Benihana Inc. Reports Fiscal Third Quarter 2008 Results
-Conference Call to be Held Today at 8:30 AM ET-
MIAMI--(BUSINESS WIRE)--Feb. 15, 2008--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 third quarter 2008 ended January 6, 2008.
Highlights for the Company's 12-week fiscal third quarter 2008 relative to the 12-week fiscal third quarter 2007 include:
-- Total restaurant sales increased 12.2% to $69.4 million
-- Company-wide comparable restaurant sales increased 1.5%
-- Restaurant operating profit of $11.7 million vs. $10.5 million
-- Restaurant operating profit margin of 16.8% vs. 17.0%
-- Income from operations of $4.6 million vs. $5.2 million
"Like our restaurant peers, we too are not impervious to discretionary spending pressures, particularly in certain markets, and are seeing the effects of a challenging environment on our guests. We have therefore redoubled our efforts to execute as flawlessly as possible within the four walls of our operations, and have also focused our marketing on communicating the distinctive experience and value we offer our guests, especially in these more difficult times," said Joel A. Schwartz, Chairman and Chief Executive Officer.
Mr. Schwartz concluded, "As we approach the end of both our remodeling program and investment period, we will begin to reap the benefits of a younger, more contemporary portfolio, as well as the infrastructure we have built to support new openings and our high quality pipeline. We are confident that we are building a strong foundation for our Company, one that will sustain us as we navigate through a weaker consumer environment, and position us for meaningful earnings growth over the coming years."
Fiscal Third Quarter 2008 Results
For the 12-week fiscal third quarter 2008, total revenues increased 12.2% to $69.8 million, compared with $62.2 million in the fiscal third quarter of 2007. Total restaurant sales grew 12.2% to $69.4 million from $61.9 million in the same quarter of the previous year. Company-wide comparable restaurant sales increases were 1.5%, net, including 2.7% at Benihana teppanyaki, (3.6%) at RA Sushi, and 0.2% at Haru.
Restaurant sales for the fiscal third quarter 2008 included a $0.9 million increase from the comparable base as well as $3.7 million from new restaurants, net of one permanent closure. The Company also realized incremental sales of $2.9 million due to the favorable phasing of temporary closures, as compared to the fiscal third quarter 2007.
During the fiscal third quarter 2008, the Company opened RA Sushi restaurants in Tustin, CA and Mesa, AZ as well as Haru restaurants in Boston, MA and New York City. The Company also reopened Benihana teppanyaki restaurants in Tucson, AZ and Cherry Hill, NJ which had been closed for remodeling, while the Benihana teppanyaki restaurant in San Diego, CA was closed for the entire 12-week period for remodeling. There were a total of 985 store-operating weeks in the fiscal third quarter of 2008 compared to 893 store-operating weeks in the fiscal third quarter of 2007.
Restaurant operating profit for the fiscal third quarter 2008 was $11.7 million, or 16.8% of restaurant sales, compared to $10.5 million, or 17.0% of restaurant sales a year-ago.
Marketing, general and administrative expenses for the fiscal third quarter 2008 totaled $6.2 million, or 8.9% of restaurant sales, compared to $5.3 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 $4.6 million and $5.2 million, respectively.
Net income for the fiscal third quarter 2008 was $3.2 million, or $0.19 in diluted earnings per share, compared to $3.3 million, or $0.19 in diluted earnings per share in the same quarter last year.
