Financial Overview December 2006
Increase in Profits
IRVING, Texas—CEC ENTERTAINMENT INC. parent of the 524-unit Chuck E. Cheese's brand. said Oct. 31 its review of historical stock option granting practices resulted in errors that may total up to $35 million in additional pre-tax charges for the operator or franchisor of 523 CHUCK E. CHEESE'S restaurants. Citing “administrative errors, record-keeping deficiencies and other defects,” CEC said the aggregate financial impact of additional stock-based compensation expense it would have to record is between $10 million and $35 million. The company reviewed its stock option granting practices from 1989 until 2005, the latest year the company made option grants. CEC said it shared its findings with the SECURITIES & EXCHANGE COMMISSION, which started an informal inquiry into the company's option granting practices in August. CEC explained that “in the majority of instances” the market price of the company's common stock on the option measurement date, or date of written consent used for accounting purposes, was higher than the exercise price of the stock option. The company also said its independent review board and outside counsel found “no evidence of fraud or intentional misconduct in its stock option granting practices and that” there were no concerns about director or management integrity. Also Tuesday, CEC reported preliminary third-quarter profit of $17.5 million, or 54 cents per share, up from profit of $14.9 million, or 41 cents a share, in the year-earlier third quarter. Revenues for the quarter ended Oct. 1 rose 8.4 percent to $194.7 million and same-store sales increased 5 percent.
November 13, CEC, said it will restate some financial reports to correct accounting errors related to stock-based compensation, and that investors therefore “should not rely on the company's historical financial statements.’ CEC said currently estimated that the pre-tax impact of recording addition charges for option grants from 1989 through 2005 likely will range from $20 million to $30 million. CEC said it was working to file belated earnings reports for the second quarter ended July 2, the third quarter ended Oct. 1 and other unspecified amended reports.
LEBANON, Tenn.—CBRL GROUP INC. reported a 1.9-percent increase in same-store restaurant sales at its 548-unit Cracker Barrel Old Country Store chain for the five weeks ended Oct. 27. Same-store retail sales at Cracker Barrel rose 5.9 percent from a year earlier. Same-store sales for the company's 169-unit Logan's Roadhouse concept, which it agreed on Monday to sell for $486 million to a group of private equity firms, were down 0.8 percent in fiscal October from the same period a year ago. The Logan's sale, which is still subject to closing conditions, is expected to be concluded by Nov. 30.
PORTLAND, Ore.—MCCORMICK & SCHMICK'S SEAFOOD RESTAURANTS INC. agreed to acquire a fiveunit restaurant group, THE BOATHOUSE, for $14.3 million. The buyer also said co-founder, president and chairman DOUG SCHMICK will succeed SAED MOHSENI as M&S's chief executive in January. It was unclear whether Schmick would be CEO on a permanent or temporary basis. The Boathouse, owned by the Vancouver, British Columbia-based SPECTRA GROUP of GREAT RESTAURANTS INC., generated $18.7 million in revenues from its waterfront restaurants for the 12 months ended July 23, McCormick & Schmick's said. The buyer, which operates 63 upscale restaurants under several names, said the transaction is expected to close in the first quarter of fiscal 2007. McCormick & Schmick's reported a 32.8-percent year-overyear increase in third-quarter net income to $2.7 million on an 11.2-percent rise in revenues to $75.6 million.
MIAMI—BURGER KING HOLDINGS INC., operator or franchisor of more than 11,000 BK restaurants, reported an 81.8- percent increase in first-quarter net income over year-earlier results. The Miami company attributed the jump to a 2.4-percent worldwide increase in same-store sales, the opening of new restaurants and improved unit-level margins. For fiscal 2007's first quarter, ended Sept. 30, Burger King earned $40 million, or 30 cents per share, versus $22 million, or 19 cents a share, a year earlier. Corporate revenues rose 7.5 percent to $546 million. Same-store sales in North America rose 2.6 percent.
DENVER—CHIPOTLE MEXICAN GRILL INC. more than doubled its third-quarter profit, versus year-earlier results, to $11.8 million on revenues that rose 28.3 percent to $211.3 million. The operator of 539 namesake restaurants and franchisor of an additional eight units earned 36 cents per share for the three months ended Sept. 30, up from 19 cents a share in last year's quarter, when net profit was $5.1 million. The company, which was divested by McDonald's Corp. during the third quarter, said revenues were driven by an 11.6-percent jump in samestore sales at the company's Chipotle units open more than 13 months. The chain added 30 restaurants during the quarter.
