Financial Overview — June 2008
CBRL Group, Inc. ('CBRL') (Nasdaq: CBRL) today reported comparable store sales for its Cracker Barrel Old Country Store(R) restaurants and gift shops for the four-week period ending Friday, May 30, 2008. The sales are compared with the four-week period ending June 1, 2007, not the prior-year fiscal period. Comparable store restaurant sales were flat, including the effect of an approximately 3.5% higher average check that resulted primarily from an average menu price increase of approximately 3.7%. comparable store retail sales were up 2.3%. Year-to-date fiscal 2008 comparable store restaurant sales increased 0.9%, which included the effect of an approximately 3.3% higher average check. Comparable store retail sales were down 0.4%. Headquartered in Lebanon, Tennessee, CBRL Group, Inc. presently operates 576 Cracker Barrel Old Country Store restaurants and gift shops located in 41 states.- THE COLONY, Texas — PIZZA INN INC., parent of the 300-unit namesake chain, said Monday that its board had authorized the repurchase of an additional 1 million shares as part of a buyback plan announced last year. The decision brings the repurchase authorization to more than 2 million shares, the company said. There are about 9.5 million Pizza Inn shares outstanding. The stock has traded between $2.04 to $3.37 per share over the past 52 weeks. On word of the buyback, Pizza Inn’s share price rose in trading Monday, closing up 6 cents for the day. MARK SCHWARZ, the company’s chairman, said, “The increase in the repurchase program reflects our strong confidence in the future of the Pizza Inn brand and its strong franchise system.”
- AFC Enterprises, Inc. (NASDAQ:AFCE) , the franchisor and operator of Popeyes(R) restaurants, today reported results for its fiscal first quarter which ended April 20, 2008.
First Quarter 2008 Highlights compared to First Quarter 2007. Net income was $6.4 million, or $0.24 per diluted share, compared to $6.4 million, or $0.22 per diluted share, last year. Excluding the pre-tax impact of $1.3 million from other non-operating income, net income would have been $5.6 million, or $0.21 per diluted share.
Total system-wide sales increased by 1.5 percent compared to 1.7 percent last year.
Total domestic same-store sales decreased 1.8 percent compared to a decrease of 3.4 percent last year. International same-store sales increased 3.5 percent compared to an increase of 0.2 percent last year. Total global same-store sales decreased 1.3 percent compared to a decrease of 3.1 percent last year.
The Popeyes system opened 37 and closed 32 restaurants, bringing total net unit count to 1,889 compared to 1,876 last year.
The Company repurchased 2.1 million shares of common stock for $16.6 million. During the quarter, the Company entered into a $15 million accelerated stock repurchase program to take advantage of market conditions, and retired 2.0 million shares of common stock pursuant to this program.
The Company took advantage of lower interest rates and fixed the interest rate on $100 million of floating rate debt at a rate of 4.87 percent beginning June 30, 2008.
- Red Robin Gourmet Burgers, Inc. Board of Directors Reaffirms Intent to Repurchase up to $50 million of Common Stock. Red Robin Gourmet Burgers, Inc., (NASDAQ: RRGB), a casual dining restaurant chain focused on serving an innovative selection of high-quality gourmet burgers in a family-friendly atmosphere, announced that during the board of directors meeting on May 28, 2008, the board reaffirmed its intent, as previously announced in a press release dated August 16, 2007, to repurchase up to $50 million of the Company's common stock.
Stock repurchases may be made from time to time in open market transactions and through privately negotiated transactions. The timing and extent to which the Company repurchases its shares will depend upon market conditions and other corporate considerations as may be considered in the Company's sole discretion.
The Company currently has approximately 16.8 million shares of common stock outstanding. On May 28, 2008, the Company's stock closed at $33.26 per share. 
