WICHITA, Kan., April 11, 2003 (PRIMEZONE) -- Lone Star Steakhouse & Saloon, Inc. ("Lone Star" or "Company") (Nasdaq:STAR) announced preliminary unaudited operating results for the twelve week first quarter ended March 25, 2003.
Net income from continuing operations for the first quarter was $8,730,000 or $.41 per share ($.36 diluted) down from $12,719,000 or $.53 per share ($.46 diluted) last year.
Included in income from continuing operations for both the first quarter of fiscal 2003 and 2002 was non-cash stock compensation of $393,000 and $809,000, respectively, which net of applicable income taxes, had the effect of reducing net income by $196,000 and $354,000, respectively.
Revenue from continuing operations decreased 2.3% to $144,478,000 from $147,908,000.
First quarter comparable store sales growth (decline) was (2.9)% for domestic Lone Star Steakhouse & Saloon restaurants, (0.6)% for Sullivan's Steakhouse restaurants and 3.4% for Del Frisco's Double Eagle Steak House restaurants. Del Frisco's comparable sales growth continues to be driven by increased sales in the New York restaurant. Excluding New York, Del Frisco's comparable store sales were (7.8)% for the quarter. Australian comparable store sales were (4.5)% for the quarter.
Lone Star's Chief Executive Officer, Jamie Coulter, stated, "In this difficult environment, I am proud of our Company's performance. Please note that last year's first quarter included the lucrative New Year's Eve sales and profits that are not included in the first quarter of 2003. Thus far this year, we have been negatively impacted by general economic conditions and severe weather. Additionally, beef prices have increased significantly compared to early 2002."
In December 2002, the FASB issued SFAS No. 148 Accounting for Stock Based Compensation Transition and Disclosure, an amendment of SFAS No. 123. Accordingly, effective with the first quarter of fiscal 2002, the Company changed its method of accounting as the Company adopted the fair value recognition provision of SFAS No. 123 for employee stock based compensation. The Company now values stock options based upon an option pricing model and recognizes their value as an expense over the period in which options vest. The Company elected to apply the retroactive restatement method as provided in SFAS No. 148 and as a result all prior periods presented have been restated to reflect the compensation expense that would have been recognized had SFAS No. 123 been applied to all awards granted to employees after January 1, 1995. The effect of this change was to increase net income $16,019,000 ($0.66 per share for basic earnings and $.60 per share for diluted earnings) for the first quarter of fiscal 2002.
In addition, during the first quarter of fiscal 2002, the Company adopted the provisions of SFAS No. 142, Goodwill and Other Intangible Assets requiring that goodwill and intangible assets deemed to have indefinite lives will no longer be amortized. The application of the impairment provisions resulted in a charge for the cumulative effect of an accounting change $318,000 or $.02 per share, net of income taxes of $190,000 to reflect impairment of certain goodwill related to Australian investments.
During 2002, the Company adopted SFAS No. 144 as required, and as a result, the operations of certain restaurants have been reclassified to income or loss from discontinued operations on a historical basis.
On April 8, 2003, Lone Star Steakhouse & Saloon, Inc. announced that the Board of Directors declared the Company's quarterly cash dividend of $.165 per share payable May 2, 2003 to shareholders of record on April 18, 2003.
For interested parties, there will be a conference call with management at 9:00 AM Central Time on Monday, April 14, 2003 to discuss this first quarter earnings release. The call in number is (800)-219-6346. A recorded replay of the conference call will be available from 12:00 PM on April 14, 2003 thru midnight April 28, 2003. The replay call in number is (706)-645-9291 and the confirmation code is 9737878. A listen only connection to the conference call, as well as the replay, will be available on the internet through the Company's website, www.lonestarsteakhouse.com.
Lone Star owns and operates 249 domestic and 20 international Lone Star Steakhouse & Saloon restaurants; 15 Sullivan's Steakhouse restaurants; five Del Frisco's Double Eagle Steak House restaurants and one Frankie's Italian Grille restaurant. Licensees operate three domestic and one international Lone Star restaurants, and one domestic Del Frisco's Double Eagle Steak House restaurant.
This press release contains 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, including 2003 operating performance, and comparable sales of the Company, are reasonable, 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.
Preliminary Unaudited Summary Financial Data for the First
Quarter 2003
(In thousands except for per share amounts)
Mar. 25, Dec. 31,
2003 2002
---------- ----------
Current Assets:
Cash and cash equivalents $ 74,792 $ 65,369
Other current assets 20,668 21,702
---------- ----------
95,460 87,071
Property and equipment, net 334,842 338,735
Intangibles and other assets 48,816 47,507
---------- ----------
$ 479,118 $ 473,313
========== ==========
Current liabilities $ 38,105 $ 42,496
Noncurrent liabilities 15,153 11,058
Stockholders' equity 425,860 419,759
---------- ----------
$ 479,118 $ 473,313
========== ==========
For the first quarter ended
Mar. 25, 2003 Mar. 19, 2002(A)
------------------------------
12 Weeks 12 Weeks
-------- --------
$ % $ %
-------- ---- -------- ----
Net Sales $144,478 $147,908
Costs and expenses:
Costs of sales 49,237 34.1 48,017 32.5
Restaurant operating expenses 66,360 45.9 63,073 42.6
Depreciation and amortization 5,288 3.7 5,893 4.0
-------- ---- -------- ----
Restaurant costs and expenses 120,885 83.7 116,983 79.1
-------- ---- -------- ----
Restaurant operating income 23,593 16.3 30,925 20.9
General and administrative
expenses 10,046 7.0 9,967 6.8
Non-cash stock-based
compensation 393 0.3 809 0.5
-------- ---- -------- ----
Earnings from operations 13,154 9.0 20,149 13.6
Other income 118 0.1 383 0.3
-------- ---- -------- ----
Earnings-continuing-before income
taxes 13,272 9.1 20,532 13.9
Provision for income taxes 4,542 3.1 7,813 5.3
-------- ---- -------- ----
Earnings-continuing operations 8,730 6.0 12,719 8.6
Loss from discontinued
operations - Net (208) (0.1)
Cumulative effect of accounting
change (318) (0.2)
-------- ---- -------- ----
Net earnings $ 8,730 6.0 $12,193 8.3
======== ==== ======== ====
Basic earnings per share:
Continuing operations $0.41 $0.53
Discontinued operations (0.01)
Cumulative effect of accounting
change (0.02)
----- -----
Basic earnings per share $0.41 $0.50
===== =====
Diluted earnings per share:
Continuing operations $0.36 $0.46
Discontinued operations (0.01)
Cumulative effect of accounting
change (0.01)
----- -----
Diluted earnings per share $0.36 $0.44
===== =====
Average shares outstanding
- Basic 21,059 24,198
Average shares outstanding
- Diluted 24,299 27,562
Restaurants included at
end of period 290 295
Comparable sales growth (2.3)% 0.6%
(A) Information for the quarter ended March 19, 2002 has been
restated to reflect the change in accounting for stock-based
compensation as previously described.