Benihana Inc. Reports Fiscal Fourth Quarter & Full Year 2008 Results

MIAMI--(BUSINESS WIRE)--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 fourth quarter and full year ended March 30, 2008.

Fiscal Fourth Quarter 2008 Results

For the 12-week fiscal fourth quarter 2008, total revenues decreased 2.0% to $70.2 million, compared with $71.6 million in the 13-week fiscal fourth quarter 2007. During the fiscal fourth quarter 2007, the Company realized an additional 75 store-operating weeks, as a result of a 53-week fiscal year. Excluding the additional operating week in fiscal 2007, which resulted in $5.5 million in restaurant sales, total revenues increased 6.2% over the fourth quarter a year ago. Total restaurant sales decreased 2.0% to $69.8 million from $71.2 million in the same quarter of the previous year. On a comparable 12-week basis, Company-wide comparable restaurant sales decreased 2.2%, including 0.6% at Benihana teppanyaki, 8.4% at RA Sushi, and 2.9% at Haru.

"In our fiscal fourth quarter, we were confronted with soft comparable sales, particularly in certain markets, and coupled with higher operating costs, experienced sales deleveraging. Our guests are certainly being challenged in the current environment, and we have therefore stepped up our marketing efforts to emphasize both the distinct Benihana experience provided by our legendary chefs, along with the value we offer at all of our concepts. While we cannot control the broader economic climate, we are doing our best to navigate through these times, accentuate our strengths and remain true to what has made us so successful and relevant to the dining public for so long," said Joel A. Schwartz, Chairman and Chief Executive Officer.

During the fiscal fourth quarter 2008, the Company opened a Benihana teppanyaki restaurant in Dulles, VA and RA Sushi restaurants in Baltimore, MD and Plano, TX. The Company also reopened Benihana teppanyaki restaurants in San Diego, CA and Dallas, TX which had been closed for remodeling, while four Benihana teppanyaki restaurants in Cupertino, CA; Newport Beach, CA; Denver, CO, and Houston, TX were closed for most or all of the entire 12-week period. The Houston, TX location has subsequently reopened, and the Denver, CO location is reopening today. In addition, the Memphis, TN Benihana teppanyaki restaurant was destroyed by a fire, but the Company will begin rebuilding this location within the next 30 days using its expanded prototype design.

There were a total of 971 store-operating weeks in the fourth fiscal quarter of 2008 compared to 975 store-operating weeks in the fourth fiscal quarter of 2007 (900 store-operating weeks excluding the additional operating week in the fourth quarter last year).

Restaurant operating profit for the fiscal fourth quarter 2008 was $9.7 million, or 13.9% of restaurant sales, compared to $12.1 million, or 17.0% of restaurant sales a year-ago.

Marketing, general and administrative expenses for the fiscal fourth quarter 2008 totaled $6.8 million, or 9.8% of restaurant sales, compared to $6.2 million, or 8.7% of restaurant sales in the same period last year. This resulted in income from operations of $2.6 million and $5.9 million, respectively.

Net income for the fiscal fourth quarter 2008 was $2.9 million, or $0.17 in diluted earnings per share, compared to $4.1 million, or $0.23 in diluted earnings per share in the same quarter last year.

Fiscal 2008 Results

Total revenues for the 52-week fiscal 2008 increased 8.9% to $296.9 million, compared to $272.6 million in the 53-week fiscal 2007. Total restaurant sales increased 8.9% to $295.2 million, compared to $271.1 million. During fiscal 2007, the Company realized an additional 75 store-operating weeks due to the 53-week fiscal year. Excluding these store-operating weeks, which resulted in $5.5 million in restaurant sales, total revenues increased 11.1% over the year-ago period.

For fiscal 2008, on a comparable fifty-two week basis, Company-wide comparable restaurant sales increased 2.4%, including 2.9% at Benihana teppanyaki, (1.0%) at RA Sushi, and 3.6% at Haru.

Net income for fiscal 2008 was $12.8 million, or $0.75 in diluted earnings per share, compared to $14.5 million, or $0.84 in diluted earnings per share in fiscal 2007.

