Benihana Inc. Reports Fiscal Second Quarter 2008 Results

-Conference Call to be Held Today at 5:00 PM ET-

MIAMI--(BUSINESS WIRE)--Nov. 20, 2007--Benihana Inc. (NASDAQ: BNHNA; BNHN), operator of the nation's largest chain of Japanese theme and sushi restaurants, today reported results for its 12-week fiscal second quarter 2008 ended October 14, 2007.

Highlights for the Company's 12-week fiscal second quarter 2008 relative to the 12-week fiscal second quarter 2007 include:


-- Total restaurant sales increased 13.7% to $66.6 million

-- Company-wide comparable restaurant sales increased 2.8%

-- Restaurant operating profit of $10.3 million vs. $8.9 million

-- Restaurant operating profit margin of 15.4% vs. 15.1%

-- Income from operations of $3.8 million vs. $3.9 million

"We were pleased to have generated comparable restaurant sales growth across all three of our concepts during the period, despite economic pressures that continue to affect consumer spending. In a difficult environment, we continue to sustain our positive trends, in all of our concepts," said Joel A. Schwartz, Chairman and Chief Executive Officer.

Fiscal Second Quarter 2008 Results

For the 12-week fiscal second quarter 2008, total revenues increased 13.6% to $67.0 million, compared with $58.9 million in the fiscal second quarter of 2007. Total restaurant sales grew 13.7% to $66.6 million from $58.6 million in the same quarter of the previous year. Company-wide comparable restaurant sales increases were 2.8%, including 2.4% at Benihana teppanyaki, 3.0% at RA Sushi, and 4.8% at Haru.

Restaurant sales for the fiscal second quarter 2008 included a $1.6 million increase from the comparable base as well as $3.7 million from new and acquired restaurants, net of permanent closures. The Company also realized incremental sales of $2.7 million due to favorable phasing of temporary closures, as compared to fiscal second quarter 2007.

The Burlingame, CA restaurant reopened during the fiscal second quarter 2008. The Benihana restaurants located in Tucson, AZ; San Diego, CA; and Cherry Hill, NJ were closed for renovations as of the end of the current quarter. The locations in Tucson and Cherry Hill have since reopened during the fiscal third quarter 2008. During the fiscal second quarter 2008, the Benihana teppanyaki restaurant in Dallas, TX continued operating in a limited capacity due to its remodeling schedule. In total, the Company realized a gain of 100 operating weeks (940 vs. 840) compared to the same period last year.

Restaurant operating profit for the fiscal second quarter 2008 was $10.3 million, or 15.4% of restaurant sales, compared to $8.9 million, or 15.1% of restaurant sales a year-ago.

Marketing, general and administrative expenses for the fiscal second quarter 2008 totaled $6.0 million, or 9.1% of restaurant sales, compared to $5.1 million, or 8.6% of restaurant sales in the same period last year, as a result of our continued investment in infrastructure. This resulted in income from operations of $3.8 million and $3.9 million, respectively.

Net income for the fiscal second quarter 2008 was $2.5 million, or $0.15 in diluted earnings per share, compared to $2.6 million, or $0.15 in diluted earnings per share in the same quarter last year.

Mr. Schwartz added, "We continue to execute our restaurant development and operational plans. Similar to the fiscal first quarter, the expenses associated with our ongoing renovation and infrastructure efforts resulted in essentially on par earnings versus the year-ago period. This is part of the investment process, as we are building a foundation to support new restaurant openings as well as a pipeline of high quality locations. Ultimately, these efforts will position the Company for meaningful earnings growth over the coming years."

Guidance

The Company is providing the following updated guidance for fiscal 2008 and will continue to update these assumptions as circumstances warrant:

-- Total restaurant sales of $300 million to $305 million, and
4,000 to 4,125 in total restaurant operating weeks (including
the effect of 135 to 155 in gross operating weeks that are
expected to be lost due to remodels);

-- The opening of three Benihana teppanyaki restaurants, six RA
Sushi restaurants, and two Haru restaurants. To date, the
Company has opened two Benihana teppanyaki restaurants, two RA
Sushi restaurants, and one Haru restaurant;

