Benihana Inc. Reports Fiscal First Quarter 2010 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 16-week fiscal first quarter ended July 19, 2009.

Fiscal First Quarter 2010 Results

Richard C. Stockinger, Chief Executive Officer, said, "We are operating our business in perhaps the most difficult environment we have seen in decades, and the economic downturn continues to take its toll on our industry."

"As previously announced, we have formulated a comprehensive strategy to rebuild sales momentum through the Benihana Renewal Program and are confident that over time, we can improve guest perceptions of Benihana Teppanyaki as it relates to five key attributes of the dining experience: image, value, quality, consistency, and lack of Japan. We are improving the quality of the food and beverages, raising the level of our service standards, and creating more awareness and closer relationships with our guests so that they will celebrate their special occasions as well as their more routine 'dining-out' experiences with us. With the successful implementation of these initiatives, we are confident that we will pull through and emerge with a much stronger Benihana brand."

"We are pleased with the recent performance of RA Sushi, which has turned in positive comparable sales during the quarter, and was also able to expand its restaurant operating margins."

For fiscal first quarter of 2010, total revenues increased 1.6% to $96.0 million, compared to $94.5 million in fiscal first quarter 2009. Total restaurant sales increased 1.6% to $95.5 million in the fiscal first quarter 2010 from $93.9 million in the fiscal first quarter 2009.

For the fiscal first quarter 2010, Company-wide comparable restaurant sales were (10.1%), comprised of (13.1%) at Benihana Teppanyaki, 3.5% at RA Sushi, and (14.8%) at Haru. During the period, Benihana Teppanyaki represented approximately 66.2% of consolidated restaurant sales, while RA Sushi and Haru accounted for 23.2% and 10.6% of consolidated restaurant sales, respectively. There were a total of 1,532 store-operating weeks in the fiscal first quarter 2010 compared to 1,348 store-operating weeks in the fiscal first quarter 2009.

Restaurant operating profit for the fiscal first quarter of 2010 was $12.2 million, or 12.8% of restaurant sales, compared to $12.4 million, or 13.2% of restaurant sales a year-ago.

Marketing, general and administrative expenses for the fiscal first quarter of 2010 totaled $9.8 million, or 10.3% of restaurant sales, compared to $8.8 million, or 9.3% of restaurant sales in the same period last year.

Income from operations was $2.0 million for the fiscal first quarter of 2010, compared to income from operations of $3.4 million in the prior year quarter.

Net income for the fiscal first quarter of 2010 was $1.1 million, or $0.05 in diluted earnings per share, compared to net income of $2.2 million, or $0.12 in diluted earnings per share in the same quarter last year.

In the fiscal first quarter of 2010, the Company opened two RA Sushi restaurants in Atlanta, Georgia and Houston, Texas, and one Benihana Teppanyaki restaurant in Orlando, Florida.

The Company has completed its development plans for the fiscal year with the opening of a RA Sushi restaurant in Leawood, Kansas during the fiscal second quarter.

After the close of business yesterday, Sunday, August 30th, the Company closed its Benihana teppanyaki restaurant located in the Georgetown area of Washington, D.C.

Fiscal Year 2010 Guidance

The Company is reiterating the following guidance for fiscal year 2010:

  • Total restaurant sales of $305 million to $310 million. Total restaurant operating weeks are estimated to be between 5,000 and 5,075;
  • Four new restaurants, including one Benihana Teppanyaki and three RA Sushi restaurants, which have all opened;
  • Cost of sales, as a percentage of sales, will hold steady to fiscal year 2009 average levels with the rollout of enhanced menu items at Benihana teppanyaki, beginning in the second fiscal quarter;
  • Capital expenditures of approximately $15 million;
  • Reduction in outstanding debt by approximately $6 million, resulting in an outstanding balance of approximately $27.5 million;
  • Diluted earnings per share of $0.40 to $0.45. Diluted common shares outstanding are estimated to be approximately 18.7 million shares.


Conference Call Today

The Company will hold a conference call to discuss its fiscal first quarter 2010 results today at 5:00 PM ET. The conference call can be accessed live over the phone by dialing 1-888-218-8172, or for international callers, 1-913-312-0640. A replay will be available one hour after the call through September 7, 2009 and can be accessed by dialing 1-888-203-1112, or for international callers, 1-719-457-0820; the conference ID is 3410807. 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) (Nasdaq: BNHN) operates 98 restaurants nationwide, including 64 Benihana Teppanyaki restaurants, nine Haru sushi restaurants, and 25 RA Sushi Bar restaurants. Under development at present is one Benihana Teppanyaki restaurant. In addition, 22 franchised Benihana Teppanyaki restaurants are operating in the U.S., Latin America and the Caribbean.

