WICHITA, Kansas, Feb. 3, 2000 (PRIMEZONE) -- Lone Star Steakhouse & Saloon, Inc. (Nasdaq:STAR) announced earnings and revenues for the fiscal year ended December 28, 1999. For the year, after tax earnings before unusual charges declined 15.6% to $29,808,000 ($.85 per share) compared to $35,338,000 ($.88 per share) in 1998. Charges for asset impairment and store closings of $24,407,000 ($.70 per share) in 1999 and for asset impairment and change in accounting method of $9,831,000 ($.24 per share) in 1998, resulted in net earnings of $5,401,000 ($.15 per share) for 1999 compared to $25,507,000 ($.64 per share) in 1998.
For the fourth quarter, after tax earnings before unusual charges increased 26.7% to $8,157,000 ($.25 per share) from $6,439,000 ($.16 per share) last year. Charges for store closings and Australian asset impairment of $12,304,000 ($.38 per share) in 1999 and asset impairment of $2,927,000 ($.07 per share) in 1998 resulted in a net loss of $4,148,000 ($.13 per share) in 1999 compared to net earnings of $3,512,000 ($.09 per share) in 1998. The 1999 charges include the effect of the January, 2000 closing of twenty-five domestic restaurants.
Fourth quarter revenues for 1999 decreased 2.1% to $176,263,000 from $179,998,000 in the prior year. For the year, revenues declined 5.0% to $585,755,000 compared to $616,692,000 in 1998.
Fourth quarter comparable store sales growth (decline) was (7.3%), .2%, 5.5%, and 14.9% for domestic Lone Star, Australian Lone Star, Sullivan's and Del Frisco's Double Eagle restaurants, respectively, bringing year-to-date comparable store sales to (10.0%), 2.3%, 5.3%, and 8.4%.
During the fourth quarter the Company re-purchased 4,665,500 shares of its common stock bringing year-to-date repurchases to 8,758,005 shares.
The Company opened a Lone Star Steakhouse & Saloon restaurant in Warwick, Rhode Island in November, 1999.
Jamie Coulter, Chairman and Chief Executive Officer announced several important personnel promotions and additions to the Company. Mr. Coulter stated, "we are very pleased to have acquired the services of one of the industry's outstanding marketing executives, Mr. Robert A. Martin. Bob was most recently the Senior Vice President - Marketing for Applebee's Neighborhood Grills, and joins our Team in the same capacity. Additionally, we are fortunate to have retained the services of WYSE Advertising of Cleveland, Ohio. WYSE has substantial experience in the restaurant industry."
Other additions to the executive ranks of the Company include Mr. Randy Pierce, a former partner with Ernst & Young. Pierce assumes the position of Chief Financial Officer from John White. This re-alignment will allow Mr. White to concentrate more of his effort on his non-financial duties as Executive Vice President. Robert R. Crawford, also a former partner with Ernst & Young has assumed the new position of Vice President - Taxes.
T. D. O'Connell has been appointed Senior Vice President - Operations. Mr. O'Connell has been with the Company for more than five years and previously functioned in various operating and administrative positions. Prior to joining the Company, Mr. O'Connell worked with the Ritz-Carlton Hotels. Jeff Bracken, formerly a Regional Manager with the Company has recently assumed the position of Vice President - Lone Star Operations.
Mark Mednansky has assumed the position of District Manager - Sullivan's Steakhouse. For the past year Mr. Mednansky held the title of Regional Manager - Lone Star Steakhouse & Saloon restaurants. Prior to joining the Company Mr. Mednansky was Director of Operations for Big Four Restaurants of Phoenix.
Dee Lincoln, Co-founder of Del Frisco's Double Eagle Steak House has been promoted to Vice President - Del Frisco's.
Mr. Coulter stated, "The addition of these key individuals to the leadership ranks of the Company, along with our new alliance with WYSE Advertising, should be a tremendous benefit to our Team's focus on stopping the decline in comparable store sales at Lone Star Steakhouse & Saloon restaurants, and assure the continuation of high level execution at our upscale steakhouses."
The Company owns and operates 242 domestic and 40 international Lone Star Steakhouse & Saloon restaurants, three Del Frisco's Double Eagle Steak House restaurants and fourteen Sullivan's Steakhouse restaurants. In addition, there are four Lone Star Steakhouse and Saloons and one Del Frisco's Double Eagle Steakhouse restaurant operated by licensees.
