LOS ANGELES, Nov. 9, 2007 (PRIME NEWSWIRE) -- Grill Concepts, Inc. (Nasdaq:GRIL), which operates The Grill on the Alley and Daily Grill-branded restaurants, today reported another quarter of double-digit revenue gains for the three months ended September 30, 2007, principally driven by strong same-store sales increases and ongoing progress with the company's accelerated expansion strategy.
For the fiscal 2007 third quarter, total revenues rose 11.0% to $21.3 million from $19.2 million in the prior-year period. Sales at company-owned restaurants increased 7.6% to $15.9 million. Management and license fees rose 33.6% over the prior-year period, to $656,000. In the fiscal 2006 third quarter, company-owned restaurant sales amounted to $14.8 million, and management and license fees were $491,000.
"We are pleased with the continued strength of our same-store sales, particularly in light of the challenging operating environment that has impacted many of our peers," said Philip Gay, chief executive officer. "Same-store sales company-wide advanced 9.1% for the current third quarter, with our Grill on the Alley restaurants posting gains of 15.7%, and our Daily Grill restaurants delivering a 5.1% increase."
"As a result of the progress we have made since initiating an accelerated expansion strategy in 2006, new restaurant openings are also contributing to the growth in our total revenues. To date in 2007, we have opened four new restaurants, including our Memphis Daily Grill in April 2007, Seattle Daily Grill in June 2007, Austin Daily Grill in July 2007, and, earlier this week, our Fresno Daily Grill. With the completion of a $14.1 million private offering this summer, we now have significantly greater financial resources to fuel our goal of opening four to six restaurants per year in both new and existing geographic markets," Gay said.
For the nine months ended September 30, 2007, total revenues rose 15.0% to $65.8 million from $57.2 million. Sales at company-owned restaurants grew 12.5% to $49.9 million from $44.4 million in the first nine months of fiscal 2006. Management and license fees for the year-to-date period increased 29.1% percent to $1.7 million from $1.3 million in the fiscal 2006 nine-month period.
Year-to-date, the company's same-store sales increased 10.2% over the fiscal 2006 nine months, with the Grill on the Alley and Daily Grill restaurants posting gains of 15.9% and 6.8%, respectively.
Earnings before interest, taxes, depreciation and amortization (EBITDA), before pre-opening costs and minority interest, totaled $428,000 in the 2007 fiscal third quarter and $2.4 million for the year-to-date period. For the comparable fiscal 2006 periods, earnings before interest, taxes, depreciation and amortization, before pre-opening costs, minority interest and contract termination costs totaled $503,000 for the third quarter and $2.3 million for the nine-month period.
For the fiscal 2007 third quarter, the company posted a net loss applicable to common stock of $589,000, or $0.07 per share. In the prior-year period, Grill Concepts incurred a net loss applicable to common stock of $1.9 million, or $0.30 per share, which included a non-recurring contract termination expense of $3.1 million related to the purchase of certain contractual rights held by Hotel Restaurant Properties, Inc. and a tax benefit of $1.7 million attributable to the reversal of the majority of the company's valuation allowance with respect to deferred tax assets.
For the year-to-date period, the company sustained a net loss applicable to common stock of $447,000, or $0.06 per share. This compares with net income applicable to common stock of $31,000, or $0.01 per diluted share, for the fiscal 2006 nine months, including the non-recurring contract termination expense of $3.1 million, along with a tax benefit of $3.6 million, as described above.
During the quarter, the company signed a lease for its sixth flagship Grill on the Alley restaurant in The Promenade at Westlake, located in Thousand Oaks, California. The company also has executed leases and management agreements for new Daily Grill restaurants in Tulsa, Oklahoma; Boston, Massachusetts; North Dallas, Texas; and Phoenix, Arizona.
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 28 restaurants including five The Grill on the Alley-branded restaurants in Beverly Hills, Hollywood, San Jose, California; Chicago, Illinois; and Dallas, Texas, as well as 23 Daily Grill restaurants in California; the Washington, D.C. metropolitan region; Houston and Austin, Texas; Portland, Oregon; Memphis, Tennessee; and Seattle, Washington.
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 the projected opening dates of 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
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
---------------------- ----------------------
Sept. 30, Sept. 24, Sept. 30, Sept. 24,
2007 2006 2007 2006
-------- -------- -------- --------
Revenues:
Sales $ 15,920 $ 14,792 $ 49,898 $ 44,366
Cost reim-
bursements 4,748 3,921 14,216 11,535
Management and
license fees 656 491 1,716 1,329
-------- -------- -------- --------
Total
revenues 21,324 19,204 65,830 57,230
Operating
expenses:
Cost of sales 4,518 4,298 14,264 12,576
Restaurant
operating 9,823 9,039 29,801 26,544
Reimbursed
costs 4,748 3,921 14,216 11,535
General and
administrative 1,807 1,443 5,175 4,305
Depreciation
and
amortization 614 594 1,716 1,655
Pre-opening
costs 555 285 799 483
Contract
termination
cost -- 3,101 -- 3,101
-------- -------- -------- --------
Total
operating
expenses 22,065 22,681 65,971 60,199
Loss from
operations (741) (3,477) (141) (2,969)
Interest, net (7) (90) (192) (197)
Debt
extinguishment
costs -- -- -- (279)
-------- -------- -------- --------
Loss before
benefit for
income taxes
and minority
interest (748) (3,567) (333) (3,445)
Benefit for
income taxes 296 1,674 131 3,649
-------- -------- -------- --------
Income (loss)
before minority
interest (452) (1,893) (202) 204
Minority interest
in net profit
of subsidiaries (137) (30) (239) (135)
-------- -------- -------- --------
Net income (loss) (589) (1,923) (441) 69
Preferred
dividends
accrued -- (13) (6) (38)
-------- -------- -------- --------
Net income
(loss)
applicable
to common
stock $ (589) $ (1,936) $ (447) $ 31
======== ======== ======== ========
Net income
(loss) per
share applicable
to common stock:
Basic $ (0.07) $ (0.30) $ (0.06) $ 0.01
======== ======== ======== ========
Diluted $ (0.07) $ (0.30) $ (0.06) $ 0.01
======== ======== ======== ========
Weighted-average
shares outstanding:
Basic 7,929 6,351 6,948 5,980
======== ======== ======== ========
Diluted 7,929 6,351 6,948 6,475
======== ======== ======== ========
GRILL CONCEPTS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-U.S. GAAP MEASURES TO U.S. GAAP
(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, minority interest and contract
termination costs:
Three Months Ended Nine Months Ended
----------------------- ---------------------
Sept. 30, Sept. 24, Sept. 30, Sept. 24,
2007 2006 2007 2006
----------------------- ---------------------
Net income
(loss) $ (589) $ (1,923) $ (441) $ 69
Add:
Interest
expense, net 7 90 192 197
Debt
extinguishment
costs -- -- -- 279
Income taxes (296) (1,674) (131) (3,649)
Depreciation
and amortization 614 594 1,716 1,655
Pre-opening costs 555 285 799 483
Minority interest 137 30 239 135
Contract
termination costs -- 3,101 -- 3,101
------ -------- ------- -------
EBITDA $ 428 $ 503 $ 2,374 $ 2,270
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