Jenna, could you please give some input on this,,This is the second qrt in a row of this kind of performance. Analysts appear to
be asleep at the wheel. Thanks in advance
Monday August 24, 4:02 pm Eastern Time
Company Press Release
Roadhouse Grill Reports Record
Quarterly Earnings of $.14 Per Share
Quarterly Revenues Increase 26% to $29 Million Management Credits
Performance Improvement Plan
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Aug. 24, 1998--Roadhouse Grill, Inc.
(NASDAQ:GRLL - news) reported today that net after-tax earnings for the quarter ended July 26, 1998
were $1,260,031, or $.14 per share, a significant improvement from a loss of $148,307, or $(.02) per
share, for the quarter ended July 27, 1997. After tax earnings were 4.3% of sales for the July 1998
quarter. Revenues increased 25.8%, to $29,040,361 in the July 1998 quarter, from $23,083,009 in the
July 1997 quarter.
The Company attributed the substantial improvements in revenues and earnings to new management and
successful implementation of a previously announced three-point plan to improve operating performance.
In November 1997, the Company's Board of Directors appointed Ayman Sabi, a member of the Board, to
head a management committee to review Company operations and improve Company performance. Mr.
Sabi was subsequently elected President and Chief Executive Officer on February 6, 1998. The new
management team formulated a plan to (1) IMPROVE UNIT ECONOMICS AND OPERATING
MARGINS by better managing food, labor and other operating costs; (2) INCREASE SAME STORE
SALES PERFORMANCE through increased advertising, greater brand awareness, and better execution;
(3) ENHANCE REAL ESTATE AND NEW RESTAURANT DEVELOPMENT through improved site
selection and better construction management. Mr. Sabi, commenting on the Company's substantially
improved operating performance and earnings, cited progress in each of these three areas.
Vincent Tan, Chairman of the Board noted ''We are very pleased that there has been a commitment to
improve performance at every level of the organization.'' Mr. Sabi added ''this commitment has resulted
in improvements in purchasing, contracting and cost control. Better allocation and utilization of restaurant
management and operating personnel has reduced labor costs from 30.4% of sales to 28.3% of sales. At
the same time, we have reduced general and administrative expenses in absolute and percentage terms.''
Sabi continued, ''Same store sales increased 0.2% percentage points for the July 1998 quarter, compared
to the July 1997 quarter. Coupled with an increase in same store sales for the quarter ended April 1998,
we believe we have reversed a trend of declining same store sales which had adversely affected
Company performance since the first quarter of 1995. In part, this reflects the impact of our
''Rambunctious Roadhouse'' advertising campaign, an integrated TV, radio and print advertising
campaign we expect to continue in the Company's major markets through the fourth calendar quarter of
1998.''
While restructuring and improving the Company's new site development process, Sabi commented that
the Company decided, at the end of 1997, to reject nine sites identified by previous management, which
did not meet the Company's new standards and criteria. ''That created a delay in development,'' agreed
Sabi, ''but the results were worth it. Roadhouse Grill opened seven new restaurants from December
1997 through July 1998, and now has nine additional sites under various stages of construction. We have
defined and are using a new set of criteria for site selection, based on concentration of units within media
and management-efficient market areas. We also terminated previous sole-source construction and
equipment contracts and implemented competitive bidding for construction, fixtures and equipment.
Newly opened restaurants are operating above the Company's average for sales and profitability, and we
should be back on schedule adding superior sites during the third fiscal quarter. Addition of new
restaurant sites is now among our highest priorities.''
Mr. Sabi concluded, ''Continued improvement of operating performance is essential in our competitive
industry. We are pleased with progress through the July quarter, and earnings of $.14 per share, but we
are far from satisfied. Our mission is to achieve continued improvement in operations, efficiencies,
performance and earnings, while delivering Roadhouse Grill's ''rambunctious'' dining experience to our
guests.''
Roadhouse Grill currently owns and operates 47 and franchises three full-service, casual dining
restaurants under the name ''Roadhouse Grill''. The Roadhouse Grill concept offers a ''rambunctious''
style consistent with the Company's motto: ''Eat, drink and be yourself.'' The comfortable, entertaining
roadhouse setting is designed to appeal to a broad range of customers, including business people,
couples, singles and particularly families.
Certain of the statements in this release are forward-looking statements that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve known and unknown risks and uncertainties that may cause the Company's actual results in future
period to differ materially from forecasted results. Those risks are described in the Company's filings with
the Securities and Exchange Commission (the ''SEC'') over the last 12 months, copies of which are
available from the SEC or may be obtained upon request from the Company.
($ in thousands, except per share data)
Proforma
Quarter Ended Quarter Ended
July 26, 1998 July 27, 1997
------------- -------------
(Unaudited)
Statement of Operations Data:
Total revenues $ 29,040 $ 23,083
Cost of restaurant sales:
Food & beverage 9,608 7,696
Labor & benefits 8,233 7,009
Occupancy & other 5,821 4,423
Pre-opening amortization 364 555
------------- -------------
Total cost of restaurant sales 24,026 19,683
Depreciation & amortization 1,716 1,210
General & administrative 1,631 2,083
------------- -------------
Total operating expense 27,373 22,976
Operating income (loss) 1,667 107
Other income (expense):
Interest expense, net (497) (327)
Equity in income of affiliates 32 26
Other, net (game room revenues) 93 89
------------- -------------
Total other income (expense) (372) (212)
------------- -------------
Pretax Income (loss) 1,295 (105)
Income tax (a) 35 43
------------- -------------
Net income (loss) $ 1,260 $ (148)
============= =============
Basic net income
(loss) per common share $ 0.14 $ (0.02)
============= =============
Diluted net income
(loss) per common share $ 0.13 $ (0.02)
============= =============
Weighted average common shares
outstanding 9,308,411 9,305,408
============= =============
Weighted average common shares
and share equivalents outstanding -
assuming dilution 9,458,538 9,305,408
============= =============
(a) The Company has a net operating loss carryforward. Income taxes
represent state income tax and alternative minimum tax.
For copies of Roadhouse Grill's recent press releases via fax, at no charge, please call (888) 329-8932.
Contact:
Roadhouse Grill, Inc., Fort Lauderdale
Dennis C. Jones, EVP & CFO
954/489-9214 |
