CONTACT: William
Koziel
(847)
597-8800
Così, Inc. Reports
2013 Fourth Quarter and Full Year Results
DEERFIELD, IL - April 16, 2014 -
Così, Inc. (NASDAQ: COSI), the fast casual restaurant company today
reported a net loss for the fourth quarter ended December 30, 2013
of $(4,113,000), or $(0.23) per basic and diluted common share,
compared with a net loss of $(2,036,000), or $(0.11) per basic and
diluted common share in the fourth quarter of 2012.
Così's total revenues for the 2013
fourth quarter decreased 11.8% to $19,946,000 from $22,612,000 in
the 2012 fourth quarter. Company-owned restaurant net sales
decreased by 12.2% in the fourth quarter to $19,226,000, compared
to $21,894,000 in the previous year's quarter due to a sales
decline of $1,514,000 from restaurants closed subsequent to the
fourth quarter of 2012 and a 5.7% decrease in comparable restaurant
net sales. Franchise fees and royalty revenues for the 2013
fourth quarter contributed $720,000 compared to $718,000 in the
2012 fourth quarter.
System-wide comparable restaurant
sales for the fourth quarter as measured for restaurants in
operation for more than 15 months recorded an aggregate 4.6%
decrease compared to the fourth quarter of 2012. The
breakdown in comparable sales between Company-owned and
franchise-operated restaurants are as follows:
For the 13 weeks
ended
December 30, 2013
Company-owned
(5.7%)
Franchise-operated
(2.9%)
Total
System
(4.6%)
For the fiscal year ended December
30, 2013 the net loss was $(11,444,000) or $(0.64) per basic and
diluted common share, compared to fiscal 2012, when the net loss
was $(4,441,000), or $(0.29) per basic and diluted common
share.
Così's total revenues for fiscal
2013 decreased 11.9% to $86,327,000 from $97,952,000 in fiscal
2012. Company-owned net restaurant sales declined 12.1% in
fiscal 2013 to $83,338,000, compared to $94,757,000 in fiscal 2012
due to a $6,906,000 decline in net sales related to restaurants
closed during and subsequent to fiscal 2012 and a comparable net
sales decrease of 5.1%. Franchise fees and royalty revenues
for fiscal 2013 contributed $2,989,000 compared to $3,195,000 in
fiscal 2012.
System-wide comparable restaurant
sales for fiscal 2013 as measured for restaurants in operation for
more than 15 months recorded an aggregate 3.9% decline when
compared to fiscal 2012. The breakdown in comparable sales
between Company-owned and franchise-operated restaurants are as
follows:
For the 52 weeks ended
December 30, 2013
Company-owned
(5.1%)
Franchise-operated
(1.8%)
Total
System
(3.9%)
"The simple truth is that these
results are unacceptable," stated RJ Dourney, Così's President and
Chief Executive Officer, "I want to assure our investors,
employees, business partners and guests that as the largest and
longest tenured franchisee of Così, I understand the strengths of
the brand and will act with a determined urgency to rebuild the
brand, effect the strong financial operating model which already
exists in some of the Così system and assemble the right team to
leverage this great brand into a best in class business."
2013 Fourth
Quarter and Full Year Financial Performance Review
For the fourth quarter, Così reported a 950 basis point increase in
costs and expenses related to Company-owned restaurant operations
as a percentage of restaurant net sales compared to the fourth
quarter of 2012. The change resulted from increases of 460, 360 and
130 basis points, as a percentage of restaurant net sales, in
occupancy and other restaurant operating expenses, labor and
related benefits, and cost of food and beverage, respectively. The
increase in occupancy and other restaurant operating expenses was
due primarily to the deleveraging impact of the comparable
restaurant net sales decline on the fixed portion of these costs in
the quarter as well as to higher costs for repairs and maintenance
of existing restaurants during the period when compared to the
prior year quarter. The increase in labor and related benefits was
largely due to the deployment of additional hourly labor as part of
an initiative to increase speed of service and guest satisfaction
coupled with the impact of the decline in comparable restaurant net
sales. The increase in cost of food and beverage was largely due to
a shift in sales mix, the impact of higher costs on certain
seasonal promotional items, higher costs on certain commodities and
the impact of a higher mix of breakfast sales which have a higher
cost as a percent to sales coupled with a decline in beverage sales
which have a lower cost as a percent to sales.
During the 2013 fourth quarter,
the Company reported general and administrative expense of
$3,283,000 or 16.5% of total revenues as compared to $2,947,000 or
13.0% for the 2012 fourth quarter. The increase in expense
for 2013 as compared to 2012 was due primarily to a reserve
recorded in the quarter related to a note receivable from a
franchisee as well as higher marketing costs when compared to the
prior year quarter.