Guidance
The Company is providing the following updated guidance for fiscal 2008:
-- Total restaurant sales of $293 million to $294 million, and
4,115 to 4,125 in total restaurant operating weeks (including
the effect of 140 to 145 in gross operating weeks that are
expected to be lost due to remodels);
-- The opening of three Benihana teppanyaki restaurants, five RA
Sushi restaurants, and two Haru restaurants. To date, the
Company has opened all three Benihana teppanyaki restaurants,
four RA Sushi restaurants, and both Haru restaurants;
-- The completion of a total of sixteen Benihana teppanyaki
remodels by the end of fiscal 2008, along with an additional
five that will be started in fiscal 2008 and completed during
fiscal 2009. To date, the Company has completed fifteen
remodels;
-- A total of $2.4 million in accelerated depreciation costs for
the full year, of which approximately $2.1 million has already
been reflected in the first three quarters of fiscal 2008,
related to shortening the useful lives for those restaurants
affected by the ongoing renovation and revitalization program;
-- Cost of sales, as a percentage of restaurant sales, is
expected to be slightly favorable on an annualized basis
compared to fiscal 2007, while labor, as a percentage of
restaurant sales, is expected to be slightly unfavorable 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 70 basis points;
-- Capital expenditures of approximately $60 million during the
fiscal 2008, and;
-- Utilization of between $15 million and $25 million of the
available line of credit, resulting in decreased net interest
income in fiscal 2008.
Conference Call Today
The Company will hold a conference call to discuss its fiscal third quarter 2008 operating results today at 8:30 AM ET. The conference call can be accessed live over the phone by dialing 1-888-221-3886, or for international callers, 1-913-312-1498. A replay will be available one hour after the call through February 22, 2008 and can be accessed by dialing 1-888-203-1112, or for international callers, 1-719-457-0820; the conference ID is 6656146. The call will also be webcast live from the investor relations portion of the Company's website at www.benihana.com.
About Benihana
Benihana Inc. (NASDAQ: BNHNA; BNHN) operates 86 restaurants nationwide, including 60 Benihana teppanyaki restaurants, nine Haru sushi restaurants, and seventeen RA Sushi Bar restaurants. Under development at present are seventeen restaurants - eight Benihana teppanyaki restaurants and nine RA Sushi restaurants. In addition, 18 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
-------------------
6-Jan-08 31-Dec-06 $ Change % Change
-------------------------------------
Revenues
Restaurant sales $69,439 $61,867 $7,572 12.2%
Franchise fees and royalties 375 335 40 11.9%
-------------------------------------
Total revenues 69,814 62,202 7,612 12.2%
-------------------------------------
Costs and Expenses
Cost of food and beverage sales 16,343 15,153 1,190 7.9%
Restaurant operating expenses 41,428 36,195 5,233 14.5%
Restaurant opening costs 1,227 363 864 238.0%
Marketing, general and
administrative expenses 6,208 5,322 886 16.6%
-------------------------------------
Total operating expenses 65,206 57,033 8,173 14.3%
-------------------------------------
Income from operations 4,608 5,169 (561) -10.9%
Interest income, net 147 33 114 345.5%
-------------------------------------
Income before income taxes 4,755 5,202 (447) -8.6%
Income tax provision 1,584 1,923 (339) -17.6%
-------------------------------------
Net income 3,171 3,279 (108) -3.3%
Less: accretion of issuance costs
and preferred stock dividends 250 272 (22) -8.1%
-------------------------------------
Net income attributable to common
stockholders $2,921 $3,007 $(86) -2.9%
=====================================
Earnings Per Share
Basic earnings per common share $0.19 $0.20 $(0.01) -5.0%
=====================================
