Rubio's Restaurants Reports Fourth Quarter and Fiscal 2009 Results
Record Fiscal Year 2009 Revenues of $189 Million Up 5% Year-Over-Year; Record Fiscal Year 2009 Adjusted EBITDA of $13.1 Million or $1.30 per Share
CARLSBAD, CA, Mar 26, 2010 (MARKETWIRE via COMTEX) -- Rubio's(R) Restaurants, Inc. (NASDAQ: RUBO) reported financial results for the fourth quarter and fiscal year ended December 27, 2009.
Fourth Quarter and Fiscal 2009 Financial Highlights
Revenues in the fourth quarter of 2009 totaled $45.4 million, an increase of 1% from $45.0 million reported in the same year-ago quarter. Revenue for the full year of 2009 totaled a record $188.9 million, up 5% from $179.3 million in the same year-ago period.
Net loss was $852,000 or $(0.08) per share in the fourth quarter of 2009 versus a net loss of $295,000 or $(0.03) per basic and diluted share in the same year-ago quarter. The fourth quarter of 2009 included an asset impairment charge of $683,000 or a tax-effected $(0.04) per share and non-recurring expenses associated with the ongoing evaluation of strategic alternatives of $211,000 or a tax-effected $(0.01) per share. Net loss before non-cash impairment charges and non-recurring expenses associated with the ongoing evaluation of strategic alternatives was $311,000 or $(0.03) in the fourth quarter of 2009, versus a net loss of $295,000 or $(0.03) per share in the same year-ago quarter, during which there were no impairment charges.
Fiscal 2009 net income was $392,000 or $0.04 per basic and diluted share versus net income of $84,000 or $0.01 per diluted share in the same year-ago period. Net income in the full year of 2009 included asset impairment charges of $1.1 million or a tax-effected $(0.06) per basic and diluted share and non-recurring expenses associated with the ongoing evaluation of strategic alternatives of $211,000 or a tax-effected $(0.02) per basic and diluted share, versus a store closure reversal credit of $46,000 or $0.00 per diluted share in 2008. Fiscal 2009 net income before non-cash impairment charges and non-recurring expenses associated with the ongoing evaluation of strategic alternatives was $1.2 million or $0.12 per basic and diluted share. The asset impairment charges in both the fourth quarter and full year 2009 relate to units targeted for closure upon lease expiration and units concentrated in areas particularly hard-hit by the economic downturn.
Adjusted EBITDA (a non-GAAP measure as defined below), was $2.4 million or $0.24 per basic and diluted share in the fourth quarter of 2009, versus $2.6 million or $0.26 per basic and diluted share in the same year-ago period. Excluding the above-mentioned $211,000 in non-recurring expenses in Q4 of 2009, adjusted EBITDA was $2.6 million or $0.26 per basic and diluted share in both the fourth quarter of 2009 and in the same year-ago period. For the full year of 2009, adjusted EBITDA was a record $13.1 million or $1.30 per diluted share, versus $11.6 million or $1.16 per diluted share in the same year-ago period. Excluding the aforementioned $211,000 in non-recurring expenses, adjusted EBITDA was a record $13.3 million or $1.32 per basic and diluted share, up 14% from $11.6 million or $1.16 per diluted share in the same year-ago period.
Cash and cash equivalents at December 27, 2009 totaled $9.5 million, up 29% from $7.4 million in the previous quarter and up 64% from $5.8 million at the end of fiscal 2008.
Fourth Quarter and Fiscal 2009 Operating Highlights
Comparable store sales (stores operating for more than 15 months) decreased 2.7% in the fourth quarter of 2009 versus a comparable store sales decrease of 0.2% in the same quarter last year. Comparable store sales for fiscal 2009 decreased 0.7% versus a comparable store sales decrease of 2.4% in 2008. In both the fourth quarter and full year 2009, the impact of decreased transaction volume more than offset an increase in the average check per customer.
Average unit volume was slightly less than $1.0 million, which was virtually unchanged from the same year-ago quarter.