This press release may contain 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 are reasonable, including the development plans of the Company, future sales levels, and operating costs. 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 Fourth Quarter 1999
( $ in thousands except for per share amounts )
CONDENSED BALANCE SHEETS
Dec. 28, Dec. 29,
1999 1998
_______ _______
Current Assets:
Cash and cash equivalents $ 50,673 $ 89,847
Other current assets 18,696 22,459
_______ _______
69,369 112,306
Property and equipment, net 430,482 461,065
Intangibles and other assets 32,950 35,212
_______ _______
$ 532,801 $ 608,583
_______ _______
_______ _______
Total current liabilities $ 48,422 $ 44,713
Noncurrent liabilities 10,429
Stockholders' equity 484,379 553,441
_______ _______
$ 532,801 $ 608,583
_______ _______
_______ _______
CONDENSED INCOME STATEMENTS
For the sixteen weeks ended
Dec. 28, 1999 Dec. 29, 1998
$ % $ %
_______ ____ _______ ____
Net Sales $176,263 $179,998
Costs and expenses:
Costs of sales 62,191 35.3 66,796 37.1
Restaurant operating expenses 78,805 44.7 77,873 43.3
Depreciation and amortization 9,435 5.4 8,778 4.9
Provision for asset impairment &
store closing 19,566 11.1 4,646 2.6
_______ ____ _______ ____
Restaurant costs and expenses 169,997 96.5 158,093 87.8
_______ ____ _______ ____
Restaurant operating income 6,266 3.5 21,905 12.2
General and administrative expenses 14,017 8.0 10,925 6.1
_______ ____ _______ ____
Earnings (loss) from operations (7,751)(4.5) 10,980 6.1
Other income, principally interest 971 0.6 785 0.4
_______ ____ _______ ____
Earnings (loss) before income taxes
and change in accounting method (6,780)(3.9) 10,195 5.7
Provision (benefits)for income taxes (2,632)(1.5) 6,683 3.7
Cumulative effect of change in
accounting method
_______ ____ _______ ____
Net earnings (loss) $(4,148)(2.4) $ 3,512 2.0
_______ ____ _______ ____
_______ ____ _______ ____
Basic earnings per share $ (0.13 $ 0.09
_____ _____
_____ _____
Diluted earnings per share $ (0.13) $ 0.09
_____ _____
_____ _____
Avg. shares outstanding-(in thousands)
- Basic 32,498 39,079
- Diluted 32,498 39,093
Restaurants open at end of period 325 323
Comparable store sales growth (5.1)% (12.2)%
For the fifty two weeks ended
Dec. 28, 1999 Dec. 29, 1998
$ % $ %
_______ ____ _______ ____
Net Sales $585,755 $616,692
Costs and expenses:
Costs of sales 207,696 35.5 231,787 37.6
Restaurant operating expenses 263,940 45.1 270,495 43.9
Depreciation and amortization 30,970 5.3 26,346 4.3
Provision for asset impairment &
store closing 38,931 6.6 4,646 0.8
_______ ____ _______ ____
Restaurant costs and expenses 541,537 92.5 533,274 86.5
_______ ____ _______ ____
Restaurant operating income 44,218 7.5 83,418 13.5
General and administrative expenses 38,057 6.5 32,070 5.2
_______ ____ _______ ____
Earnings (loss) from operations 6,161 1.0 51,348 8.3
Other income, principally interest 2,190 0.4 2,906 0.5
_______ ____ _______ ____
Earnings (loss) before income taxes
and change in accounting method 8,351 1.4 54,254 8.8
Provision (benefit) for income taxes 2,950 0.5 21,843 3.5
Cumulative effect of change in
accounting method 6,904 1.1
_______ ____ _______ ____
Net earnings (loss) $ 5,401 0.9 $ 25,507 4.2
_______ ____ _______ ____
_______ ____ _______ ____
Basic earnings per share $ 0.15 $ 0.64
_____ _____
_____ _____
Diluted earnings per share $ 0.15 $ 0.64
_____ _____
_____ _____
Avg. shares outstanding - (in thousands)
- Basic 35,089 39,989
- Diluted 35,190 40,034
Restaurants open at end of period 325 323
Comparable store sales growth (7.6)% (9.3)%
Analysis of components of net earnings and per share amounts
For the sixteen weeks ended
Dec. 28, 1999 Dec. 29, 1998
Per Per
$ Amt. Share $ Amt. Share
Net earnings excluding
unusual charges $8,157 0.25 $6,439 0.16
Provision for asset
impairment - net of tax (10,361) (0.32) (2,927) (0.07)
Provision for store closing
costs - net of tax (1,943) (0.06)
Cumulative effect of change in
accounting ________ ______ ______ ______
Net earnings (loss) $(4,148) (0.13) $ 3,512 0.09
________ ______ _______ ____
________ ______ _______ ____
For the fifty two weeks ended
Dec. 28, 1999 Dec. 29, 1998
Per Per
$ Amt. Share $ Amt. Share
Net earnings excluding
unusual charges $ 29,808 0.85 $35,338 0.88
Provision for asset
impairment - net of tax (22,464) (0.64) (2,927) (0.07)
Provision for store closing
costs - net of tax (1,943) (0.06)
Cumulative effect of change
in accounting (6,904) (0.17)
_________ ______ ________ ______
Net earnings (loss) $ (5,401) (0.15) $25,507 0.64
_________ ______ _______ ____
_________ ______ _______ ____
CONTACT: Lone Star Steakhouse & Saloon, Inc.
John D. White
(316) 264-8899