Diluted earnings per common share $0.19 $0.19 $(0.00) 0.0%
=====================================
Weighted Average Shares
Outstanding
Basic 15,252 14,889 363 2.4%
=====================================
Diluted 17,130 17,333 (203) -1.2%
=====================================
Benihana Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(Unaudited)
(in thousands except per share
data)
Ten Periods Ended
-----------------
6-Jan-08 31-Dec-
06 $ Change % Change
-----------------------------------
Revenues
Restaurant sales $225,394 $199,846 $25,548 12.8%
Franchise fees and royalties 1,324 1,178 146 12.4%
-----------------------------------
Total revenues 226,718 201,024 25,694 12.8%
-----------------------------------
Costs and Expenses
Cost of food and beverage sales 53,041 48,618 4,423 9.1%
Restaurant operating expenses 134,693 117,796 16,897 14.3%
Restaurant opening costs 2,688 1,074 1,614 150.3%
Marketing, general and
administrative expenses 21,274 17,628 3,646 20.7%
-----------------------------------
Total operating expenses 211,696 185,116 26,580 14.4%
-----------------------------------
Income from operations 15,022 15,908 (886) -5.6%
Interest income, net 258 285 (27) -9.5%
-----------------------------------
Income before income taxes 15,280 16,193 (913) -5.6%
Income tax provision 5,394 5,770 (376) -6.5%
-----------------------------------
Net income 9,886 10,423 (537) -5.2%
Less: accretion of issuance costs
and preferred stock dividends 834 834 - 0.0%
-----------------------------------
Net income attributable to common
stockholders $9,052 $9,589 $(537) -5.6%
===================================
Earnings Per Share
Basic earnings per common share $0.60 $0.65 $(0.05) -7.7%
===================================
Diluted earnings per common share $0.58 $0.60 $(0.02) -3.3%
===================================
Weighted Average Shares
Outstanding
Basic 15,147 14,814 333 2.2%
===================================
Diluted 17,134 17,241 (107) -0.6%
===================================
Benihana Inc. and Subsidiaries
Sales by Concept
(Unaudited)
(in thousands)
Three Periods
Ended
------------------
6-Jan-08 31-Dec-06 $ Change % Change
-------------------------------------
Total restaurant sales by
concept:
Benihana $51,666 $46,061 $5,605 12.2%
Haru 8,042 7,178 864 12.0%
RA Sushi 9,731 8,628 1,103 12.8%
Sushi Doraku - - - 0.0%
-------------------------------------
Total restaurant sales $69,439 $61,867 $7,572 12.2%
=====================================
Comparable restaurant sales by
concept:
Benihana $45,145 $43,942 $1,203 2.7%
Haru 7,190 7,178 12 0.2%
RA Sushi 8,321 8,628 (307) -3.6%
Sushi Doraku - - - 0.0%
-------------------------------------
Total comparable restaurant sales $60,656 $59,748 $908 1.5%
=====================================
Benihana Inc. and Subsidiaries
Sales by Concept
(Unaudited)
(in thousands)
Ten Periods Ended
------------------
6-Jan-08 31-Dec-06 $ Change % Change
------------------------------------
Total restaurant sales by concept:
Benihana $166,151 $147,756 $18,395 12.4%
Haru 25,956 23,778 2,178 9.2%
RA Sushi 33,287 28,127 5,160 18.3%
Sushi Doraku - 185 (185) -100.0%
------------------------------------
Total restaurant sales $225,394 $199,846 $25,548 12.8%
====================================
Comparable restaurant sales by
concept:
Benihana $145,515 $139,955 $5,560 4.0%
Haru 25,104 23,778 1,326 5.6%
RA Sushi 28,570 28,132 438 1.6%
Sushi Doraku - - - 0.0%
------------------------------------
Total comparable restaurant sales $199,189 $191,865 $7,324 3.8%
====================================
Benihana Inc. and Subsidiaries
Restaurant Operating Profit
(Unaudited)
(in thousands)
Three Periods Ended
-------------------
6-Jan-08 31-Dec-06 $ Change % Change
-------------------------------------
Restaurant sales $69,439 $61,867 $7,572 12.2%
Cost of food & beverage sales 16,343 15,153 1,190 7.9%
-------------------------------------
Gross profit 53,096 46,714 6,382 13.7%
-------------------------------------