Restaurant operating margin (a non-GAAP measure as defined below) was 17.1%, as compared to 15.3% in the same year-ago quarter. For fiscal 2009, restaurant operating margin was 16.4% as compared to 15.9% in 2008.
In the fourth quarter of 2009, as a percentage of restaurant sales, restaurant labor cost increased by 90 basis points and restaurant occupancy and other costs rose by 60 basis points versus the same quarter last year, while cost of sales decreased by 330 basis points. The increase in restaurant labor cost as a percentage of sales was primarily attributable to deleveraging manager salaries caused by decreased comp sales. The increase in restaurant occupancy and other costs was primarily due to higher rent and common area maintenance charges. The decrease in cost of sales as a percentage of sales was driven primarily by the impact of menu price increases that the company was able to leverage in combination with favorable supply agreements and product reformulation efforts.
General and administrative expenses for the fourth quarter of 2009 were $5.8 million, as compared to $4.4 million in the same year-ago quarter. As a percentage of sales, general and administrative expenses increased to 12.7% from 9.7% for the same period last year. The quarter-over-quarter increase was due to increased incentive compensation resulting from the record annual adjusted EBITDA performance, professional fees associated with the ongoing process of evaluating strategic alternatives and increased bad debt expense. As a percentage of sales, general and administrative expenses before non-recurring expenses mentioned above were 9.9% for the full year of 2009 as compared to 10.0% for 2008.
Rubio's opened one restaurant in the fourth quarter of 2009, as compared to five in the same period a year-ago, increasing the total to ten units opened during 2009. Pre-opening expenses in the fourth quarter of 2009 were $14,000, a decrease of 93% from $201,000 in the same quarter last year.
Management Commentary
"Despite a still challenging economy, we have continued to drive both sales and cash generation, closing the fiscal year with record annual revenues and adjusted EBITDA," said Dan Pittard, Rubio's president and CEO. "I'm particularly pleased that we were able to improve restaurant level operating margin from 15.3% in Q4 2008 to 17.1% in Q4 2009, which resulted in flat quarter-over-quarter adjusted EBITDA despite the decrease in comparable store sales. We attribute our success to extremely tight cost control and our continued focus on implementing our winning strategy for the Fast Casual restaurant segment -- still the fastest growing segment of the restaurant industry.
"Our market research confirms our guests understand our value proposition, and it resonates particularly well with our customers in this economy. They appreciate that we provide an attractive casual ambiance along with a menu selection priced significantly below casual dining price points. We believe we are very well-positioned to build our customer base as the economy improves.
"Our fourth quarter performance reflected its typical seasonality, which has been traditionally the low water mark for the year. However, Q4 also continued the tradition of surpassing the revenue of the previous year's fourth quarter, making Q4 2009 another record revenue fourth quarter. As the first quarter of 2010 approaches its close, we are seeing the traditional seasonal sales increase following the fourth quarter."
Rubio's CFO Frank Henigman commented: "Our balance sheet remains strong, ending fiscal year 2009 with $9.5 million in cash and no debt. We generated $11.3 million in operating cash flow for the year, which provided the opportunity to build cash during the year while pursuing expansion plans that were tempered due to the economic environment."
Conference Call
Rubio's will host a conference later today (March 26, 2010) at 1:30 p.m. Eastern time (10:30 a.m. Pacific time) to discuss the financial results for the quarter and full year of 2009.
The conference call will be broadcast simultaneously and available for replay via the investor section of the company's Web site at www.rubios.com. If you have any difficulty connecting with the conference broadcast, please contact the Liolios Group at 1-949-574-3860.
About the Presentation of Non-GAAP Financial Information
Regulation G, "Disclosure of Non-GAAP Financial Measures," and other provisions of the Securities Exchange Act of 1934, as amended, define and prescribe the conditions for use of certain non-GAAP financial information. The company provides two non-GAAP financial measures, "restaurant operating margins" and "adjusted EBITDA."