For the 2013 full year, Così
reported a 700 basis point increase in costs and expenses related
to Company-owned restaurant operations as a percentage of
restaurant net sales compared to 2012. The change resulted from
increases of 280, 270 and 150 basis points, as a percentage of
restaurant net sales, in occupancy and other restaurant operating
expenses, labor and related benefits and cost of food and beverage,
respectively.
During fiscal 2013, general and
administrative expenses increased slightly to $11,746,000 from
$11,641,000 due primarily to a charge for severance pay resulting
from administrative workforce reductions and a reserve recorded in
the fourth quarter related to a note receivable from a
franchisee.
Così reported that as of December
30, 2013 it had cash and cash equivalents of $6,021,000 and
virtually no debt other than lease obligations.
About Così,
Inc.
Così®
(http://www.getcosi.com) is a national fast casual restaurant chain
that has developed featured foods built around a secret,
generations-old recipe for crackly crust flatbread. This artisan
bread is freshly baked in front of customers throughout the day in
open-flame stone-hearth ovens prominently located in each of the
restaurants. Così's warm and urbane atmosphere is geared towards
its sophisticated, upscale, urban and suburban guests. There are
currently 72 Company-owned and 49 franchise restaurants operating
in sixteen states, the District of Columbia, Costa Rica and the
United Arab Emirates. The Così® vision is to
become America's favorite fast casual restaurant by providing
customers authentic, innovative, savory food while remaining an
affordable luxury.
The Così® menu features
Così® sandwiches,
freshly-tossed salads, bowls, breakfast wraps, melts, soups,
Così®
Squagels®, flatbread
pizzas, S'mores, snacks and other desserts, and a wide range of
coffee and coffee-based drinks and other specialty beverages.
Così® restaurants
are designed to be a welcoming and comfortable environment. Così's
sights, sounds, and spaces create a tasteful, relaxed ambience that
provides a fresh and new dining experience.
"Così," "(Sun & Moon Design)"
and related marks are registered trademarks of Così, Inc. in the
U.S.A. and certain other countries. Copyright © 2014 Così, Inc. All
rights reserved.
"SAFE HARBOR" STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This press
release contains statements that constitute forward- looking
statements under the federal securities laws. Forward-looking
statements are statements about future events and expectations and
not statements of historical fact. The words "believe," "may,"
"will," "should," "anticipate," "estimate," "expect," "intend,"
"objective," "seek," "plan," "strive," or similar words, or
negatives of these words, identify forward- looking statements. We
qualify any forward-looking statements entirely by these cautionary
factors. Forward-looking statements are based on management's
beliefs, assumptions and expectations of our future economic
performance, taking into account the information currently
available to management. Forward-looking statements involve risks
and uncertainties that may cause our actual results, performance or
financial condition to differ materially from the expectations of
future results, performance or financial condition we express or
imply in any forward-looking statements. Factors that could
contribute to these differences include, but are not limited to:
the results being reported in this release are unaudited and
subject to change; the cost of our principal food products and
supply and delivery shortages and interruptions; labor shortages or
increased labor costs; changes in demographic trends and consumer
tastes and preferences, including changes resulting from concerns
over nutritional or safety aspects of beef, poultry, produce, or
other foods or the effects of food-borne illnesses, such as E.
coli, "mad cow disease" and avian influenza or "bird flu";
competition in our markets, both in our business and in locating
suitable restaurant sites; our operation and execution in new and
existing markets; expansion into new markets including foreign
markets; our ability to attract and retain qualified franchisees
and our franchisees' ability to open restaurants on a timely basis;
our ability to locate suitable restaurant sites in new and existing
markets and negotiate acceptable lease terms; the rate of our
internal growth and our ability to generate increased revenue from
our existing restaurants; our ability to generate positive cash
flow from existing and new restaurants; fluctuations in our
quarterly results due to seasonality; increased government
regulation and our ability to secure required government approvals
and permits; our ability to create customer awareness of our
restaurants in new markets; the reliability of our customer and
market studies; cost effective and timely planning, design and
build out of restaurants; our ability to recruit, train and retain
qualified corporate and restaurant personnel and management; market
saturation due to new restaurant openings; inadequate protection of
our intellectual property; our ability to obtain additional capital
and financing; adverse weather conditions which impact customer
traffic at our restaurants; and adverse economic conditions.
Further information regarding factors that could affect our results
and the statements made herein are included in our filings with the
Securities and Exchange Commission.
Additional information is available
on Così's website at
http://www.getcosi.com in the investor relations section.
2013 Fourth Quarter and Full Year
Financial Statements
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Così, Inc via Globenewswire
HUG#1777921