Benihana Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(Unaudited)
(in thousands except per share data)
Four Periods Ended
19-Jul-09 20-Jul-08 $ %
Change Change
Revenues
Restaurant sales $ 95,465 $ 93,925 $ 1,540 1.6 %
Franchise fees and royalties 507 535 (28 ) -5.2 %
Total revenues 95,972 94,460 1,512 1.6 %
Costs and Expenses
Cost of food and beverage sales 22,358 22,600 (242 ) -1.1 %
Restaurant operating expenses 60,910 58,920 1,990 3.4 %
Restaurant opening costs 903 735 168 22.9 %
Marketing, general and administrative expenses 9,821 8,776 1,045 11.9 %
Total operating expenses 93,992 91,031 2,961 3.3 %
Income from operations 1,980 3,429 (1,449 ) -42.3 %
Interest expense, net (397 ) (56 ) (341 ) 608.9 %
Income before income taxes 1,583 3,373 (1,790 ) -53.1 %
Income tax provision 491 1,181 (690 ) -58.4 %
Net income 1,092 2,192 (1,100 ) -50.2 %
Less: accretion of issuance costs and preferred stock dividends 333 334 (1 ) -0.3 %
Net income attributable to common stockholders $ 759 $ 1,858 $ (1,099 ) -59.1 %
Earnings Per Share
Basic earnings per common share $ 0.05 $ 0.12 $ (0.07 ) 58.3 %
Diluted earnings per common share $ 0.05 $ 0.12 $ (0.07 ) 58.3 %
Weighted Average Shares Outstanding
Basic 15,352 15,279 73 0.5 %
Diluted 15,374 18,595 (3,221 ) -17.3 %

Benihana Inc. and Subsidiaries
Sales by Concept
(Unaudited)
(in thousands)
Four Periods Ended
19-Jul-09 20-Jul-08 $ %
Change Change
Total restaurant sales by concept:
Benihana $ 63,224 $ 64,233 $ (1,009 ) -1.6 %
RA Sushi 22,107 17,803 4,304 24.2 %
Haru 10,134 11,889 (1,755 ) -14.8 %
Total restaurant sales $ 95,465 $ 93,925 $ 1,540 1.6 %
Comparable restaurant sales by concept:
Benihana $ 55,919 $ 64,317 $ (8,398 ) -13.1 %
RA Sushi 18,431 17,803 628 3.5 %
Haru 10,134 11,889 (1,755 ) -14.8 %
Total comparable restaurant sales $ 84,484 $ 94,009 $ (9,525 ) -10.1 %

Benihana Inc. and Subsidiaries
Restaurant Operating Profit
(Unaudited)
(in thousands)
Four Periods Ended
19-Jul-09 20-Jul-08 $ %
Change Change
Restaurant sales $ 95,465 $ 93,925 $ 1,540 1.6 %
Cost of food & beverage sales 22,358 22,600 (242 ) -1.1 %
Gross profit 73,107 71,325 1,782 2.5 %
Restaurant operating expenses:
Labor and related costs 33,316 33,606 (290 ) -0.9 %
Restaurant supplies 2,512 2,295 217 9.5 %
Credit card discounts 1,813 1,795 18 1.0 %
Utilities 2,773 2,727 46 1.7 %
Occupancy costs 6,468 5,811 657 11.3 %
Depreciation and amortization 5,663 5,581 82 1.5 %
Other restaurant operating expenses 8,365 7,105 1,260 17.7 %
Total restaurant operating expenses 60,910 58,920 1,990 3.4 %
Restaurant operating profit $ 12,197 $ 12,405 $ (208 ) -1.7 %

Benihana Inc. and Subsidiaries
Restaurant Operating Margins
(Unaudited)
Four Periods Ended
19-Jul-09 20-Jul-08
Restaurant sales 100.00% 100.00%
Cost of food and beverage sales 23.42% 24.06%
Gross profit margin 76.58% 75.94%
Restaurant operating expenses:
Labor and related costs 34.90% 35.78%
Restaurant supplies 2.63% 2.44%
Credit card discounts 1.90% 1.91%
Utilities 2.90% 2.90%
Occupancy costs 6.78% 6.19%
Depreciation and amortization 5.93% 5.94%
Other restaurant operating expenses 8.76% 7.56%
Total restaurant operating expenses 63.80% 62.73%
Restaurant operating profit margin 12.78% 13.21%

Benihana Inc. and Subsidiaries
Balance Sheet Data
(Unaudited)
(in thousands)
19-Jul-09 29-Mar-09
Assets
Cash and cash equivalents $ 2,253 $ 3,891
Other current assets 13,677 13,621
Total current assets 15,930 17,512
Property and equipment, net 202,916 203,299
Goodwill 18,020 18,020
Other assets 18,031 18,296
$ 254,897 $ 257,127
Liabilities and Stockholders' Equity
Other current liabilities $ 35,373 $ 36,566
Total current liabilities 35,373 36,566
Long-term debt--bank 30,855 33,351
Other liabilities 15,264 15,237
Total liabilities 81,492 85,154
Convertible preferred stock 19,562 19,536
Total stockholders' equity 153,843 152,437
$ 254,897 $ 257,127


SOURCE: Benihana Inc.

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