The company uses restaurant operating margins to evaluate the performance of its restaurants. Restaurant operating margin is calculated by dividing (i) restaurant sales less cost of sales, restaurant labor and restaurant occupancy and other by (ii) restaurant sales.
The company also provides adjusted EBITDA, which is not a recognized term under GAAP and does not purport to be an alternative to income from operations or net income or a measure of liquidity. The company's management uses adjusted EBITDA as a measure of operating performance and in their evaluation of funding requirements for future development and other needs. Adjusted EBITDA is calculated as net income (loss) plus (less) income tax expense (benefit), plus interest, net, plus loss on disposal/sale of property, plus asset impairment and store closure expense or less store closure reversal, plus depreciation and amortization, plus share-based compensation expense.
The differences between adjusted EBITDA and GAAP net income for the 13-week quarters and 52-weeks of 2008 and 2009 are indicated as follows:
For the Thirteen Weeks Ended
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2008 Q2 2008 Q3 2008 Q4 2008
------- ------- ------- ------ ------ ------- ------- ------
Net income
(loss) 245 512 487 (852) (745) 335 789 (295)
Income tax
expense
(benefit) 150 214 151 (451) (497) 244 413 (165)
Interest
expense
(income)
and
investment
(income),
net 33 38 21 37 (1) 32 42 60
Loss on
disposal/
sale of
property 85 99 75 110 104 58 57 76
Asset
impairment
and store
closure
expense
(reversal) - 359 26 683 (91) 45 - -
Depreciation
and
amortization 2,496 2,449 2,480 2,482 2,259 2,332 2,420 2,641
Share-based
compensation 226 247 264 422 349 361 529 279
------- ------- ------- ------ ------ ------- ------- ------
ADJUSTED
EBITDA $ 3,235 $ 3,918 $ 3,504 $2,431 $1,378 $ 3,407 $ 4,250 $2,596
======= ======= ======= ====== ====== ======= ======= ======
For the Fifty-Two
Weeks Ended
------------------
Q4 2009 Q4 2008
--------- --------
Net income 392 84
Income tax expense (benefit) 64 (5)
Interest expense (income) and investment (income), net 129 133
Loss on disposal/sale of property 369 295
Asset impairment and store closure expense (reversal) 1,068 (46)
Depreciation and amortization 9,907 9,652
Share-based compensation 1,159 1,518
--------- --------
ADJUSTED EBITDA $ 13,088 $ 11,631
========= ========
The differences between adjusted EBITDA including costs incurred for the evaluation of strategic alternatives and GAAP net income for the 13-week quarter and 52-weeks ended December 27, 2009 are indicated as follows:
For the For the
Thirteen Fifty-Two
Weeks Weeks
Ended Ended
-------- ---------
Q4 2009 Q4 2009
-------- ---------
Net (loss) income (852) 392
Income tax expense (benefit) (451) 64
Interest expense (income) and investment (income), net 37 129
Loss on disposal/sale of property 110 369
Asset impairment charge 683 1,068
Depreciation and amortization 2,482 9,907
Share-based compensation 422 1,159
Costs for evaluation of strategic alternatives 211 211
-------- ---------
ADJUSTED EBITDA $ 2,642 $ 13,299
======== =========
The differences between net (loss) income including asset impairment charges and costs incurred for the evaluation of strategic alternatives, and their respective tax effects, and GAAP net income for the 13-week quarter and 52-weeks ended December 27, 2009 are indicated as follows:
For the For the
Thirteen Fifty-Two
Weeks Weeks
Ended Ended
--------- ---------
Q4 2009 Q4 2009
--------- ---------
Net (loss) income (852) 392
Asset impairment charge 683 1,068
Income tax effect of asset impairment charge (270) (422)
Costs for evaluation of strategic alternatives 211 211
Income tax effect of costs for evaluation of
strategic alternatives (83) (83)
--------- ---------
Net (loss) income before charges $ (311) $ 1,166
========= =========
