Buffets, Inc. Announces Record First Quarter
EDEN PRAIRIE, Minn., May 7 /PRNewswire/ -- Clark C. Grant, Senior Vice President of Finance, Treasurer (Nasdaq: BOCB), reported that the quarter ended April 22, 1998, was the most profitable first quarter in the history of the Company. For the first quarter (16 weeks) 1998, net earnings increased 55% to $9,865,000 from $6,375,000 in 1997. Basic earnings per share increased 57% to $.22 on 45,399,000 shares, compared to $.14 on 45,191,000 shares in 1997. Diluted earnings per share increased 50% to $.21 on 49,572,000 shares, compared to $.14 on 45,440,000 shares in 1997. Restaurant sales for the quarter increased 6.7% to $256,829,000 from $240,741,000 during the same quarter of 1997. Average weekly sales per restaurant increased during the first quarter by 3.0% to $44,386 from $43,089 for the first quarter 1997. Comparable restaurant sales were up by 3.0%. Commenting on the first quarter, Roe H. Hatlen, Buffets' Chairman and CEO, stated, "During the quarter we were able to capitalize on the efforts we made in 1997 to strengthen our Company. For the quarter, on a 2.5% increase in the number of restaurants, we were able to grow sales 6.7% and restaurant profits 40% compared to last year. Put another way, on a $16.1 million increase in sales, our restaurants were able to increase restaurant profits by $9.7 million. Restaurant margins increased from 10% to 13.2%, a very respectable level for the first quarter. "In regards to sales growth, our marketing program continues to drive sales, both through the local store marketing program we rolled out last year and through the television advertising (benefiting 191 restaurants) which we aired in January, March and April. Marketing expenditures for the quarter increased to $4.4 million versus $1.1 million last year and included the cost of four new commercials developed during the quarter. Three of these new commercials began airing at the end of March and have been well received. We were especially pleased that in the final four weeks of the quarter (a period when weather is not normally a disruptive factor) same store sales were up 3.8% compared to 3.0% for the quarter overall. Also affecting our sales during the quarter was El Nino, which positively affected our sales in the Midwest and East (mild winter) and negatively affected our business on the West coast (unseasonably heavy rains). "In regards to development, during the quarter we opened six buffet restaurants, closed two and relocated one. We also refurbished 30 restaurants as part of the program we have in place to keep our restaurants fresh and current. We are pleased that our new buffet restaurants opened during the quarter generated average weekly sales of $66,334, well above our average for the quarter of $44,386. During the quarter we also converted one buffet restaurant to our first Country Roadhouse Buffet & Grill(SM) (as mentioned in our fourth quarter press release). We continue to be pleased with the progress of the Country Roadhouse Buffet & Grill and plan two additional conversions during the balance of the year. We currently plan to open one buffet restaurant in the second quarter and 14 to 16 additional buffet units by year end. In addition, we plan to expand our Original Roadhouse Grills(SM) on the west coast by opening three more units by year end." In conclusion, Mr. Hatlen stated. "Our management teams have done an outstanding job in getting us off to a strong start. We are excited about our future possibilities. Operationally and financially we have the means to continue to grow this Company in a very competitive restaurant environment. We will continue to focus on our existing restaurants and strive to build sales and profits by doing even a better job of taking care of our restaurant staff and the guests they serve." Buffets, Inc. currently operates 364 restaurants (245 Old Country Buffet(R), 113 HomeTown Buffet(R), 4 Original Roadhouse Grill, 1 PIZZAPLAY(SM), 1 Country Roadhouse Buffet & Grill) in 34 states and franchises 24 restaurants (5 Old Country Buffet and 19 HomeTown Buffet) in ten states. This press release contains forward-looking statements, including statements regarding the perceived success of the Company's marketing programs and new restaurant concepts. In addition to the factors discussed above, other factors that could cause actual results to differ materially include changes in the cost and supply of food and labor, weather conditions, health and regulatory developments and general economic conditions. In addition, the ability of the Company to open new restaurants depends on a number of factors, including its ability to find suitable locations and negotiate acceptable leases and land purchases, its ability to attract and retain qualified restaurant managers and the availability of capital. In an effort to enhance the timeliness and efficiency of our quarterly stockholders communications, Buffets, Inc. is offering automated shareholder information toll-free. To hear a recording of the quarterly financial results, call 888-731-9401. To receive a release via fax, please call "Company News On-Call" 800-758-5804 extension 122825. Buffets, Inc. and Subsidiaries Results of Operations (Unaudited) Sixteen Weeks Ended (In thousands, except per share amounts and average weekly sales) April 23, April 22, 1997 Percent 1998 Percent Restaurant sales $240,741 100.0% $256,829 100.0% Restaurant costs: Food costs 83,779 34.8% 84,556 32.9% Labor costs 73,801 30.7% 78,511 30.6% Direct and occupancy costs 58,951 24.5% 59,872 23.3% Total restaurant costs 216,531 90.0% 222,939 86.8% Restaurant profit 24,210 10.0% 33,890 13.2% Selling,general and administrative expenses 13,270 5.5% 17,893 7.0% Site closing costs 200 0.1% 10,940 4.5% 15,797 6.1% Other (expense) income (485) -0.2% 244 0.1% Earnings before income taxes 10,455 4.3% 16,041 6.2% Income taxes 4,080 1.7% 6,176 2.4% Net earnings $6,375 2.6% $9,865 3.8% Earnings per share Basic $0.14 $0.22 57.1% Diluted $0.14 $0.21 50.0% Weighted average common shares assumed outstanding Basic 45,191 45,399 Diluted 45,440 49,572 Number of Company-owned restaurants open at end of period 355 364 2.5% Average weekly sales of Company-owned restaurants open at end of period $43,089 $44,386 3.0% December 31, April 22, 1997 1998 Current assets $65,111 $81,970 Property and equipment (net) 330,647 330,822 Goodwill (net) 5,624 5,517 Other assets 2,194 2,049 $403,576 $420,358 Current liabilities $85,528 $92,762 Long term debt 44,454 43,758 Deferred income 212 91 Deferred income taxes 6,695 6,417 Stockholders' equity 266,687 277,330 $403,576 $420,358
SOURCE Buffets, Inc.
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