TAMPA, Fla. — SHELLS SEAFOOD RESTAURANTS INC. has been granted a one-year extension on an outstanding $1.44 million loan in exchange for $100,800 in the its stock, the company disclosed Wednesday. The extension was granted by TRINAD CAPITAL LP of Los Angeles and FREDRICK R. ADLER and BRUCE GALLOWAY IRA of New York. The 775,385 shares that constitutes the $100,800 fee was based on the May 20 closing price of the company’s stock, which was 13 cents a share. Shells’ stock closed at 10 cents a share on Thursday. The 23-unit casual-dining chain posted a 20.4-percent decline in firstquarter revenue and a 15.6-percent drop in same-store sales.- ANN ARBOR, Mich. — One of DOMINO’S PIZZA INC.’s largest institutional stockholders raised its ownership stake to 6.2 percent of the company’s outstanding shares, according to a regulatory filing Tuesday. EAST PEAK PARTNERS LP, which is managed by JGE CAPITAL MANAGEMENT LLC, now holds 3.6 million shares of Domino’s 58.3 million outstanding shares. In February, the San Francisco-based asset manager had acquired 3.1 million Domino’s shares, or about 5.2 percent of its common stock. The current investment is valued at more than $47 million. East Peak made no activist overtures in its latest filing. According to the investor’s prior annual holdings reports, Domino’s is Eat Peak’s first foodservice investment. In trading Tuesday, Domino’s stock rose nearly 2 percent to close at $12.98 a share. The company and its franchisees operate 8,641 Domino’s outlets worldwide.
- TORONTO — STARBUCKS’ Canadian division has agreed to buy the assets and development rights from two licensees in a transaction that will bring about 40 locations under corporate ownership. The Canadian licensees, COFFEE VISION INC. and COFFEE VISION ATLANTIC INC., operate stores in Quebec and the Atlantic provinces of Canada. Their more than 740 workers will become STARBUCKS COFFEE CANADA employees as part of the deal, which is scheduled to close in August, the company said. As of March 30, there were 900 company-owned and licensed Starbucks Coffee locations in Canada.
- GLENDALE, Calif. — IHOP CORP. will sell and leaseback the properties of 187 corporate APPLEBEE’S units to garner proceeds of $347 million before taxes, the company said Tuesday. IHOP said the proceeds would be used to pay down debt. The total price reflects an average location value of $1.86 million. The buying group includes Drawbridge Special Opportunities Fund LP and Drawbridge Real Assets Fund LP, which are affiliates of Fortress Investment Group, a New York-based asset manager. The deal is expected to close June 16. When IHOP acquired Lenexa, Kan.-based Applebee’s last year, it said it planned to seek saleleaseback deals on corporate real estate and to refranchise most of the casual-dining chain’s 510 corporate units. IHOP said that the deal announced on Tuesday allows it to transfer the property leases to franchisees after a sale has been completed. IHOP, based here, operates or franchises 1,353 namesake family-dining restaurants and 1,986 Applebee’s locations.
- Red Robin Gourmet Burgers Reports Earnings for the Fiscal First Quarter 2008. Completes Acquisition of 15 Existing Franchised Red Robin Restaurants and Increases Earnings Guidance for Fiscal Year 2008 Red Robin Gourmet Burgers, Inc., (NASDAQ: RRGB), a casual dining restaurant chain focused on serving an innovative selection of high-quality gourmet burgers in a family-friendly atmosphere, today reported financial results for the sixteen weeks ended April 20, 2008.
Financial and Operational Highlights
Highlights for the sixteen weeks ended April 20, 2008, compared to the sixteen weeks ended April 22, 2007, are as follows:
• Total revenues increased 20.4% to $255.6 million.
• Restaurant revenue increased 21.2% to $250.9 million.
• Company-owned comparable restaurant sales increased 3.9%.
• Restaurant-level operating profit increased 14.9% to $47.9 million.
• Diluted earnings per share were $0.43 vs. $0.44 in the first quarter a year ago.
- NEW YORK — NEXCEN BRANDS INC., parent of various foodservice brands including MAGGIE MOO’S, MARBLE SLAB and GREAT AMERICAN COOKIES, said Monday that it may not survive as a company should it not increase its liquidity and pay off $21 million in debt by October. NexCen, which went on a foodservice buying spree in recent years, told investors that a liquidity issue not disclosed in its latest annual report raised “substantial doubt about the company’s ability to continue as a going concern.” The company said it would explore all strategic alternatives for its business, including a possible sale of one or more of its portfolio companies or potential “capital market transactions.” NexCen also said it would continue discussions with its lender and take “immediate steps” to reduce operating expenses. The company’s shares plummeted 77 percent during trading on Monday to close at an all-time low of 58 cents per share.