LOUISVILLE, Ky.—PAPA JOHN'S INTERNATIONAL INC. recorded a 21.2-percent increase in third-qu arter net income on one-time charges and a revenue gain of 2.8 percent to $239.7 million. For the three months ended Sept. 24, the company earned $13.1 million, or 40 cents per share, versus year earlier earnings of $10.8 million, or 31 cents a share. Papa John's, which operates or franchises 2,986 Papa John's Pizza restaurants, said its latest quarter included a gain of 9 cents a share, versus 6 cents a share last year, for the consolidation of the franchisee-owned cheese purchasing outfit BIBP COMMODITIES INC. In addition, Papa John's gained 3 cents a share in its latest quarter from a favorable tax ruling, it said. Domestic systemwide same-store sales increased 4.5 percent for the quarter, but fell 1.8 percent for the four weeks ended Oct. 22.
Later in the month they said domestic systemwide samestore sales for the four weeks ended Nov. 19 fell 0.3 percent from a year earlier, reflecting a same-store sales gain of 0.6 percent at corporate outlets and a 0.6-percent decline at franchised units.
ATLANTA—AFC ENTERPRISES INC., franchisor or operator of 1,845 POPEYES CHICKEN & BISCUITS restaurants, posted third-quarter net income of $5.9 million, or 20 cents per share, versus year-earlier profit of $100,000, or 0 cents a share. Revenues for the Oct. 1-ended quarter rose 15.4 percent to $36 million, and domestic same-store sales increased 0.2 percent.
AUSTIN, Texas—CHUY'S COMIDA DELUXE INC., an eight-unit Tex-Mex casual-dining chain based here, said Tuesday that it had received an infusion of growth capital from GOODE PARTNERS LLC, a private-equity firm in New York. Terms were not disclosed. Chuy's said it also received expansion funding from WELLS FARGO FOOTHILL and HBK INVEST- MENTS. Chuy's, which now has locations in Austin, Houston, Dallas and San Antonio, plans to open its ninth unit next year, in Austin. The chain was founded in 1982 by MIKE YOUNG and JOHN ZAPP. Goode Partners said it invests exclusively in consumer- focused fields, including restaurants and retail stores.
CHICAGO—A private-equity fund led by a former Chi-Chi's executive has acquired the nine-unit STIR CRAZY INC. casual- dining chain from founder GARY LEFF for $25 million, according to a published report. The buyer, Cincinnati-based THE WALNUT GROUP, reportedly plans to expand the stir-fry chain to 50 units within five years. The fund is led by FEDERIC MAYERSON, a former chairman of the now-defunct Chi-Chi's.
IRVINE, Calif.—EL POLLO LOCO, triggering its plan to grow the 350-unit grilled-chicken chain into Eastern states, has inked several multi-unit deals for 61 new outlets in Georgia, Missouri, Arizona, Virginia and Utah. Separately, NEEPL LLC is slated to open the first Connecticut El Pollo Loco this month, to be followed by several more in New England. The Irvinebased chain, which has 201 franchised branches, currently operates in six states as far east as Illinois. The largest of the new franchise deals is a 25-unit, seven-year pact for Atlanta with FIESTA BRANDS INC., headed by CHRIS ELLIOTT, formerly president of Cinnabon and COO of Church's Chicken.