Restaurant operating expenses:
Labor and related costs 23,673 20,962 2,711 12.9%
Restaurant supplies 1,630 1,487 143 9.6%
Credit card discounts 1,354 1,143 211 18.5%
Utilities 1,726 1,489 237 15.9%
Occupancy costs 4,024 3,870 154 4.0%
Depreciation and amortization 3,739 3,135 604 19.3%
Other restaurant operating
expenses 5,282 4,109 1,173 28.5%
-------------------------------------
Total restaurant operating
expenses 41,428 36,195 5,233 14.5%
-------------------------------------
Restaurant operating profit $11,668 $10,519 $1,149 10.9%
=====================================
Benihana Inc. and Subsidiaries
Restaurant Operating Profit
(Unaudited)
(in thousands)
Ten Periods Ended
------------------
6-Jan-08 31-Dec-06 $ Change % Change
------------------------------------
Restaurant sales $225,394 $199,846 $25,548 12.8%
Cost of food & beverage sales 53,041 48,618 4,423 9.1%
------------------------------------
Gross profit 172,353 151,228 21,125 14.0%
------------------------------------
Restaurant operating expenses:
Labor and related costs 76,460 67,517 8,943 13.2%
Restaurant supplies 5,167 4,570 597 13.1%
Credit card discounts 4,281 3,700 581 15.7%
Utilities 5,918 5,177 741 14.3%
Occupancy costs 13,384 12,091 1,293 10.7%
Depreciation and amortization 12,477 10,299 2,178 21.1%
Other restaurant operating
expenses 17,006 14,442 2,564 17.8%
------------------------------------
Total restaurant operating
expenses 134,693 117,796 16,897 14.3%
------------------------------------
Restaurant operating profit $37,660 $33,432 $4,228 12.6%
====================================
Benihana Inc. and Subsidiaries
Restaurant Operating Margins
(Unaudited)
Three Periods Ended
-------------------
6-Jan-08 31-Dec-06
-------------------
Restaurant sales 100.00% 100.00%
Cost of food and beverage sales 23.54% 24.49%
-------------------
Gross profit margin 76.46% 75.51%
-------------------
Restaurant operating expenses:
Labor and related costs 34.09% 33.88%
Restaurant supplies 2.35% 2.40%
Credit card discounts 1.95% 1.85%
Utilities 2.49% 2.41%
Occupancy costs 5.80% 6.26%
Depreciation and amortization 5.38% 5.07%
Other restaurant operating expenses 7.61% 6.64%
-------------------
Total restaurant operating expenses 59.66% 58.50%
-------------------
Restaurant operating profit margin 16.80% 17.00%
===================
Benihana Inc. and Subsidiaries
Restaurant Operating Margins
(Unaudited)
Ten Periods Ended
-------------------
6-Jan-08 31-Dec-06
-------------------
Restaurant sales 100.00% 100.00%
Cost of food and beverage sales 23.53% 24.33%
-------------------
Gross profit margin 76.47% 75.67%
-------------------
Restaurant operating expenses:
Labor and related costs 33.92% 33.78%
Restaurant supplies 2.29% 2.29%
Credit card discounts 1.90% 1.85%
Utilities 2.63% 2.59%
Occupancy costs 5.94% 6.05%
Depreciation and amortization 5.54% 5.15%
Other restaurant operating expenses 7.55% 7.23%
-------------------
Total restaurant operating expenses 59.76% 58.94%
-------------------
Restaurant operating profit margin 16.71% 16.73%
===================
Benihana Inc. and Subsidiaries
Balance Sheet Data
(Unaudited)
(in thousands)
6-Jan-08 1-Apr-07
-------------------
Assets
Cash and cash equivalents $1,953 $8,449
Other current assets 15,866 13,085
------------------
Total current assets 17,819 21,534
Property and equipment, net 176,332 146,479
Goodwill 29,900 29,900
Other assets 9,577 6,376
------------------
$233,628 $204,289
==================
Liabilities and Stockholders' Equity
Other current liabilities $38,158 $33,835
------------------
Total current liabilities 38,158 33,835
Long-term debt--bank 6,931 -
Other liabilities 14,489 8,611
------------------
Total liabilities 59,578 42,446
Convertible preferred stock 19,428 19,361
Total stockholders' equity 154,622 142,482
------------------
$233,628 $204,289
==================
CONTACT: ICR
Raphael Gross/Tom Ryan, 203-682-8200
SOURCE: Benihana Inc.
###
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