- NEW YORK — STARBUCKS CORP.’s share price climbed on Friday as Wall Street welcomed news that NELSON PELTZ and his related investment funds under TRIAN PARTNERS had amassed a small stake in the ailing coffee giant. The activist investor also upped his stake in THE CHEESECAKE FACTORY INC. to about 4.8 percent of the casual-dining company’s 67 million total shares outstanding, according to filings with federal regulators. Peltz and his affiliates said in a securities filing that the investment in Starbucks amounted to 842,000 shares, or just 0.10 percent of Starbucks’ 728 million shares outstanding. But some investors apparently read the move as a prelude to influencing the direction of Starbucks, as Peltz did with WENDY’S INTERNATIONAL INC. and CBRL GROUP INC., parent of the CRACKER BARREL family-dining chain. In those situations, and others outside the restaurant business, Peltz bought up stock and then used his holdings as leverage to press for major changes. The additional investments in restaurant companies come as TRIARC COS. INC., the Peltz-affiliated company that owns the ARBY’S quick-service brand, is preparing to take over Wendy’s in a stock-swap valued at $2.34 billion.
- The Steak n Shake Company Second Quarter Same Store Sales Declined 6.3%. Total revenues for the fiscal 2008 second quarter decreased 5.8% to $190.5 million compared to $202.2 million in the comparable period last year. During the second quarter, same store sales declined by 6.3% versus a decline of 9.5% in the first quarter. Sales for the quarter were impacted by ongoing deterioration in the consumer economic environment and increased promotional activity throughout the restaurant sector. These challenges were partially offset by the successful execution of a "$2.99 Double Steakburger(TM) & fries" limited-time offer during the month of February.
- SAN DIEGO — JACK IN THE BOX INC. on Wednesday reported a 3-percent drop in its second-quarter profit and cited the same challenges plaguing almost all restaurant companies: higher costs and slowing sales. For the three months ended April 13, net income was $26.4 million, or 44 cents per share, versus $27.2 million, or 40 cents per share, a year earlier. Fewer shares outstanding accounted for the per-share profit increase. The company’s revenue rose 5 percent to $693.5 million, aided by new unit openings its namesake quick-service chain and the fast-casual QDOBA MEXICAN GRILL division. At quarter’s end, there were 2,142 Jack in the Box restaurants, of which 749 were franchised, and 423 Qdobas, 326 of them franchised. Same-store sales fell 0.1 percent at corporate Jack in the Box outlets, compared with the company's expectations of an increase of 1 percent to 2
- NASHVILLE, Tenn. — O’CHARLEY’S INC., operator or franchisor of 364 restaurants under three brands, posted a 34-percent jump in its first-quarter profit as a large income tax benefit and reduced operating costs offset lower sales for the three months ended April 20, O’Charley’s earned $10.7 million, or 49 cents per share, versus $8.0 million, or 33 cents per share, a year earlier. Aiding the net gain was a $6.0 million tax benefit, versus a $2.7 million tax expense in last year’s second quarter. Revenue fell 4.9 percent to $297.5 million, and same-store sales were negative at 240-unit O’Charley’s, 114-unit NINETY NINE RESTAURANT and 10-unit STONEY RIVER LEGENDARY STEAKS. Samestore sales fell 4.7 percent at O’Charley’s corporate units, 3.2 percent at Stoney River, and 2.2 percent at Ninety Nine. The company cut its per-share earnings outlook for the year to between 18 cents and 28 cents, from its previous range of 30 cents to 40 cents.
- CARLSBAD, Calif. — RUBIO’S RESTAURANTS INC., operator or franchisor of 106 Rubio’s Fresh Mexican Grill fast-casual units, posted a net first-quarter loss reflecting increased costs and reduced guest traffic. Rubio’s lost $745,000, or 7 cents per share, versus a year-earlier profit of $196,000, or 2 cents per share. Revenue for the three months ended March 30 rose 2.9 percent to $42.2 million, aided by the opening of seven restaurants so far this year. To cut costs, Rubio’s reduced its corporate support staff by 10 percent last month, it said. Rubio’s took a charge in the first quarter for canceled plans to open four restaurants in Northern California, in areas it said were hurt by the sub-prime lending crisis. That expense, coupled with pay for new senior executives and legal fees, led to an 18.4-percent jump in general and administrative costs. Slowed sales also hurt the chain, with Rubio’s posting a same-store sales drop of 3.3 percent for the quarter.