DUBLIN, Ohio—WENDY'S INTERNATIONAL, operator or franchisor of more than 6,600 burger units, posted same-store sales increases of 1.8 percent for its U.S.-based restaurants and 0.8 percent for domestic franchise for fiscal October ended Nov. 5s, versus yearearlier results. Wendy's promoted its 99-cent Junior Bacon Cheeseburger and Crispy Chicken Sandwich during the month, yielding a significantly greater positive impact on the average check than did the Bacon Mushroom Melt promotion a year earlier. Additionally Wendy's said shareholders tendered a total of 22.4 million shares under its recent Dutch auction for purchase by the company at $35.75 per share, or a total of $801.3 million. The number of shares the chain accepted for purchase represents about 19 percent of its outstanding common shares. The Dutch auction tender offer commenced Oct. 18 and concluded Nov. 16. They also completed the previously reported sale of 300-unit BAJA FRESH MEXICAN GRILL for $31 million to CALIBER CAPITAL GROUP LLC. Anaheim, Calif.-based Caliber is an investment consortium led by DAVID KIM, a West Coast franchisee of Denny's and Cinnabon. He also is affiliated with the Sweet Factory candy shop concept and KaBloom, a franchised flower delivery service. His company operates 400 locations of the various brands and employs more than 3,000 people. Wendy's paid $275 million for Thousand Oaks, Calif.-based Baja Fresh in 2002.
NEW YORK—The industry's wave of stock buybacks continued as WENDY'S INTERNATIONAL INC. and RARE HOSPITALITY INTERNATIONAL INC. followed APPLEBEE'S INTERNATIONAL INC. in detailing plans for large share repurchases. Dublin, Ohio-based Wendy's it expects to buy back 22.4 million shares, or about 19 percent of its outstanding shares, for a total of $800 million, or $35.75 per share, under a previously announced Dutch auction tender offer. The auction was oversubscribed, Wendy's said; it had originally offered to buy up to 22.2 million shares at a pershare price of $33 to $36. A total of 27.9 million shares were tendered. Atlanta-based Rare said its underwriters had priced a private offering of $110 million in senior notes to fund a purchase of about 1.8 million shares of Rare's common stock for $61 million, or $33.49 per share. The company, which operates or franchises 269 LongHorn Steakhouses, 26 Capital Grilles and 32 Bugaboo Creek Steak Houses, said other proceeds would be used to repurchase additional company shares “from time to time. The stock buyback is part of Rare's previously announced restructuring, which includes the sale of Bugaboo Creek and the borrowing of $125 million. Applebee's said it had upped its share repurchase program by an additional $150 million, bringing the company's total authorization to $251 million. Overland Park, Kan.-based Applebee's, which operates or franchises 1,892 of the restaurants, said it would “take on additional leverage” to support the share repurchases and obtain a new credit facility in the next 45 days.
NEW YORK—Activist investor WILLIAM ACKMAN disclosed in a regulatory filing that he had liquidated almost his entire 5.4-percent stake in WENDY'S INTERNATIONAL INC., two months after it spun off its TIM HORTONS chain, a move he had pushed for when he was Wendy's second-largest shareholder. Ackman's PERSHING SQUARE LP, a New York-based hedge fund, reported that it cut its holding in Dublin, Ohio-based Wendy's to 5,000 shares as of Nov. 21, a number that also reflects Wendy's buyback of 22.4 million shares for $801.3 million completed just days before. Pershing held about 6.4 million shares of Wendy's at the end of September.
BOSTON—AU BON PAIN, the 255-unit bakery-cafe chain based here, said ABPTHAILAND, a franchisee of the brand for nine years, plans to expand the chain s Thai presence to 100 units during the next five years. ABPThailand plans to open three to six new locations in 2007. Au Bon Pain also signed a franchise agreement with THE SULTAN CENTER, a publicly traded company in Kuwait that operates restaurants, convenience stores and 10 major retail outlets. Sultan said it expects to open 100 Au Bon Pain units over the next 10 years in the Middle East and North Africa. Au Bon Pain also is planning to expand its new suburban concept, THE BISTRO BYAU BON PAIN, in U.S. market areas.
ST. LOUIS—PANERA BREAD CO. has agreed to pay $21.1 million for 51 percent of PARADISE BAKERY & CAFE INC., operator or franchisor of 44 bakery-cafe outlets. Panera is expected to operate Paradise under that name as a separate brand. Paradise, based in Scottsdale, Ariz., owns and operates 24 bakery- cafes, including 17 in the Phoenix market. Its franchisees have 20 locations on the West Coast and in the Southwest and a handful in Indiana and Massachusetts. An additional 14 units are slated to open later this year or next year, according to the chain s website. The deal is expected to close by year-end or early next year, Panera said. Securities analyst ROBERT M. DERRINGTON of MORGAN KEEGAN & CO. in Nashville, Tenn., said Paradise “offers Panera a second strong concept for development in the underpenetrated Southwest.” The two brands “overlap operationally and culturally,” he added. A point of differentiation is that many of Paradise“s outlets are food court units in shopping malls, though the chain also has airport, office building and freestanding street locations. Currently, there are about 976 corporate or franchised Panera Bread bakery-cafes. Panera said it has the right to purchase the remaining 49 percent of Paradise“s common stock after January 1, 2009, at “a contractually determined value,” that was not disclosed. If Panera does not take that option, Paradise's minority owners can buy back the company, Panera said. The purchase will result in one-time charges totaling 4 cents to 5 cents per share, Panera indicated.
