DALLAS, Feb. 4, 2000 (PRIMEZONE) -- Romacorp, Inc. today announced results for its third quarter ended December 26, 1999.
Revenue for the quarter increased $4.0 million, or 16.6%, to $28.3 million as compared with the same quarter of the prior year. On a year-to-date basis, revenues increased $12.3 million, or 16.8%, to $85.8 million as compared to the same period of the prior year. This increase is due primarily to an increase in the number of Company-owned restaurants for the quarter and year-to-date. Comparable store sales were flat during the quarter and increased 0.6% on a year-to-date basis. During the quarter, two new Company-operated restaurants were opened, eight franchised stores were opened and two franchised stores were closed.
For the quarter, EBITDA before pre-opening expenses of $4.0 million compared favorably to the prior year quarter amount of $3.9 million as the impact of incremental sales was offset by general and administrative expense increases in field supervision and the costs associated with recruiting and training of new managers due to the continued growth of the Tony Roma's concept. On a year-to-date basis, EBITDA before pre-opening expenses of $13.2 million was 11.1% above the prior year amount of $11.9 million. Effective March 29, 1999, the Company adopted Statement of Position 98-5 ("SOP 98-5") Accounting for Costs of Start-up Activities which requires the Company to expense pre-opening costs as incurred rather than the previous policy of amortizing those costs over a twelve-month period and to report the initial adoption as a cumulative effect of a change in accounting principle. EBITDA for the quarter and year-to-date after pre-opening expenses of $377,000 and $1,238,000 was $3.6 million and $12.0 million, respectively.
The net loss for the third quarter was $359,000 compared with a net loss of $184,000 during the same quarter of the prior year. On a year-to-date basis, the Company has experienced a net loss before the cumulative effect of the change in accounting principle of $135,000 compared to net income of $814,000 during the prior year. The decrease in net earnings on a year-to-date basis is due primarily to increased interest expense of $1.7 million that is primarily attributable to the $75 million of Senior Notes that were issued on July 1, 1998 in conjunction with the recapitalization transaction. The increased interest expense and increased general and administrative expenses were offset by the profit resulting from increased revenues of $12.3 million and reduced food costs. The cumulative effect after tax of adopting SOP 98-5 was $513,000.
Bob Page, Chief Executive Officer, commented, "We continue to move forward with our expansion plans for the Tony Roma's concept. We incurred incremental administrative costs during the quarter that we felt were necessary to support our planned growth. We currently project opening two Company-owned and three franchised restaurants during the fourth quarter. Also, to further increase customer frequency at existing restaurants, we are testing a redesigned menu and an addition of several premium steak items to supplement our world famous ribs."
Romacorp, Inc. operates and franchises Tony Roma's restaurants, the world's largest casual dining restaurant chain specializing in ribs. The Company operates 58 restaurants and franchises 168 restaurants in 28 states and 20 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.
ROMACORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands)
(UNAUDITED)
13 Weeks Ended 39 Weeks Ended
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12/26/99 12/27/98 12/26/99 12/27/98
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Net restaurant sale $ 25,854 $ 22,047 $ 79,021 $ 66,978
Net franchise revenue 2,444 2,222 6,777 6,475
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Total revenues 28,298 24,269 85,798 73,453
Cost of sales 8,317 7,348 25,360 23,104
Direct labor 8,296 6,935 24,771 20,773
Other 6,655 5,349 19,424 16,160
General and administrative
Expenses 3,147 2,368 9,168 6,725
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Total operating
expenses 26,415 22,000 78,723 66,762
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Operating income 1,883 2,269 7,075 6,691
Other income (expense):
Interest expense (2,473) (2,557) (7,385) (5,658)
Miscellaneous 37 22 102 239
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Income (loss) before
income taxes (553) (266) (208) 1,272
Provision (benefit) for
income taxes (194) (82) (73) 458
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Income (loss) before
cumulative effect
of a change in
accounting principle (359) (184) (135) 814
Cumulative effect
of a change in
accounting principle - - (513) -
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Net income (loss) $ (359) $ (184) $ (648) $ 814
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Memo:
EBITDA $ 3,623 $ 3,933 $ 11,959 $ 11,877
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EBITDA before
preopening expenses $ 4,000 $ 3,933 $ 13,197 $ 11,877
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CONTACT: Richard A. Peabody
Vice President and
Chief Financial Officer
(214) 343-7812