2014

LRI Holdings, Inc., the Parent Company of Logan's Roadhouse, Inc., Announces Financial Results for the Second Quarter and Year-to-Date Periods of Fiscal Year 2013

NASHVILLE, Tenn., March 12, 2013 /PRNewswire/ -- LRI Holdings, Inc., the parent company of Logan's Roadhouse, Inc., today announced financial results for the second quarter and year-to-date periods of fiscal year 2013 ended January 27, 2013.



Thirteen weeks ended  


Twenty-six weeks ended

(In thousands)


January 27, 2013

January 29, 2012


January 27, 2013

January 29, 2012










Net sales


$         160,567

$         156,876


$         310,825

$         300,649


Net income (loss)


5,515

555


(4,546)

(2,729)


Adjusted EBITDA


14,663

19,330


26,724

32,627


Selected Highlights for the Second Quarter 2013 Compared to the Second Quarter 2012:

  • Opened three new company-owned Logan's Roadhouse® restaurants during the second quarter 2013.
  • Net sales increased 2.4% to $160.6 million from $156.9 million.
  • Comparable restaurant sales declined 2.6%, which consisted of an average check decrease of 0.3% and a traffic decrease of 2.4%.
  • Net income of $5.5 million compared to $0.6 million.
  • Adjusted EBITDA decreased 24.1% to $14.7 million from $19.3 million. (*)

Selected Highlights for Year-to-Date 2013 Compared to Year-to-Date 2012:

  • Opened eight new company-owned Logan's Roadhouse® restaurants during fiscal year 2013.
  • Net sales increased 3.4% to $310.8 million from $300.6 million.
  • Comparable restaurant sales declined 2.5%, which consisted of an average check increase of 1.0% and a traffic decrease of 3.4%.
  • Net loss of $4.5 million compared to $2.7 million.
  • Adjusted EBITDA decreased 18.1% to $26.7 million from $32.6 million. (*)

(*) Please see reconciliation table at the end of this release.

Commenting on the financial results for the second quarter of fiscal 2013, Amy Bertauski, Chief Financial Officer, stated, "Intense competition and continued negative consumer sentiment contributed to our comparable sales decline, which in turn resulted in lower restaurant operating profit and adjusted EBITDA compared to the year-ago period.  Our overall comparable restaurant sales were in line with the prior quarter, however we did realize a sequential improvement in customer traffic offset by a decline in average check.  We have also extended growth in alcohol sales to seven consecutive quarters with continued momentum since completing our bar refreshing program last year.  While we are disappointed in our overall results, we are working diligently at improving our performance from current levels by focusing on initiatives to rebuild traffic."

Commenting on his recent appointment as President, Chief Executive Officer, and Chairman, Mike Andres stated, "I am excited to join the company to help lead this committed and passionate Logan's team to continue to create and consistently execute an experience that meets and exceeds the changing needs and expectations of our guests."

Additional discussion and analysis of the Company's financial condition and results of operations can be found in its Quarterly Report on Form 10-Q for the fiscal period ended January 27, 2013.  It is available at www.logansroadhouse.com under the investor relations section.

Conference Call

The Company will host a conference call on Thursday, March 14, 2013 at 10:30 a.m. ET to discuss its financial results for the second quarter and year-to-date periods of fiscal year 2013.  The conference call will be hosted by Mike Andres, President and Chief Executive Officer, and Amy Bertauski, Chief Financial Officer. 

The domestic dial-in number for the call is 888-727-7721, and the international dial-in number is 913-312-1487.  Please call approximately 10 minutes in advance to ensure that you are connected prior to the presentation.  A telephone replay will be available beginning at 1:30 p.m. ET on Thursday, March 14, 2013 through 11:59 p.m. ET on Friday, March 14, 2014, and may be accessed by using the domestic replay number 877-870-5176 or the international replay number 858-384-5517; the passcode is 6603415. 

About Logan's Roadhouse

Logan's opened its first restaurant in 1991 in Lexington, KY, and has grown as an affordable, full-service restaurant chain to 230 company-owned and 26 franchised Logan's Roadhouse restaurants in 23 states with approximately 15,000 employees.  The Company's mission is to recreate the traditional American roadhouse by offering consumers value-oriented, high quality, "craveable" meals for lunch and dinner served in the hospitable tradition and distinctive atmosphere reminiscent of an American roadhouse of the 1930's and 1940's.  Logan's menu features specially seasoned aged steaks, fresh ground steak burgers, fresh chicken dishes and salads, fall-off-the-bone ribs, distinctive fresh-baked yeast rolls and bottomless buckets of peanuts.  LRI Holdings, Inc. is the holding company of Logan's Roadhouse.