Management believes these non-GAAP financial measures provide important supplemental information to investors. These measures should be used in addition to, and in conjunction with, results presented in accordance with GAAP. These measures should not be relied upon to the exclusion of the company's GAAP financial measures. The company strongly encourages investors to review its financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
About Rubio's(R) Restaurants, Inc. (NASDAQ: RUBO)
Bold, distinctive, Baja-inspired food is the hallmark of Rubio's Fresh Mexican Grill(R). The first Rubio's was opened in 1983 in the Mission Bay community of San Diego by Ralph Rubio and his father, Ray Rubio. Rubio's is credited with introducing fish tacos to Southern California and starting a phenomenon that has spread coast to coast. In addition to chargrilled marinated chicken, lean carne asada steak, and slow-roasted pork carnitas, Rubio's menu features seafood items including grilled mahi mahi and shrimp. Guacamole and a variety of salsas and proprietary sauces are made from scratch daily, and Rubio's uses canola oil with zero grams trans fat per serving. The menu includes tacos, burritos, salads and bowls, quesadillas, HealthMex(R) offerings which are lower in fat and calories, and domestic and imported beer in most locations. Each restaurant design is reminiscent of the relaxed, warm and inviting atmosphere of Baja California, a coastal state of Mexico. Headquartered in Carlsbad, California, Rubio's operates, licenses or franchises more than 195 restaurants in California, Arizona, Colorado, Utah and Nevada.
Safe Harbor Disclosure
Some of the information in this press release or the related conference call may contain forward-looking statements regarding future events or the future financial performance of the company. Please note that any statements that may be considered forward-looking are based on projections; that any projections involve judgment, and that individual judgments may vary. Moreover, these projections are based only on limited information available to us now, which is subject to change. Actual results may differ substantially from any such forward looking statements as a result of various factors, many of which are beyond the company's control, including, among others, the company's comparable store sales results and revenues, the adverse effect the significant downturn in the economy has on the spending and dining out frequency of the company's customers, the company's ability to manage its product, labor expenses and other restaurant costs, the results of the Company's evaluation of its strategic alternatives, the success of the company's promotions, new product offerings and marketing strategies, the company's ability to recruit and retain qualified personnel, adverse effects of weather and natural disasters, the adequacy of the company's reserves related to closed stores or stores to be sold, increased depreciation or asset write downs, the company's ability to manage ongoing and unanticipated costs, such as costs to comply with regulatory compliance and litigation costs, the company's ability to implement a franchise strategy, the company's ability to open additional restaurants in the coming periods that satisfy the company's revenue objectives, the company's ability to successfully resolve the company's class action lawsuits filed in California and the effects of ever-increasing competition. These and other factors can be found in the company's filings with the SEC including, without limitation, in the "Risk Factors" section of the company's most recent Annual Report on Form 10-K. The company undertakes no obligation to release publicly the results of any revision to these forward-looking statements to reflect events or circumstances following the date of this release.