- ATLANTA — TRIARC COS. INC., brand parent to the 3,694-unit ARBY’S chain and pending acquirer of WENDY’S INTERNATIONAL INC., said first-quarter operating profit at its restaurant division rose 18.4 percent from a year ago on increased sales at corporate locations and positive same-store sales at franchised units. At Arby’s, operating profit for the quarter ended March 30 was $8.1 million, versus $6.8 million a year ago. Total sales at the nearly 1,150 Triarc-owned Arby’s branches rose 5.7 percent to $281.6 million, driven by an acquisition of 50 formerly franchised units. Franchise revenues rose 8.1 percent to $21.3 million. Same-store sales fell 1.6 percent at corporate units but climbed 1.4 percent at franchised Arby’s. Triarc said sales were hurt by a decline in customer traffic, which it blamed on the soft U.S. economy. Triarc’s first-quarter consolidated results took a nose dive on an investment loss of $68.1 million from its sale of asset management division Deerfield and Co. LLC. Triarc’s net loss for the quarter was $67.5 million, or 73 cents per share, versus a year-earlier profit of $7.1 million, or 8 cents per share. Consolidated revenue was $302.9 million, up from $302.0 million in last year’s first quarter.
- HOUSTON — LANDRY’S RESTAURANTS INC. reported a decline of more than 93 percent in first-quarter net income on sharply higher interest expense as same-store sales were flat, versus year-earlier results for the period. Net income for the three months ended March 31 was $1.5 million, or 10 cents a year, versus $22.1 million, or $1.04 a year, in the prior first quarter. The operator of 179 restaurants under such brands as Landry’s Seafood House, Chart House, Rainforest Cafe and Saltgrass Steak House said revenue rose 3.9 percent to $294.8 million as same-store sales were flat for the quarter. Landry’s pre-tax interest expenses for the quarter were $20.8 million, versus $13.6 million a year earlier, because of a refinancing last June for its two Golden Nugget casino-hotels in Nevada and interest rate increases on senior notes that went into effect last August amid bond holder demands on the Houston-based company.
- OAK BROOK, Ill. — MCDONALD’S domestic same-store sales for April rose by 2 percent compared with results for that month last year, capping March’s decline of 0.8 percent as the chain’s only dip in monthly same-store sales for the past five years. The world’s largest restaurant chain attributed the April increase to breakfast sales, new products and “compelling” value. McDonald’s global same-store sales rose 5 percent, with highest regional increase, 7.8 percent, occurring in the chain’s Asia-Pacific/Middle East/Africa region, led by Australia and China. Contributing to that result were local menu promotions and extended hours, the company said. In Europe, same-store sales rose 6.3 percent for April, credited to the rollout of the premium M beef burger in France and Germany and a Monopoly promotion in the United Kingdom.
- LOS ANGELES — Blaming higher food costs, CALIFORNIA PIZZA KITCHEN INC. reported a 30-percent drop in first-quarter profit Thursday, and predicted that the industry had yet to see the “bottom” of the current tough economic times. For the quarter ended March 30, the casual-dining chain reported net income of $2.5 million, or 9 cents per share, compared with $3.6 million, or 12 cents a share, in the year-earlier period. Profit results, however, exceeded projected earnings of 7 cents to 8 cents per share. Revenues for the quarter were up 10.3 percent to $164.7 million. RICK ROSENFIELD and LARRY FLAX, CPK’s co-chief executives, said they believed that consumers would continue to be “under pressure for some time.” New initiatives planned for the rest of the year include a soon-to-be-announced rollout of a summer menu, remodels, marketing programs and technology initiatives to enhance efficiency. CPK operates, licenses or franchises 239 locations, including the namesake brand, the fast-casual California Pizza Kitchen ASAP variants and one LA Food Show restaurant.