Guidance

Mr. Schwartz continued, "In our current fiscal 2009, we intend to complete our multi-year remodeling program, which is essential to putting our existing restaurants in their best physical condition and ensuring our competitiveness within the restaurant sector. We will also forge ahead with our new restaurant development activities as we take advantage of the many opportunities we have in the marketplace to extend our leadership in Japanese theme and sushi dining."


The Company is providing the following guidance for fiscal 2009:

-- Total restaurant sales of $313 million to $318 million, and
4,500 to 4,600 in total restaurant operating weeks (including
the effect of 90 to 115 in gross operating weeks that are
expected to be lost due to the Benihana teppanyaki renovation
and revitalization program, which should be completed in the
current fiscal year);

-- The opening of four Benihana teppanyaki restaurants and seven
RA Sushi restaurants, with the majority of openings in the
second half of the fiscal year;

-- A total of $0.5 million in accelerated depreciation costs,
related to shortening the useful lives for those restaurants
affected by the Company's remodeling efforts, which will be
incurred in the first half of the fiscal year;

-- Capital expenditures of approximately $60 million during the
fiscal 2009;

-- Additional utilization of approximately $30 million of the
available line of credit, resulting in an outstanding balance
of approximately $50 million by the end of fiscal 2009;

-- Diluted earnings per share ranging from $0.60 to $0.65.
Diluted common shares outstanding are estimated to be
approximately 17.2 million.


Mr. Schwartz concluded, "As we inaugurate annual earnings guidance, we understand the challenges we face in fiscal 2009, but are confident in our positioning across all three brands, including initiatives designed to generate both top-line growth, manage our operations more efficiently without compromising the guest experience, and begin to leverage our G&A expenses towards the end of the fiscal year. We believe our cost-saving efforts will pay dividends for many years to come, particularly when the economic climate improves."

Conference Call Today

The Company will hold a conference call to discuss its fiscal fourth quarter and full year 2008 results today at 5:00 PM ET. The conference call can be accessed live over the phone by dialing 1-888-715-1394, or for international callers, 1-913-312-1417. A replay will be available one hour after the call through June 19, 2008 and can be accessed by dialing 1-888-203-1112, or for international callers, 1-719-457-0820; the conference ID is 2795634. 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 88 restaurants nationwide, including 60 Benihana teppanyaki restaurants, nine Haru sushi restaurants, and nineteen RA Sushi Bar restaurants. Under development at present are fifteen restaurants - eight Benihana teppanyaki restaurants and seven 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
------------------
1-Apr-
30-Mar-08 07 $ Change % Change
-------------------------------------

Revenues
Restaurant sales $69,796 $71,234 ($1,438) -2.0%
Franchise fees and royalties 432 391 41 10.5%
-------------------------------------
Total revenues 70,228 71,625 (1,397) -2.0%
-------------------------------------

Costs and Expenses
Cost of food and beverage sales 16,686 17,433 (747) -4.3%
Restaurant operating expenses 43,406 41,660 1,746 4.2%
Restaurant opening costs 752 461 291 63.1%
Marketing, general and
administrative expenses 6,818 6,183 635 10.3%
-------------------------------------
Total operating expenses 67,662 65,737 1,925 2.9%
-------------------------------------

Income from operations 2,566 5,888 (3,322) -56.4%
Interest income, net 12 180 (168) -93.3%
-------------------------------------

Income before income taxes 2,578 6,068 (3,490) -57.5%
Income tax (benefit) expense (329) 1,996 (2,325) -116.5%
-------------------------------------

Net income 2,907 4,072 (1,165) -28.6%
Less: accretion of issuance
costs and preferred stock
dividends 250 270 (20) -7.4%
-------------------------------------

Net income attributable to
common stockholders $ 2,657 $ 3,802 $ (1,145) -30.1%
=====================================

Earnings Per Share
Basic earnings per common share $ 0.17 $ 0.25 $ (0.08) -32.0%
=====================================
Diluted earnings per common
share $ 0.17 $ 0.23 $ (0.06) -26.1%
=====================================

Weighted Average Shares
Outstanding
Basic 15,258 14,919 339 2.3%
=====================================
Diluted 17,252 17,387 (135) -0.8%
=====================================


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

(in thousands except per share data)
Thirteen Periods
Ended
------------------
30-Mar-08 1-Apr-07 $ Change % Change
------------------------------------

