WICHITA, Kan., April 2, 2002 (PRIMEZONE) -- Lone Star Steakhouse & Saloon, Inc. (Nasdaq:STAR) announced operating results for the twelve week first quarter ended March, 19, 2002. For the quarter, adjusted net income (net income before unusual charges and credits, including non-cash stock compensation and the cumulative effect of a change in accounting for goodwill impairment under FAS 142 which the Company was required to adopt on December 26, 2001) increased 75.3% to $12,868,000 or $0.53 per share ($0.48 diluted) from $7,342,000 or $0.30 ($0.30 diluted) in the prior year.
First quarter revenues increased 3.5% to $148,808,000 from $143,753,000 last year. Comparable store sales changes, by concept, were positive 1.1% for domestic Lone Star Steakhouse & Saloon restaurants, (2.6%) for Sullivan's Steakhouse restaurants and positive 5.7% for Del Frisco's Double Eagle Steak House restaurants.
Adjusted EBITDA for the quarter increased 53% to $27.9 million or $1.15 per share compared to $18.3 million or $0.76 per share last year. Financial position remains exceptionally strong, with $102 million in cash, no debt and a book value of $19.59 per share.
Unusual items net of applicable tax, primarily non-cash compensation expense resulting from the increase in the price of the Company's common stock during the quarter, were a net charge of $16,694,000 or $0.69 per share as compared to a credit of $898,000 or $0.04 per share in the prior year, resulting in a net loss for the quarter of $3,826,000 or $0.16 per share compared to net income of $8,240,000 or $0.34 per share last year.
The unusual charges and (credit) items net of applicable income tax are set forth below in thousands of dollars, except for per share amounts:
For the first quarter ended
March 19, 2002 March 20, 2001
Per Per
Amount Share Amount Share
------- ----- ------- -----
Non-cash stock
compensation $16,373 $0.68 $ -- $ --
Loss (gain) on sale
of assets 3 0.00 (898) (0.04)
Cumulative effect of
change in accounting 318 0.01 -- --
------- ----- ------- -----
$16,694 $0.69 $ (898) $(0.04)
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Domestic margins improved due to higher average unit sales, continued improvement in operating controls aided by lower beef and natural gas prices, lower cost and more effective marketing programs than last year.
Australian comparable store sales declined 7.9%. Sales and operating margins in Australia continue to be negatively impacted by the Goods and Services Tax on restaurant sales and the soft Australian economy. As part of the Company's plan to improve Australian operations, Australian Lone Stars will begin a test of shallow discount marketing similar to the program that has been successful in the domestic Lone Stars for the past three quarters. The test will begin this week.
The Board of Directors declared the Company's quarterly cash dividend of $.15 per share payable April 24, 2002 to shareholders of record on April 10, 2002.
The Company owns and operates 249 domestic Lone Star Steakhouse & Saloon restaurants; 15 Sullivan's Steakhouse restaurants; and five Del Frisco's Double Eagle Steak House restaurants. There are 25 company-owned international Lone Star Steakhouse & Saloon restaurants. Licensees operate three domestic and one international Lone Star restaurants, and one domestic Del Frisco's Steak House restaurant.
Future reported earnings will continue to be impacted by FASB Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation, an interpretation of APB No. 25," which requires a quarterly non-cash charge for the "in-the-money" component of stock options that have been modified. In subsequent quarters, the charge or credit to non-cash compensation expense will be for the change, either up or down from the previous reported quarter. This non-cash charge could introduce extreme volatility in reported earnings. For greater clarity and comparability, the Company will continue to report net income both with the non-cash charge or credit and also adjusted to exclude the charge or credit for non-cash stock compensation.
For interested parties, there will be a conference call with management at 8 a.m. Central Time on Wednesday, April 3, 2002 to discuss this first quarter earnings release. The call in number is (719)-457-2657 and the confirmation code is 595134. A recorded replay of the conference call will be available from 12 p.m. on April 3, 2002 through midnight on April 17, 2002. The replay call in number is (719)-457-0820 and the confirmation code is 595134. 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.
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 the development plans 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.
Unaudited Summary Financial Data for the First Quarter 2002
(In thousands except for per share amounts)
Mar. 19, Dec. 25,
2002 2001
--------- --------
Current Assets:
Cash and cash equivalents $ 102,046 $ 82,919
Other current assets 18,953 20,768
--------- --------
120,999 103,687
Property and equipment, net 362,797 369,883
Intangibles and other assets 52,742 41,459
--------- --------
$ 536,538 $ 515,029
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Current liabilities $ 52,130 $ 55,403
Noncurrent liabilities 7,612 5,187
Stockholders' equity 476,796 454,439
--------- --------
$ 536,538 $ 515,029
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For the first quarter ended
Mar. 19, 2002 Mar. 20, 2001
12 Weeks 12 Weeks
$ % $ %
-------- ---- -------- ----
Net Sales $148,808 $143,753
Costs and expenses:
Costs of sales 48,830 32.8 49,703 34.6
Restaurant operating
expenses 64,103 43.1 67,904 47.2
Depreciation and
amortization 5,998 4.0 6,455 4.5
------- ---- ------- ----
Restaurant costs and
expenses 118,931 79.9 124,062 86.3
------- ---- ------- ----
Restaurant operating income 29,877 20.1 19,691 13.7
General and administrative
expenses 9,246 6.2 9,158 6.4
Non-cash stock option
compensation 26,197 17.6
------- ---- ------- ----
Earnings(loss) from operations (5,566) (3.7) 10,533 7.3
Other income 383 0.2 1,699 1.2
------- ---- ------- ----
Earnings(loss) before
income taxes (5,183) (3.5) 12,232 8.5
Provision(benefit) for
income taxes (1,675) (1.1) 3,992 2.8
------- ---- ------- ----
Earnings (loss) before change
in accounting (3,508) (2.4) 8,240 5.7
Cumulative effect of change
in accounting (318) (0.2)
------- ---- ------- ----
Net earnings(loss) $(3,826) (2.6) $ 8,240 5.7
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Basic earnings(loss)
per share $(0.16) $0.34
======= =======
Diluted earnings(loss)
per share $(0.14) $0.34
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Average shares outstanding
- Basic 24,198 24,033
Average shares outstanding
- Diluted 26,664 24,435
Restaurants included at
end of period 295 290
Comparable sales growth 0.6% 2.3%
Analysis of components of net earnings (loss)
and basic per share amounts
For the first quarter ended
Mar. 19, 2002 Mar. 20, 2001
12 Weeks 12 Weeks
Per Per
$ Amt. Share $ Amt. Share
-------- ------ -------- ------
Net earnings excluding
unusual charges $ 12,868 $ 0.53 $ 7,342 $ 0.30
Non-cash stock option
compensation
- net of tax (16,373) $(0.68)
Cumulative effect of
change in accounting
- net of tax (318) $(0.01)
Gain(loss) on sale of
assets - net of tax (3) 898 0.04
-------- ------ -------- ------
Net earnings(loss) $ (3,826) $(0.16) $ 8,240 $ 0.34
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