BJ�s Restaurants, Inc. (NASDAQ: BJRI) today reported financial
results for the first fiscal quarter ended April 1, 2008.
Highlights for the first quarter, compared to the same quarter last
year, were as follows: Revenues increased approximately 22% to
$86.8 million Net income was $3.1 million and diluted net income
per share was $0.12, compared to net income of $1.6 million and
diluted net income per share of $0.06 for the same quarter last
year (which included a non-cash charge of approximately $1.3
million, net of tax, or $0.05 per diluted share, related to fixed
asset disposals) Comparable restaurant sales were approximately
flat for the quarter Total restaurant operating weeks increased
approximately 24% 2008 restaurant expansion plan remains solidly on
track �In spite of the increasing difficulty of the overall
operating environment for most casual dining restaurant companies
in nearly every respect, our restaurant, brewery and infrastructure
support teams did a very good job of driving BJ�s forward and
managing the elements of our business that are within our control
during the first quarter,� commented Jerry Deitchle, President and
CEO. �As we initially noted in our February 2008 investor
conference call, our first quarter results reflect softer levels of
comparable sales, particularly in the Inland Empire and Sacramento
areas of California and in the Phoenix area of Arizona, which
together contain 13 of our 50 total comparable restaurants. These
areas have been significantly impacted by the slowing national
economy, the �credit crunch� and the resulting pressures in general
on consumer spending and confidence. Excluding these 13 restaurants
from our comparable restaurant base for the first quarter, our
comparable restaurant sales would have been up approximately 3.1%.�
�While no one can accurately predict how the consumer will continue
to react in this volatile and slowing economy, we do not believe
that the current difficult operating environment is likely to abate
in the near future,� said Greg Levin, Executive Vice President and
Chief Financial Officer. �Accordingly, we are accelerating our
planned schedule of 2008 sales-building initiatives. These
initiatives include on-line ordering and curbside cashiering
services, call-ahead seating service, expanded delivery service,
new lunch specials, and additional print media support for our new
menu entrees and other services. We expect most of these
initiatives to be in place by the end of the second quarter. On the
operational execution front, our restaurant management team did a
very good job of managing our controllable costs and expenses
during the first quarter, and we expect them to continue to do so.�
The Company opened two new restaurants in the first quarter of 2008
in Cincinnati, Ohio and Louisville, Kentucky. The Cincinnati
restaurant represents the Company�s second restaurant in Ohio, and
the Louisville restaurant is the Company�s first restaurant in
Kentucky. �We were very pleased with the initial sales volumes of
our Cincinnati and Louisville restaurants, even though both were
opened during periods of significant winter weather in both
cities,� said Greg Lynds, Executive Vice President and Chief
Development Officer. �With the planned May 2008 openings of our new
restaurants in Indianapolis, Indiana and Kissimmee, Florida, BJ�s
will have four restaurants in each of the Ohio Valley and Central
Florida regions, and more openings are planned in these areas
during upcoming years.� �We remain very excited and confident in
BJ�s long-term ability to gain additional market share in the
estimated $90-plus billion casual dining segment of the restaurant
industry,� said Deitchle. �Our development team has worked very
hard to put us in an excellent position to successfully execute our
previously stated restaurant expansion plan to open as many as 15
new restaurants during 2008 and thereby increase our total
restaurant operating weeks another 20% to 25% during the year.� All
prospective locations for potential 2008 openings have been secured
and nine restaurants are currently under construction. As of this
date, the Company currently expects to open approximately four,
five and four new restaurants during each of the upcoming three
fiscal quarters, respectively. The actual timing of restaurant
openings is inherently difficult to precisely predict and is
subject to weather conditions and other factors outside of the
Company�s control, including factors that are under the control of
the Company�s landlords, municipalities and contractors. As
previously disclosed, the Company�s investments consist of auction
rate securities (�ARS�) with a par or face value of $37.1 million.
These auction rate securities are AAA rated, long-term debt
obligations secured by student loans, which loans are 97%
guaranteed by the U.S. Government under the Federal Family
Education Loan Program (�FFELP�). The recent uncertainties in the
credit markets have affected the Company�s holding in these ARS
investments, since auctions for the Company�s investments in these
securities have failed to settle on their respective settlement
dates. Historically, the fair value of the ARS investments
approximated par value due to the frequent resets through the
auction process. While the Company continues to earn interest on
its ARS investments and there has been no change in the ratings of
these securities to date, these investments are not currently
trading and, therefore, do not currently have a readily
determinable market value. In accordance with FASB Statement No.
157, Fair Value Measurements, (�FAS 157�), the Company estimated
the fair value of its auction rate securities using valuation
models and methodologies provided by third parties, including the
Company�s investment manager for the ARS. Based on these valuation
models and methodologies, the Company has recognized a temporary
decline in the fair value of its ARS investments of approximately
$1.5 million as of April 1, 2008. In accordance with FASB Statement
No. 115, Accounting for Certain Investments in Debt and Equity
Securities, (�FAS 115�), a temporary change in fair value results
in an unrealized holding loss being recorded in the �other
comprehensive income (loss)� component of shareholders� equity.