Revenues
Restaurant sales $295,190 $271,080 $24,110 8.9%
Franchise fees and royalties 1,756 1,569 187 11.9%
------------------------------------
Total revenues 296,946 272,649 24,297 8.9%
------------------------------------

Costs and Expenses
Cost of food and beverage sales 69,727 66,051 3,676 5.6%
Restaurant operating expenses 178,099 159,456 18,643 11.7%
Restaurant opening costs 3,440 1,535 1,905 124.1%
Marketing, general and
administrative expenses 28,092 23,811 4,281 18.0%
------------------------------------
Total operating expenses 279,358 250,853 28,505 11.4%
------------------------------------

Income from operations 17,588 21,796 (4,208) -19.3%
Interest income, net 270 465 (195) -41.9%
------------------------------------

Income before income taxes 17,858 22,261 (4,403) -19.8%
Income tax expense 5,065 7,766 (2,701) -34.8%
------------------------------------

Net income 12,793 14,495 (1,702) -11.7%
Less: accretion of issuance costs
and preferred stock dividends 1,084 1,104 (20) -1.8%
------------------------------------

Net income attributable to common
stockholders $ 11,709 $ 13,391 $(1,682) -12.6%
====================================

Earnings Per Share
Basic earnings per common share $ 0.77 $ 0.90 $ (0.13) -14.4%
====================================
Diluted earnings per common share $ 0.75 $ 0.84 $ (0.09) -10.7%
====================================

Weighted Average Shares
Outstanding
Basic 15,173 14,841 332 2.2%
====================================
Diluted 17,169 17,277 (108) -0.6%
====================================


Benihana Inc. and Subsidiaries
Sales by Concept
(Unaudited)

(in thousands)
Three Periods
Ended
----------------
30-Mar- 1-Apr-
08 07 $ Change % Change
-----------------------------------

Total restaurant sales by concept:
Benihana $ 49,565 $52,492 ($2,927) -5.6%
Haru 8,553 7,883 670 8.5%
RA Sushi 11,678 10,859 819 7.5%
Sushi Doraku - - - 0.0%
-----------------------------------
Total restaurant sales $ 69,796 $71,234 ($1,438) -2.0%
===================================


Comparable restaurant sales by
concept:
Benihana $ 41,087 $41,322 ($235) -0.6%
Haru 7,056 7,267 (211) -2.9%
RA Sushi 9,124 9,958 (834) -8.4%
Sushi Doraku - - - 0.0%
-----------------------------------
Total comparable restaurant sales $ 57,267 $58,547 ($1,280) -2.2%
===================================


Benihana Inc. and Subsidiaries
Sales by Concept
(Unaudited)

(in thousands)
Thirteen Periods
Ended
-------------------
30-Mar-08 1-Apr-07 $ Change % Change
---------------------------------------

Total restaurant sales by
concept:
Benihana $215,716 $200,248 $ 15,468 7.7%
Haru 34,509 31,661 2,848 9.0%
RA Sushi 44,965 38,986 5,979 15.3%
Sushi Doraku - 185 (185) -100.0%
---------------------------------------
Total restaurant sales $295,190 $271,080 $ 24,110 8.9%
=======================================


Comparable restaurant sales by
concept:
Benihana $186,602 $181,278 $ 5,324 2.9%
Haru 32,160 31,045 1,115 3.6%
RA Sushi 37,694 38,089 (395) -1.0%
Sushi Doraku - - - 0.0%
---------------------------------------
Total comparable restaurant
sales $256,456 $250,412 $ 6,044 2.4%
=======================================


Benihana Inc. and Subsidiaries
Restaurant Operating Profit
(Unaudited)

(in thousands)
Three Periods Ended
-------------------
30-Mar-08 1-Apr-07 $ Change % Change
--------------------------------------

Restaurant sales $ 69,796 $ 71,234 ($1,438) -2.0%
Cost of food & beverage sales 16,686 17,433 (747) -4.3%
--------------------------------------
Gross profit 53,110 53,801 (691) -1.3%
--------------------------------------

Restaurant operating expenses:
Labor and related costs 24,195 24,386 (191) -0.8%
Restaurant supplies 1,674 1,550 124 8.0%
Credit card discounts 1,311 1,320 (9) -0.7%
Utilities 2,008 1,740 268 15.4%
Occupancy costs 4,236 4,432 (196) -4.4%
Depreciation and amortization 4,118 3,070 1,048 34.1%
Other restaurant operating
expenses 5,864 5,162 702 13.6%
--------------------------------------
Total restaurant operating
expenses 43,406 41,660 1,746 4.2%
--------------------------------------