-- The completion of a total of sixteen Benihana teppanyaki
remodels by the end of fiscal 2008, along with an additional
six that will be started in fiscal 2008 and completed during
fiscal 2009. Excluding the two Benihana teppanyaki restaurants
that are currently being remodeled in San Diego, CA and
Dallas, TX, the Company will not begin any additional
renovation projects during the fiscal third quarter 2008 to
take advantage of the Holiday season. To date, the Company has
completed fourteen remodels;

-- A total of $2.4 million in accelerated depreciation costs for
the full year, of which approximately $1.8 million has already
been reflected in the first half of fiscal 2008, related to
shortening the useful lives for those restaurants affected by
the ongoing renovation and revitalization program;

-- Cost of sales and labor, as percentages of restaurant sales,
are expected to be slightly favorable on an annualized basis
compared to fiscal 2007;

-- Additional infrastructure to support new unit development and
management of a larger restaurant portfolio compared to fiscal
2007, and consequently, general and administrative expenses,
as a percentage of total restaurant sales, are expected to be
higher on an annualized basis compared to fiscal 2007 by
approximately 90 basis points;

-- Capital expenditures of approximately $60 million during the
fiscal 2008, and;

-- Utilization of between $20 million and $30 million of the
available line of credit, resulting in net interest expense in
fiscal 2008.

Conference Call Today

The conference call can be accessed live over the phone by dialing 1-888-713-3596, or for international callers, 1-913-312-0703. A replay will be available one hour after the call through November 27, 2007 and can be accessed by dialing 1-888-203-1112, or for international callers, 1-719-457-0820; the conference ID is 6966041. The call will also be webcast live from the Company's website at www.benihana.com under the investor relations section.

About Benihana

Benihana Inc. (NASDAQ: BNHNA; BNHN) operates 83 restaurants nationwide, including 60 Benihana teppanyaki restaurants, eight Haru sushi restaurants, and fifteen RA Sushi Bar restaurants. Under development at present are nineteen restaurants - eight Benihana teppanyaki restaurants, one Haru restaurant, and ten RA Sushi restaurants. In addition, 19 franchised Benihana teppanyaki restaurants are operating in the U.S., Latin America and the Caribbean.

To learn more about the Company and its three Japanese theme and sushi restaurant concepts, please view the corporate video at www.benihana.com/company_profile.asp

Benihana Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(Unaudited)

(in thousands except per share data)
Three Periods
Ended
------------------
$ %
14-Oct-07 8-Oct-06 Change Change
--------- -------- ------- ------

Revenues
Restaurant sales $66,586 $58,583 $8,003 13.7%
Franchise fees and royalties 383 346 37 10.7%
--------- -------- ------- ------
Total revenues 66,969 58,929 8,040 13.6%
--------- -------- ------- ------

Costs and Expenses
Cost of food and beverage sales 15,663 14,336 1,327 9.3%
Restaurant operating expenses 40,668 35,387 5,281 14.9%
Restaurant opening costs 752 230 522 227.0%
Marketing, general and administrative
expenses 6,040 5,057 983 19.4%
--------- -------- ------- ------
Total operating expenses 63,123 55,010 8,113 14.7%
--------- -------- ------- ------

Income from operations 3,846 3,919 (73) -1.9%
Interest income, net 86 125 (39) -31.2%
--------- -------- ------- ------

Income before income taxes and
minority interest 3,932 4,044 (112) -2.8%
Income tax provision 1,423 1,421 2 0.1%
--------- -------- ------- ------

Net income 2,509 2,623 (114) -4.3%
Less: accretion of issuance costs and
preferred stock dividends 250 250 0 0.0%
--------- -------- ------- ------

Net income attributable to common
stockholders $2,259 $2,373 ($114) -4.8%
========= ======== ======= ======

Earnings Per Share
Basic earnings per common share $0.15 $0.16 ($0.01) -6.3%
========= ======== ======= ======
Diluted earnings per common share $0.15 $0.15 $0.00 0.0%
========= ======== ======= ======

Weighted Average Shares Outstanding
Basic 15,222 14,873 349 2.3%
========= ======== ======= ======
Diluted 17,156 17,228 (72) -0.4%
========= ======== ======= ======

Benihana Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(Unaudited)

(in thousands except per share data)
Seven Periods
Ended
------------------
$ %
14-Oct-07 8-Oct-06 Change Change
--------- -------- -------- ---------

Revenues
Restaurant sales $155,955 $137,979 $17,976 13.0%
Franchise fees and royalties 949 843 106 12.6%
--------- -------- -------- ---------
Total revenues 156,904 138,822 18,082 13.0%
--------- -------- -------- ---------