Contact   
Investor Relations  
InvestorRelations@logansroadhouse.com  
(855) 255-2789  



LRI HOLDINGS, INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




(unaudited)







Thirteen weeks ended


Twenty-six weeks ended

(In thousands)

January 27,
2013

January 29,
2012


January 27,
2013

January 29,
2012

Revenues:






  Net sales 

$        160,567

$        156,876


$        310,825

$        300,649

  Franchise fees and royalties 

526

530


1,038

1,037

     Total revenues 

161,093

157,406


311,863

301,686

Costs and expenses:






  Restaurant operating costs:






     Cost of goods sold 

53,942

51,446


103,882

99,335

     Labor and other related expenses 

47,545

45,918


93,251

89,590

     Occupancy costs 

13,596

12,210


26,364

23,929

     Other restaurant operating expenses 

26,831

24,118


51,492

47,275

  Depreciation and amortization 

5,102

5,017


10,414

9,789

  Pre-opening expenses 

763

1,478


1,674

3,068

  General and administrative 

6,722

6,206


14,043

12,391

  Restaurant impairment and closing charges 

701

108


701

108

     Total costs and expenses 

155,202

146,501


301,821

285,485

     Operating income

5,891

10,905


10,042

16,201

Interest expense, net 

10,112

10,122


20,261

19,490

    (Loss) income before income taxes 

(4,221)

783


(10,219)

(3,289)

Income tax (benefit) expense 

(9,736)

228


(5,673)

(560)

     Net income (loss)

$            5,515

$               555


$          (4,546)

$          (2,729)







 

LRI HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS






(In thousands, except share data)

January 27,
2013

July 29,
2012

ASSETS

(unaudited)


Current assets:



  Cash and cash equivalents 

$       14,141

$       21,732

  Receivables 

10,899

8,288

  Inventories 

12,565

12,349

  Prepaid expenses and other current assets 

5,077

4,294

  Income taxes receivable 

6,017

3,911

  Deferred income taxes 

2,046

2,046

     Total current assets 

50,745

52,620

Property and equipment, net 

240,016

239,553

Other assets 

17,125

18,527

Goodwill 

284,078

284,078

Tradename 

71,694

71,694

Other intangible assets, net 

20,313

21,354

     Total assets 

$     683,971

$     687,826

LIABILITIES AND STOCKHOLDER'S EQUITY



Current liabilities:



  Accounts payable 

$       20,162

$       21,193

  Payable to RHI

507

50

  Other current liabilities and accrued expenses 

54,496

55,268

     Total current liabilities 

75,165

76,511

Long-term debt 

355,000

355,000

Deferred income taxes 

32,561

32,561

Other long-term obligations 

41,739

39,702

     Total liabilities 

504,465

503,774

Commitments and contingencies

-

-

Stockholder's equity:



  Common stock ($0.01 par value; 100 shares authorized; 1 share issued and outstanding)

-

-

  Additional paid-in capital 

230,000

230,000

  Retained deficit 

(50,494)

(45,948)

     Total stockholder's equity 

179,506

184,052

     Total liabilities and stockholder's equity 

$     683,971

$     687,826




 

LRI HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



(unaudited)




Twenty-six weeks ended

(In thousands)

January 27,
2013

January 29,
2012

Cash flows from operating activities:



  Net loss

$         (4,546)

$         (2,729)

  Adjustments to reconcile net loss to net cash
  provided by operating activities:



    Depreciation and amortization 

10,414

9,789

    Other amortization 

902

293

    Loss on sale/disposal of property and equipment 

543

477

    Amortization of deferred gain on sale and leaseback transactions

(19)

(6)

    Impairment charges for long-lived assets 

701

108

    Share-based compensation expense 

473

490

    Deferred income taxes 

-

437

  Changes in operating assets and liabilities:



    Receivables 

(2,611)

966

    Inventories 

(216)

(386)

    Prepaid expenses and other current assets 

(783)

(1,168)

    Other non-current assets and intangibles 

176

(1,395)

    Accounts payable 

(972)

795

    Payable to RHI

(16)

(5)

    Income taxes payable/receivable 

(2,106)

(1,442)

    Other current liabilities and accrued expenses 

(772)

2,672

    Other long-term obligations 

2,359

2,853

       Net cash provided by operating activities 

3,527

11,749

Cash flows from investing activities:



  Purchase of property and equipment 

(16,163)

(25,397)

  Proceeds from sale and leaseback transactions, net of expenses 

5,045

6,405

       Net cash used in investing activities 

(11,118)

(18,992)

Cash flows from financing activities:



  Payments on revolving credit facility 

(12,600)

(18,400)