Such an unrealized holding loss does not affect net income for the
applicable accounting period. Due to the current illiquidity of
these investments and the uncertainty regarding the auction rate
securities market, the Company has also reclassified these
investments to non-current investments for the current reporting
period at fair value. In addition, the Company has a $45 million
line of credit, which has zero outstanding as of April 1, 2008, and
currently anticipates holding these ARS investments until a
recovery of the auction process or until maturity. The Company will
continue to monitor the auction rate securities market and the
liquidity and value of the securities it holds. Additional
adjustments to the fair value may be required from quarter to
quarter to reflect changes in market conditions. Investor
Conference Call and Webcast BJ�s Restaurants, Inc. will conduct a
conference call on its first quarter earnings release today, April
24, 2008, at 2:00 p.m. (Pacific Standard Time). The Company will
provide an Internet simulcast, as well as a replay of the
conference call. To listen to the conference call, please visit the
�Investors� page of the Company's website located at
http://www.bjsrestaurants.com several minutes prior to the start of
the call to register and download any necessary audio software. An
archive of the presentation will be available for 30 days following
the call. BJ's Restaurants, Inc. currently owns and operates 69
casual dining restaurants under the BJ's Restaurant & Brewery,
BJ's Restaurant & Brewhouse or BJ's Pizza & Grill brand
names. BJ's restaurants offer an innovative and broad menu
featuring award-winning, signature deep-dish pizza complemented
with generously portioned salads, appetizers, sandwiches, soups,
pastas, entrees and desserts. Quality, flavor, value, moderate
prices and sincere service remain distinct attributes of the BJ's
experience. The Company operates several microbreweries which
produce and distribute BJ's critically acclaimed handcrafted beers
throughout the chain. The Company's restaurants are located in
California (39), Texas (11), Arizona (4), Colorado (3), Oregon (2),
Nevada (2), Florida (3), Ohio (2), Oklahoma (2) and Kentucky (1).
The Company also has a licensing interest in a BJ's restaurant in
Lahaina, Maui. Visit BJ's Restaurants, Inc. on the Web at
http://www.bjsrestaurants.com. Certain statements in the preceding
paragraphs and all other statements that are not purely historical
constitute "forward-looking statements" for purposes of the
Securities Act of 1933 and the Securities and Exchange Act of 1934,
as amended, and are intended to be covered by the safe harbors
created thereby. Such statements include, but are not limited to,
those regarding expected comparable restaurant sales growth in
2008, those regarding the effect of new sales-building initiatives,
as well as those regarding the number of restaurants expected to be
opened in 2008 and the timing and location of such openings. These
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results to
be materially different from those projected or anticipated.
Factors that might cause such differences include, but are not
limited to: (i) our ability to manage an increasing number of new
restaurant openings, (ii) construction delays, (iii) labor
shortages, (iv) minimum wage increases, (v) food quality and health
concerns, (vi) factors that impact California, where 39 of our
current 69 restaurants are located, (vii) restaurant and brewery
industry competition, (viii) impact of certain brewery business
considerations, including without limitation, dependence upon
suppliers and related hazards, (ix) consumer spending trends in
general for casual dining occasions, (x) potential uninsured losses
and liabilities, (xi) fluctuating commodity costs, the effect of
any resulting menu price increases on our sales, the availability
of food in general and certain raw materials related to the brewing
of our handcrafted beers and energy, (xii) trademark and
servicemark risks, (xiii) government regulations, (xiv) licensing
costs, (xv) beer and liquor regulations, (xvi) loss of key
personnel, (xvii) inability to secure acceptable sites, (xviii)
limitations on insurance coverage, (xix) legal proceedings, (xx)
other general economic and regulatory conditions and requirements,
(xxi) the success of our key sales-building and related operational
initiatives and (xxii) numerous other matters discussed in the
Company's filings with the Securities and Exchange Commission. BJ's
Restaurants, Inc. undertakes no obligation to update or alter its
forward-looking statements whether as a result of new information,
future events or otherwise. Further information concerning the
Company�s results of operations for first quarter 2008 will be
provided in the Company�s Form 10-Q filing, to be filed with the
Securities and Exchange Commission by May 12, 2008. BJ�s
Restaurants, Inc. Unaudited Consolidated Statements of Income
(Dollars in thousands except for per share data) � � � � For the
Thirteen Weeks Ended April 1, April 3, Statement of Income Data:
2008 2007 � Revenues $ 86,822 100.0 % $ 71,203 100.0 % � Costs and
expenses: Cost of sales 21,897 25.2 18,028 25.3 Labor and benefits
30,671 35.3 25,628 36.0 Operating and occupancy expenses 17,746