Costs and Expenses
Cost of food and beverage sales 36,698 33,465 3,233 9.7%
Restaurant operating expenses 93,265 81,601 11,664 14.3%
Restaurant opening costs 1,461 711 750 105.5%
Marketing, general and
administrative expenses 15,066 12,306 2,760 22.4%
--------- -------- -------- ---------
Total operating expenses 146,490 128,083 18,407 14.4%
--------- -------- -------- ---------

Income from operations 10,414 10,739 (325) -3.0%
Interest income, net 111 252 (141) -56.0%
--------- -------- -------- ---------

Income before income taxes and
minority interest 10,525 10,991 (466) -4.2%
Income tax provision 3,810 3,847 (37) -1.0%
--------- -------- -------- ---------

Net income 6,715 7,144 (429) -6.0%
Less: accretion of issuance costs
and preferred stock dividends 584 584 0 0.0%
--------- -------- -------- ---------

Net income attributable to common
stockholders $6,131 $6,560 ($429) -6.5%
========= ======== ======== =========

Earnings Per Share
Basic earnings per common share $0.41 $0.44 ($0.03) -6.8%
========= ======== ======== =========
Diluted earnings per common share $0.39 $0.42 ($0.03) -7.1%
========= ======== ======== =========

Weighted Average Shares
Outstanding
Basic 15,103 14,783 320 2.2%
========= ======== ======== =========
Diluted 17,095 17,204 (109) -0.6%
========= ======== ======== =========

Benihana Inc. and Subsidiaries
Sales by Concept
(Unaudited)

(in thousands)
Three Periods
Ended
------------------
$ %
14-Oct-07 8-Oct-06 Change Change
--------- -------- ------ ------

Total restaurant sales by concept:
Benihana $48,971 $43,205 $5,766 13.3%
Haru 7,509 7,168 341 4.8%
RA Sushi 10,106 8,210 1,896 23.1%
Sushi Doraku - - - -
--------- -------- ------ ------
Total restaurant sales $66,586 $58,583 $8,003 13.7%
========= ======== ====== ======


Comparable restaurant sales by
concept:
Benihana $42,796 $41,786 $1,010 2.4%
Haru 7,509 7,168 341 4.8%
RA Sushi 8,464 8,215 249 3.0%
Sushi Doraku - - - -
--------- -------- ------ ------
Total comparable restaurant sales $58,769 $57,169 $1,600 2.8%
========= ======== ====== ======

Benihana Inc. and Subsidiaries
Sales by Concept
(Unaudited)

(in thousands)
Seven Periods
Ended
------------------
$ %
14-Oct-07 8-Oct-06 Change Change
--------- -------- ------- --------

Total restaurant sales by concept:
Benihana $114,485 $101,695 $12,790 12.6%
Haru 17,914 16,600 1,314 7.9%
RA Sushi 23,556 19,499 4,057 20.8%
Sushi Doraku - 185 (185) -100.0%
--------- -------- ------- --------
Total restaurant sales $155,955 $137,979 $17,976 13.0%
========= ======== ======= ========


Comparable restaurant sales by
concept:
Benihana $100,370 $96,013 $4,357 4.5%
Haru 17,914 16,600 1,314 7.9%
RA Sushi 20,249 19,504 745 3.8%
Sushi Doraku - - - 0.0%
--------- -------- ------- --------
Total comparable restaurant sales $138,533 $132,117 $6,416 4.9%
========= ======== ======= ========

Benihana Inc. and Subsidiaries
Restaurant Operating Profit
(Unaudited)

(in thousands)
Three Periods
Ended
------------------
$ %
14-Oct-07 8-Oct-06 Change Change
--------- -------- ------ ------

Restaurant sales $66,586 $58,583 $8,003 13.7%
Cost of food & beverage sales 15,663 14,336 1,327 9.3%
--------- -------- ------ ------
Gross profit 50,923 44,247 6,676 15.1%
--------- -------- ------ ------

Restaurant operating expenses:
Labor and related costs 22,922 20,231 2,691 13.3%
Restaurant supplies 1,501 1,403 98 7.0%
Credit card discounts 1,274 1,088 186 17.1%
Utilities 1,945 1,750 195 11.1%
Occupancy costs 3,899 3,520 379 10.8%
Depreciation and amortization 3,837 2,939 898 30.6%
Other restaurant operating expenses 5,290 4,456 834 18.7%
--------- -------- ------ ------
Total restaurant operating expenses 40,668 35,387 5,281 14.9%
--------- -------- ------ ------