  Borrowings on revolving credit facility 

12,600

18,400

       Net cash provided by financing activities 

-

-

       Decrease in cash and cash equivalents 

(7,591)

(7,243)

Cash and cash equivalents, beginning of period 

21,732

19,103

Cash and cash equivalents, end of period 

$         14,141

$         11,860




 

Forward-Looking Statements

This press release contains statements about future events and expectations that constitute forward-looking statements.  These forward-looking statements can generally be identified by the use of forward-looking terminology such as "may," "plan," "seek," "will," "expect," "intend," "estimate," "anticipate," "believe" or the negative thereof or similar terminology.  These statements are based on management's beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account the information currently available.  These statements are not statements of historical fact.  Forward-looking statements involve risks and uncertainties that may cause the Company's actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements and you should not place undue reliance on such statements.  Please refer to our Annual Report on Form 10-K for the fiscal year ended July 29, 2012, and subsequent periodic reports that we have filed with the Securities and Exchange Commission, for a discussion of risk factors that may contribute to these differences.  Any forward-looking information presented herein is made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events or otherwise.

Non-GAAP Financial Measures

This press release also contains non-GAAP financial measures such as EBITDA, Adjusted EBITDA, and Adjusted EBITDAR.  The Company believes that these measures, together with reconciliations to the most comparable GAAP measure, are helpful to both management and investors in understanding and analyzing financial performance.  However, the Company's non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures used by other companies.  These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for GAAP financial measures.

To the extent we discuss any non-GAAP financial measures on the earnings call, a reconciliation of each measure to the most directly comparable GAAP measure is available in this press release. In addition, the Current Report on Form 8-K furnished to the SEC concurrent with the issuance of this press release includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.

The following table sets forth a reconciliation of net income (loss), the most directly comparable GAAP financial measure, to EBITDA, Adjusted EBITDA and Adjusted EBITDAR.

 








Thirteen weeks ended


Twenty-six weeks ended

(In thousands)

January 27,
2013

January 29,
2012


January 27,
2013

January 29,
2012

Net income (loss)

$         5,515

$         555


$       (4,546)

$     (2,729)

Interest expense, net 

10,112

10,122


20,261

19,490

Income tax (benefit) expense 

(9,736)

228


(5,673)

(560)

Depreciation and amortization 

5,102

5,017


10,414

9,789

     EBITDA 

10,993

15,922


20,456

25,990

Adjustments






Sponsor management fees(a) 

250

250


500

500

Non-cash asset write-offs:






  Restaurant impairment(b) 

701

108


701

108

  Loss on disposal of property and equipment(c) 

393

174


531

469

Restructuring costs(d) 

-

-


167

-

Pre-opening expenses (excluding rent)(e) 

637

1,266


1,392

2,564

Losses on sales of property(f) 

12

2


13

8

Non-cash rent adjustment(g) 

1,416

1,315


2,381

2,435

Costs related to the Transactions(h) 

-

46


20

43

Non-cash stock-based compensation(i) 

255

240


473

490

Other adjustments(j) 

6

7


90

20

     Adjusted EBITDA 

14,663

19,330


26,724

32,627

Cash rent expense(k) 

9,906

9,109


19,621

17,940

     Adjusted EBITDAR 

$       24,569

$    28,439


$       46,345

$     50,567







 



(a)  

Sponsor management fees consist of fees paid to certain affiliates of Kelso & Company, L.P. (the "Kelso Affiliates") under an advisory agreement.

(b) 

Restaurant impairment charges were recorded in connection with the determination that the carrying value of certain of our restaurants exceeded their estimated fair value.

(c) 

Loss on disposal of property and equipment consists of the loss on disposal or retirement of assets that are not fully depreciated.

(d)  

Restructuring costs include severance and other related charges.

(e)  

Pre-opening expenses (excluding rent) include expenses directly associated with the opening of a new restaurant.

(f)  

We recognize losses in connection with the sale and leaseback of restaurants when the fair value of the property being sold is less than the undepreciated cost of the property.

(g) 

Non-cash rent adjustments represent the non-cash rent expense calculated as the difference between GAAP rent expense and amounts payable in cash under the leases during such time period. In measuring our operational performance, we focus on our cash rent payments.

(h) 

Costs related to the Transactions include legal, professional, and other fees incurred in connection with our acquisition by the Kelso Affiliates and Management Investors (the "Transactions").

(i)  

Non-cash stock-based compensation represents compensation expense recognized for time-based stock options issued by RHI.

(j)  

Other adjustments include ongoing expenses of closed restaurants, as well as non-recurring professional fees.

(k) 

Cash rent expense represents actual cash payments required under our leases.

 

SOURCE LRI Holdings, Inc.




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