RALEIGH, N.C.—CLIF BULLARD, whose BULLARD RESTAURANT GROUP here owns 27 Burger King and Smithfield“s Chicken“n Barbecue outlets, has inked a deal to open 12 FRIENDLY“S restaurants during the next seven years in eastern North Carolina. Currently dominant in the Northeast and Middle Atlantic regions, 520-unit Friendly“s now has 29 franchised outlets in the Southeast—16 in Florida, eight in Virginia, four in South Carolina and one in North Carolina, near Charlotte. There are a total of 210 franchised Friendly“s, whose westernmost markets are Ohio and Pennsylvania.
HOUSTON—LANDRY'S RESTAURANTS INC. posted a third-quarter net loss of $30 million, or $1.36 per share, versus a profit of $16 million, or 73 cents a share, one year earlier, mostly on charges from the sale of 120 Joe's Crab Shack restaurants and the closure or conversion of 23 other Joe's locations. Landry's revenues for the Sept. 30-ended quarter rose 31.5 percent to $290.4 million. Blended same-store sales grew about 1 percent for the 200-unit company's portfolio, which includes the Landry's Seafood House, Chart House, Rainforest Cafe and Saltgrass Steak House brands. Landry's, which also owns hotels, marinas, retail sites and the Golden Nugget hotel-casinos, for the quarter logged a loss from the discontinued Joe's Crab Shack operation of $33.3 million, or $1.51 a share. Landry's last month agreed to sell the chain for about $192 million. Excluding the impairment charges for Joe's and other charges, including for stock-based compensation expense, Landry's quarterly per-share earnings from continuing operations totaled 46 cents, compared with 42 cents in last year's third quarter.
LOS ANGELES—CALIFORNIA PIZZA KITCHEN INC. posted a 20-percent jump in third-quarter net profit to $6.7 million, or 34 cents a share, on revenues that rose 14.7 percent to $142.8 million. The top-line boost was aided by a 5.6-percent increase in same-store sales for the three months ended Oct 1. CPK, which operates, franchises or licenses about 215 restaurants, including the 190-unit namesake chain, about 24 fastcasual California Pizza Kitchen ASAP outlets and one L.A. Food Show restaurant, said it expects to earn between 13 cents and 15 cents per share for the current fourth quarter, down from its original projection of 25 cents to 27 cents.
SEATTLE—STARBUCKS CORP., operator or licensor of 12,440 Starbucks Coffee units, reported a 5.2-percent dip in fourth-quarter profit to $117.3 million, on a 20.7-percent jump in revenues to $2 billion. For the full year ended Oct. 1 Starbucks earned $564.3 million, up 14.1 percent from fiscal 2005, yielding per-share earnings of 71 cents, up 10 cents from the prior year. Annual revenues rose 22.3 percent to $7.79 billion.
SAN RAMON, Calif.—STRATEGIC RESTAURANT ACQUISITIONS CORP., a 250-unit Burger King franchisee based here, has acquired an unspecified stake in the 33-unit BEAR ROCK CAFE fast-casual chain, headquartered in Cary, N.C. The investment will enable Bear Rock, which now operates in 11 states, to accelerate its development, SRAC chief executive JERRY COMSTOCK indicated. The mountain-lodge-theme Bear Rock was founded in 1997 by president and CEO Gary Bryant.
SCOTTSDALE, Ariz.—STAR BUFFET INC., franchise operator of 34 restaurants under such brands as HomeTown Buffet, K-Bob's Steakhouse and Western Sizzlin, completed the acquisition of five WHISTLE JUNCTION buffet outlets in Florida from BANNER BUFFETS LLC. The units are in Daytona Beach, Melbourne, Titusville, St. Cloud and Lakeland.