Restaurant operating profit $10,255 $8,860 $1,395 15.7%
========= ======== ====== ======

Benihana Inc. and Subsidiaries
Restaurant Operating Profit
(Unaudited)

(in thousands)
Seven Periods
Ended
------------------
$ %
14-Oct-07 8-Oct-06 Change Change
--------- -------- ------- --------

Restaurant sales $155,955 $137,979 $17,976 13.0%
Cost of food & beverage sales 36,698 33,465 3,233 9.7%
--------- -------- ------- --------
Gross profit 119,257 104,514 14,743 14.1%
--------- -------- ------- --------

Restaurant operating expenses:
Labor and related costs 52,787 46,555 6,232 13.4%
Restaurant supplies 3,537 3,083 454 14.7%
Credit card discounts 2,927 2,557 370 14.5%
Utilities 4,192 3,688 504 13.7%
Occupancy costs 9,360 8,221 1,139 13.9%
Depreciation and amortization 8,738 7,164 1,574 22.0%
Other restaurant operating
expenses 11,724 10,333 1,391 13.5%
--------- -------- ------- --------
Total restaurant operating
expenses 93,265 81,601 11,664 14.3%
--------- -------- ------- --------

Restaurant operating profit $25,992 $22,913 $3,079 13.4%
========= ======== ======= ========

Benihana Inc. and Subsidiaries
Restaurant Operating Margins
(Unaudited)

Three Periods Ended
--------------------
14-Oct-07 8-Oct-06
---------- ---------

Restaurant sales 100.00% 100.00%
Cost of food and beverage sales 23.52% 24.47%
---------- ---------
Gross profit margin 76.48% 75.53%
---------- ---------

Restaurant operating expenses:
Labor and related costs 34.42% 34.53%
Restaurant supplies 2.25% 2.39%
Credit card discounts 1.91% 1.86%
Utilities 2.92% 2.99%
Occupancy costs 5.86% 6.01%
Depreciation and amortization 5.76% 5.02%
Other restaurant operating expenses 7.94% 7.61%
---------- ---------
Total restaurant operating expenses 61.08% 60.40%
---------- ---------

Restaurant operating profit margin 15.40% 15.12%
========== =========

Benihana Inc. and Subsidiaries
Restaurant Operating Margins
(Unaudited)

Seven Periods Ended
--------------------
14-Oct-07 8-Oct-06
---------- ---------

Restaurant sales 100.00% 100.00%
Cost of food and beverage sales 23.53% 24.25%
---------- ---------
Gross profit margin 76.47% 75.75%
---------- ---------

Restaurant operating expenses:
Labor and related costs 33.85% 33.74%
Restaurant supplies 2.27% 2.23%
Credit card discounts 1.88% 1.85%
Utilities 2.69% 2.67%
Occupancy costs 6.00% 5.96%
Depreciation and amortization 5.60% 5.19%
Other restaurant operating expenses 7.52% 7.49%
---------- ---------
Total restaurant operating expenses 59.80% 59.14%
---------- ---------

Restaurant operating profit margin 16.67% 16.61%
========== =========

Benihana Inc. and Subsidiaries
Balance Sheet Data
(Unaudited)

(in thousands)
14-Oct-07 1-Apr-07
----------- ---------

Assets
Cash and cash equivalents $5,784 $8,449
Other current assets 14,205 13,085
----------- ---------
Total current assets 19,989 21,534

Property and equipment, net 168,438 146,479
Goodwill 29,900 29,900
Other assets 10,216 6,376
----------- ---------

$228,543 $204,289
=========== =========

Liabilities and Stockholders' Equity
Other current liabilities $37,583 $33,835
----------- ---------
Total current liabilities 37,583 33,835

Long-term debt--bank 5,207 -
Other liabilities 14,882 8,611
----------- ---------
Total liabilities 57,672 42,446

Convertible preferred stock 19,408 19,361
Total stockholders' equity 151,463 142,482
----------- ---------

$228,543 $204,289
=========== =========

CONTACT: ICR
Raphael Gross or Tom Ryan, 203-682-8200

SOURCE: Benihana Inc.

###

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