RUBIO'S RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
For the Thirteen For the Fifty-Two
Weeks Ended Weeks Ended
-------------------------- --------------------------
December 27, December 28, December 27, December 28,
2009 2008 2009 2008
------------ ------------ ------------ ------------
RESTAURANT SALES $ 45,417 $ 44,963 $ 188,749 $ 179,130
FRANCHISE AND
LICENSING REVENUES 26 21 129 174
------------ ------------ ------------ ------------
TOTAL REVENUES 45,443 44,984 188,878 179,304
COST OF SALES 11,451 12,824 49,688 51,348
RESTAURANT LABOR 14,884 14,323 61,215 56,621
RESTAURANT
OCCUPANCY AND
OTHER 11,331 10,938 46,863 42,591
GENERAL AND
ADMINISTRATIVE
EXPENSES 5,754 4,381 18,830 17,942
DEPRECIATION AND
AMORTIZATION 2,482 2,641 9,907 9,652
PRE-OPENING
EXPENSES 14 201 353 689
ASSET IMPAIRMENT
AND STORE CLOSURE
EXPENSE (REVERSAL) 683 - 1,068 (46)
LOSS ON
DISPOSAL/SALE OF
PROPERTY 110 76 369 295
------------ ------------ ------------ ------------
OPERATING (LOSS)
INCOME (1,266) (400) 585 212
INTEREST (EXPENSE)
INCOME AND
INVESTMENT INCOME,
NET (37) (60) (129) (133)
------------ ------------ ------------ ------------
(LOSS) INCOME
BEFORE INCOME
TAXES (1,303) (460) 456 79
INCOME TAX
(BENEFIT) EXPENSE (451) (165) 64 (5)
------------ ------------ ------------ ------------
NET (LOSS) INCOME $ (852) $ (295) $ 392 $ 84
============ ============ ============ ============
BASIC EARNINGS DATA
EPS $ (0.08) $ (0.03) $ 0.04 $ 0.01
============ ============ ============ ============
AVERAGE SHARES
OUTSTANDING 10,035 9,951 9,993 9,951
============ ============ ============ ============
DILUTED EARNINGS
DATA
EPS $ (0.08) $ (0.03) $ 0.04 $ 0.01
============ ============ ============ ============
AVERAGE SHARES
OUTSTANDING 10,035 9,951 10,072 10,014
============ ============ ============ ============
RUBIO'S RESTAURANTS, INC.
OPERATING RESULTS AS A PERCENTAGE OF TOTAL REVENUES
(unaudited)
Percentage of Total Percentage of Total
Revenues For the Thirteen Revenues For the Fifty-Two
Weeks Ended Weeks Ended
-------------------------- --------------------------
December 27, December 28, December 27, December 28,
2009 2008 2009 2008
------------ ------------ ------------ ------------
TOTAL REVENUES 100.0% 100.0% 100.0% 100.0%
COST OF SALES (1) 25.2% 28.5% 26.3% 28.7%
RESTAURANT LABOR
(1) 32.8% 31.9% 32.4% 31.6%
RESTAURANT
OCCUPANCY AND
OTHER (1) 24.9% 24.3% 24.8% 23.8%
GENERAL AND
ADMINISTRATIVE
EXPENSES 12.7% 9.7% 10.0% 10.0%
DEPRECIATION AND
AMORTIZATION 5.5% 5.9% 5.2% 5.4%
PRE-OPENING
EXPENSES 0.0% 0.4% 0.2% 0.4%
ASSET IMPAIRMENT
AND STORE CLOSURE
EXPENSE (REVERSAL) 1.5% 0.0% 0.6% 0.0%
LOSS ON
DISPOSAL/SALE OF
PROPERTY 0.2% 0.2% 0.2% 0.2%
OPERATING (LOSS)
INCOME -2.8% -0.9% 0.3% 0.1%
INTEREST (EXPENSE)
INCOME AND
INVESTMENT INCOME,
NET -0.1% -0.1% -0.1% -0.1%
(LOSS) INCOME
BEFORE INCOME
TAXES -2.9% -1.0% 0.2% 0.0%
INCOME TAX
(BENEFIT) EXPENSE -1.0% -0.4% 0.0% 0.0%
NET (LOSS) INCOME -1.9% -0.7% 0.2% 0.0%
(1) As a percentage of restaurant sales
RUBIO'S RESTAURANTS, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December 27, 2009 December 28, 2008
----------------- -----------------
CASH AND SHORT-TERM INVESTMENTS $ 9,544 $ 5,816
OTHER CURRENT ASSETS 9,505 10,913
PROPERTY - NET 43,086 45,947
OTHER ASSETS 12,566 10,473
----------------- -----------------
TOTAL ASSETS $ 74,701 $ 73,149
================= =================
CURRENT LIABILITIES $ 20,947 $ 19,172
OTHER LIABILITIES 6,599 8,591
STOCKHOLDERS' EQUITY 47,155 45,386
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 74,701 $ 73,149
================= =================
SOURCE: Rubio's Restaurants
###
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