SAN DIEGO—JACK IN THE BOX INC.'s fourth-quarter profit jumped 54 percent to $33.2 million, or 92 cents per share, on a 25-centsper- share gain from the sale of 25 Jack in the Box units and a revenue increase of 11.9 percent to $670.7 million. The company also commenced Nov. 21 a modified Dutch auction tender for up to 5.5 million shares of its common stock at a per-share price between $55 and $61, for a total of $335.5 million. The tender offer is expected to expire on Dec. 19 at midnight EST and will reduce the number of outstanding shares by 15.5 percent. Jack in the Box, which operates or franchises 2,079 namesake units, including 55 co-located with its Quick Stuff convenience- store concept, and 318 Qdoba Mexican Grill restaurants, said it would fund the share repurchase with available cash and a new credit facility expected to close before the closing of the tender offer. For the company's fourth quarter ended Oct. 1, same-store sales at Jack in the Box corporate units increased 5.9 percent. Systemwide same-store sales at Qdoba increased 4.5 percent. For the full fiscal year, Jack in the Box earned $108 million, or $3.01 a share, versus earnings of $91.5 million, or $2.48 a share, a year earlier. Revenues for the latest year rose 10.5 percent to $2.8 billion. Same-store sales increased 4.8 percent at Jack in the Box corporate units, and 5.9 percent at Qdoba restaurants.
Decrease in Profits
CALABASAS HILLS, Calif.—The CHEESECAKE FACTORY INC. reported its delayed second- and third-quarter financial results Thursday, posting nearly flat profit from a year earlier for the 13-weeks ended July 4 and a 16.5-percent decline in profit for the 13 weeks ended Oct. 3. Systemwide same-store sales declined in both quarters. For the second quarter, Cheesecake Factory earned $23.4 million, or 30 cents per share, versus $23.2 million, or 30 cents per share, a year earlier. Revenues rose 11.8 percent to $322.6 million, despite a samestore sales decline of 0.8 percent, which reflected a dip of 1.2 percent at Cheesecake Factory and a gain of 5.5 percent at sibling chain Grand Lux Cafe. Third-quarter earnings were $18.1 million, or 23 cents a share, versus $21.7 million, or 28 cents a share, a year earlier. Revenues rose 10.7 percent to $325.3 million, but same-store sales fell 1.6 percent, which reflected a decline of 2.1 percent at Cheesecake Factory and a gain of 6.7 percent at Grand Lux Cafe. The company owns 118 namesake units, eight Grand Lux restaurant and one Cheesecake Factory Express. The filings had been delayed by an internal review of stock option granting practices that found accounting errors and required restatements.
WINSTON-SALEM, N.C.—KRISPY KREME DOUGHNUTS INC. said it has agreed to settle a securities class action lawsuit against the doughnut chain for about $75 million in cash, stock and warrants. In exchange, all claims against the defendants would be dismissed, except for those against former chairman and chief executive SCOTT A. LIVENGOOD. Krispy Kreme said it “expressly preserved” its right to press claims against Livengood in a derivative or corporate-led action for a possible contribution to the settlement payment. Livengood worked for Krispy Kreme for 28 years and led the company from 1998 until his ouster in January 2005 amid financial losses, federal investigations into the company's accounting practices, and lawsuits like the class action suit, which alleged dishonest sales inflation and a lack of fiduciary duty by company executives. The company also reported Tuesday a net loss of $135.8 million for its fiscal year 2006 ended Jan. 29, on revenues of $543.4 million, versus a year-earlier loss of $198.3 million, on revenues of $707.8 million. The company s 23.2-percent decline in revenues was attributed to the closure of 47 restaurants during the year and a decline of 15.4 percent in average weekly sales per unit.