Restaurant operating profit $ 9,704 $ 12,141 ($2,437) -20.1%
======================================


Benihana Inc. and Subsidiaries
Restaurant Operating Profit
(Unaudited)

(in thousands)
Thirteen Periods
Ended
-------------------
30-Mar-08 1-Apr-07 $ Change % Change
-------------------------------------

Restaurant sales $ 295,190 $ 271,080 $ 24,110 8.9%
Cost of food & beverage sales 69,727 66,051 3,676 5.6%
-------------------------------------
Gross profit 225,463 205,029 20,434 10.0%
-------------------------------------

Restaurant operating expenses:
Labor and related costs 100,655 91,903 8,752 9.5%
Restaurant supplies 6,841 6,120 721 11.8%
Credit card discounts 5,592 5,020 572 11.4%
Utilities 7,926 6,917 1,009 14.6%
Occupancy costs 17,620 16,523 1,097 6.6%
Depreciation and amortization 16,595 13,369 3,226 24.1%
Other restaurant operating
expenses 22,870 19,604 3,266 16.7%
-------------------------------------
Total restaurant operating
expenses 178,099 159,456 18,643 11.7%
-------------------------------------

Restaurant operating profit $ 47,364 $ 45,573 $ 1,791 3.9%
=====================================


Benihana Inc. and Subsidiaries
Restaurant Operating Margins
(Unaudited)

Three Periods Ended
---------------------
30-Mar-08 1-Apr-07
---------------------

Restaurant sales 100.00% 100.00%
Cost of food and beverage sales 23.91% 24.47%
---------------------
Gross profit margin 76.09% 75.53%
---------------------

Restaurant operating expenses:
Labor and related costs 34.67% 34.23%
Restaurant supplies 2.40% 2.18%
Credit card discounts 1.88% 1.85%
Utilities 2.88% 2.44%
Occupancy costs 6.07% 6.22%
Depreciation and amortization 5.90% 4.31%
Other restaurant operating expenses 8.40% 7.25%
---------------------
Total restaurant operating expenses 62.19% 58.48%
---------------------

Restaurant operating profit margin 13.90% 17.04%
=====================


Benihana Inc. and Subsidiaries
Restaurant Operating Margins
(Unaudited)

Thirteen Periods Ended
-------------------------
30-Mar-08 1-Apr-07
-------------------------

Restaurant sales 100.00% 100.00%
Cost of food and beverage sales 23.62% 24.37%
-------------------------
Gross profit margin 76.38% 75.63%
-------------------------

Restaurant operating expenses:
Labor and related costs 34.10% 33.90%
Restaurant supplies 2.32% 2.26%
Credit card discounts 1.89% 1.85%
Utilities 2.69% 2.55%
Occupancy costs 5.97% 6.10%
Depreciation and amortization 5.62% 4.93%
Other restaurant operating expenses 7.75% 7.23%
-------------------------
Total restaurant operating expenses 60.33% 58.82%
-------------------------

Restaurant operating profit margin 16.05% 16.81%
=========================


Benihana Inc. and Subsidiaries
Balance Sheet Data
(Unaudited)

(in thousands)
30-Mar-08 1-Apr-07
---------------------------

Assets
Cash and cash equivalents $ 1,718 $ 8,449
Other current assets 17,897 13,085
---------------------------
Total current assets 19,615 21,534

Property and equipment, net 184,176 146,479
Goodwill 29,900 29,900
Other assets 7,963 6,376
---------------------------

$ 241,654 $ 204,289
===========================

Liabilities and Stockholders' Equity
Other current liabilities $ 35,102 $ 33,835
---------------------------
Total current liabilities 35,102 33,835

Long-term debt--bank 17,422 -
Other liabilities 12,065 8,611
---------------------------
Total liabilities 64,589 42,446

Convertible preferred stock 19,449 19,361
Total stockholders' equity 157,616 142,482
---------------------------

$ 241,654 $ 204,289
===========================



SOURCE: Benihana Inc.

###

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