10,582 9,651 40,293 34,422
Other 9,074 7,520 34,393 28,468
General and
administrative expenses 3,105 3,336 11,731 12,343
Impairment of
long-lived assets -- 464 2,303 464
Other loss provisions -- 1,022 -- 1,022
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Total operating expenses 34,017 31,189 130,933 109,678
Operating income (loss) 2,338 2,013 3,970 9,088
Other income (expense):
Interest expense (2,152) (2,356) (9,119) (9,741)
Miscellaneous income 56 39 147 141
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Income (loss) before
income taxes, cumulative
effect of a change in
accounting principle and
extraordinary item 242 (304) (5,002) (512)
Income tax
provision (benefit) 84 (106) (1,754) (179)
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Income (loss) before
cumulative effect of a
change in accounting
principle and
extraordinary item 158 (198) (3,248) (333)
Cumulative effect of a
change in accounting
principle, net of tax -- -- -- (513)
Extraordinary gain on
early retirement of debt,
net of tax -- 592 1,214 592
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Net income (loss) $ 158 $ 394 $ (2,034) $ (254)
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Memo:
EBITDA $ 4,267 $ 6,019 $ 14,308 $ 19,205
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