CHICAGO—Four restaurants in the Sears Tower here lost about $1.1 million in revenues during seven months of operation by foodservice contractor SODEXHO USA, owners of the nation's tallest skyscraper allege in a lawsuit filed Oct. 13 in Cook County Circuit Court here. Skokie, Ill.-based AMERICAN LANDMARK PROPERTIES LTD. and New York-based realestate investors JOSEPH CHETRIT and JOSEPH MOINIAN are seeking to recover operating losses and other damages. They accuse Gaithersburg, Md.-based Sodexho of poor management that allegedly resulted in frequent long delays, unclean restaurants and ‚institutional-quality food at prices that were significantly higher” than competitors' prices. “Sodexho denies the material allegations of breach in the complaint and we expect to file a counter-claim,” a spokeswoman said. “We were very disappointed that we were unable to resolve the contract issues in a mutually agreeable fashion.” Sodexho took over foodservice operations at the 110-story building in February from the Levy Restaurants arm of Charlotte, N.C.-based Compass Group. According to published reports, Sodexho predicted a first-year operating loss of $26,000, but revised that to nearly $700,000 after a rough transition, then raised the projection by another $400,000. Sodexho's contract reportedly states that losses are to be borne by the landlord.
WICHITA, Kan.—LONE STAR STEAK HOUSE & SALOON INC. in a letter to shareholders Tuesday, urged them to approve its pending $613.7-million buyout because, among other reasons, conditions within the casual-dining sector will likely continue to depress the company's financial results. The letter from chairman FRED CHANEY also asserted that the $27.10-pershare bid from Dallas-based LONE STAR FUNDS is 12 times the company's trailing-12-month earnings before interest, taxes, depreciation and amortization. The company's real estate assets “are worth significantly less” than the $400 million that some opponents of the deal have estimated, Lone Star Steakhouse said, especially since its recent financial results included a 9.4-percent decline in third-quarter same-store sales at the flagship Lone Star steakhouse chain, which represent the majority of the company's real estate. Lone Star is operator or franchisor of 278 restaurants, including the TEXAS LAND & CATTLE CO., DEL FRISCO S DOUBLE EAGLE STEAK HOUSE and SULLIVAN'S STEAKHOUSE brands. The letter was sent four business days after a Nov. 1 filing by investors holding a 9.5-percent Lone Star stake, led by New York-based BARINGTON COS. EQUITY PARTNERS, that said they would vote Nov. 30 against the buyout, asserting that the $27.10-per-share offer was too low and the sale process was not thorough. Lone Star said its letter was “in response to various articles and misinformation in the public domain.”
EMERYVILLE, Calif.—PEET'S COFFEE & TEA INC. initiated a voluntary internal investigation into its history of stock option granting practices, the company said Tuesday, as it reported preliminary third-quarter results that included a 37-percent decline in profit on an 18.7-percent revenue gain. While the option granting review is ongoing, Peet s said it would most likely need to restate prior financial statements to record additional non-cash, stock-based compensation expense. The operator of more than 120 namesake coffeehouses and a wholesale coffee distribution business said its board of directors had created a review committee Oct. 20 to audit past stock option granting practices, including those prior to the company's initial public stock offering in January 2001. It also had contacted the U.S. SECURITIES AND EXCHANGE COMMISSION to inform it about the ongoing review, Peet s said. On a preliminary basis, the company earned $1.4 million, or 10 cents per share, on revenues of $50.9 million, for the quarter ended Oct. 1. In the previous third quarter Peet s earned $2.2 million on revenues of $42.8 million.
DEERFIELD, Ill.—COSI INC., operator or franchisor of 118 fast-casual Cosi units, posted a third-quarter net loss of $2.9 million, or 7 cents per share, up from last year's deficit for the quarter of $2.4 million, or 6 cents a share. However, revenue rose 7 percent to $32.9 million, spurred by the opening of eight new restaurants during the quarter and increased franchise fees and royalties that offset a 4.2-percent decline in same-store sales. Cosi said cost discipline and continued increases in sales would help it achieve a goal of limiting its full-year loss to 9 cents to 11 cents per share, excluding stock-based compensation expense.
WILBRAHAM, Mass.—FRIENDLY ICE CREAM CORP. reported a 42.1-percent drop in third-quarter income to $2 million on a 0.5-percent rise in revenues to $141.9 million, compared with year-earlier results. Same-store sales for the latest quarter, ended Oct. 1, increased 1.7 percent at the ice cream specialty family-dining chain s nearly 300 corporate units but dipped 1.7 percent at its approximately 200 franchised outlets.
DALLAS—EATZI'S LLC on Thursday closed branches of the Eatzi's Market & Bakery concept in Atlanta, Chicago, Houston and Rockville, Md., leaving only the original Dallas outlet of the gourmet grocery and prepared-meals-to-go concept. Questions to the flagship Eatzi's were referred to corporate officials, who could not be reached for comment. PHIL ROMANO, who created the concept with Brinker International 10 years ago and reportedly maintained a 15-percent interest in Eatzivs LLC, indicated that he may be interested in buying the Dallas location.
IRVINE, Calif.—EL POLLO LOCO HOLDINGS INC., operator or franchisor of 350 grilled-chicken restaurants, said third-quarter net income plunged 74.7 percent from a year earlier mostly on a 52.6-percent increase in interest expense related to added debt from its acquisition by TRIMARAN CAPITAL PARTNERS. For the quarter ended Sept. 30, El Pollo Loco earned $532,000 versus $2.1 million a year earlier. Revenues for the latest quarter rose 7.7 percent to $66.3 million and systemwide same-store sales increased 3.8 percent. El Pollo Loco, triggering its plan to grow the 350-unit grilled-chicken chain into Eastern states, has inked several multi-unit deals for 61 new outlets in Georgia, Missouri, Arizona, Virginia and Utah. Separately, NEEPL LLC is slated to open the first Connecticut El Pollo Loco this month, to be followed by several more in New England. The Irvinebased chain, which has 201 franchised branches, currently operates in six states as far east as Illinois. The largest of the new franchise deals is a 25-unit, seven-year pact for Atlanta with FIESTA BRANDS INC., headed by CHRIS ELLIOTT, formerly president of Cinnabon and COO of Church's Chicken.
INDIANAPOLIS—THE STEAK N SHAKE CO. said fourth-quarter profit fell 13.4 percent to $7.5 million, or 27 cents per share, despite a 4.3-percent rise in revenues to $152 million. Same-store sales for the quarter ended Sept. 27 fell 3.4 percent. For the full year, Steak n Shake earned $28 million, or $1 per share, on revenues of $638.8 million. In fiscal 2005, the company earned $30.2 million, or $1.08 a share, on revenues of $606.9 million. There are 477 Steak n Shake restaurants.
LEBANON, Tenn.—CBRL GROUP INC. reported a 24.5-percent drop in its fiscal 2007 first-quarter profit versus the same quarter a year earlier. The company's net income dropped to $19.4 million for the quarter ended Oct. 27, from $25.7 million in the prior-year quarter. CBRL s latest-quarter interest expense from its $1.25 billion recapitalization totaled in March $15.2 million, up from just $2.5 million a year ago. Yet, the recapitalization helped fund an $800 million share repurchase that resulted in larger per-share earnings for the latest quarter by reducing the number of outstanding shares. Per-share earnings totaled 57 cents for the first quarter, up from 51 cents in the year-earlier quarter. Total revenues for CBRL, which operates 550 Cracker Barrel Old Country Stores, rose 4.3 percent to $558.3 million. Same-store restaurant sales for Cracker Barrel increased 1.4 percent. CBRL also operates or franchises 169 Logan s Roadhouse restaurants, which it agreed to sell in October to a private equity group for about $486 million.
OVERLAND PARK, Kan.—APPLEBEE'S INTERNATIONAL INC., which along with its franchisees operates the industry's largest casual-dining chain, on Monday reported a 3.1- percent year-to-year decline in U.S. same-store sales for the four weeks ended Nov. 19, including a 3.0-percent decrease at domestic franchised Applebee's Neighborhood Grill & Bar branches and a 3.1-percent dip at corporate restaurants. Applebee's said its outlets saw guest traffic for the month decrease between 3 percent and 3.5 percent while the average check remained flat. For the first eight weeks of the fourth quarter, through Nov. 19, U.S. systemwide same-store sales fell 2.1 percent. The chain has 1,911 restaurants in 49 states and 17 foreign countries. Separately, Applebee's introduced three steak and seafood entrees in a Holiday Flavor promotion, including Seared Ribeye with Garlic Chili Shrimp by celebrity chef TYLER FLORENCE. Also available through Jan. 7 are Sicilian Sirloin & Crab-Topped Shrimp, a Mixed Seafood Grill and Sirloin & Grilled Shrimp Skewers.