20.4 13,406 18.8 General and administrative expenses 7,396 8.5
6,238 8.8 Depreciation and amortization 4,268 4.9 3,052 4.3
Restaurant opening expense 1,127 1.3 1,420 2.0 Loss on disposal of
assets � - - � � 2,004 2.8 � Total cost and expenses � 83,105 95.6
� � 69,776 98.0 � Income from operations 3,717 4.4 1,427 2.0 �
Other income: Interest income, net 651 0.7 976 1.4 Other income,
net � 88 0.1 � � 34 0.0 � Total other income � 739 0.8 � � 1,010
1.4 � Income before income tax expense 4,456 5.2 2,437 3.4 � Income
tax expense � 1,336 1.5 � � 811 1.1 � � Net income $ 3,120 3.7 % $
1,626 2.3 % � Net income per share: Basic $ 0.12 $ 0.06 � Diluted $
0.12 $ 0.06 � Weighted average number of shares outstanding: Basic
26,359 26,072 � Diluted 26,736 26,813 Selected Consolidated Balance
Sheet Information (Dollars in thousands) � � � Balance Sheet Data
(end of period): April 1,2008(unaudited) � January 1,2008(audited)
� � Cash and cash equivalents $ 5,210 $ 11,617 � Investments (1) $
35,627 $ 41,100 � Total assets $ 283,575 $ 285,299 � Total
long-term debt, including current portion $ - $ - � Shareholders�
equity $ 223,086 $ 220,523 � (1) Investments are comprised of
auction rate securities classified as available for sale and
recorded at their fair value as of April 1, 2008. Supplemental
(Unaudited) Information (2) � For the Thirteen Weeks Ended April 1,
2008 � April 3, 2007 � Comparable restaurant sales % change 0.0 %
6.9 % Restaurants opened during period 2 2 Restaurants open at
period-end 69 57 Restaurant operating weeks 894 721 � (2) excludes
the one licensed restaurant Reconciliation of Non-GAAP Financial
Measures To supplement the consolidated financial statements
presented in accordance with U.S. generally accepted accounting
principles (GAAP), the Company has included the following non-GAAP
financial measures in this press release or in the webcast to
discuss the Company's financial results for the first quarter which
may be accessed via the Company's website at
http://www.bjsrestaurants.com: (i) non-GAAP net income, and (ii)
non-GAAP basic and diluted net income per share. Each of these
non-GAAP financial measures is adjusted from results based on GAAP
to exclude certain expenses and gains. As a general matter, the
Company uses these non-GAAP measures in addition to and in
conjunction with results presented in accordance with GAAP. Among
other things, the Company uses such non-GAAP financial measures in
addition to and in conjunction with corresponding GAAP measures to
help analyze the performance of its core business. In addition, the
Company believes that such non-GAAP financial information is
provided by its competitors and such information is used by
analysts and others in the investment community to analyze the
Company's results and in formulating estimates of future
performance and that failure to report these non-GAAP measures,
could result in confusion among analysts and others and a misplaced
perception that the Company's results have underperformed or
exceeded expectations or the results of its competitors. These
non-GAAP financial measures reflect an additional way of viewing
aspects of the Company's operations that, when viewed with the GAAP
results and the reconciliations to corresponding GAAP financial
measures, provide a more complete understanding of the Company's
results of operations and the factors and trends affecting the
Company's business. However, these non-GAAP measures should be
considered as a supplement to, and not as a substitute for, or
superior to, the corresponding measures calculated in accordance
with GAAP. Non-GAAP net income and non-GAAP basic and diluted net
income per share exclude the effects of (i) stock-based
compensation expense, and (ii) a loss on the disposal of certain
assets. In addition, non-GAAP net income and non-GAAP diluted net
income per share reflect an adjustment of income tax expense
associated with exclusion of the foregoing expense items. The
adjustment of income taxes is required in order to provide
management and investors a more accurate assessment of the taxes
that would have been payable on net income, as adjusted by
exclusion of the effects of the above listed items. The Company
believes that presentation of measures of net income and diluted
net income per share that exclude these items assists management
and investors in evaluating the period over period performance of
the Company's ongoing core business operations because the expenses
are non-cash in nature. Additionally, although the sizes of the
Company�s grants of various equity awards are within the Company's
control, the amount of stock compensation expense varies depending
on factors such as short-term fluctuations in stock price and
volatility which can be unrelated to the operational performance of
the Company during the period in question and generally is outside
the control of management during the period in which the expense is
recognized. Moreover, the Company believes that the exclusion of
stock-based compensation in presenting non-GAAP financial measures
is useful to investors to understand the impact of the expensing of
stock-based compensation to the Company's net income and net income
per share in comparison to prior periods as well as to its
competitors. Furthermore, with the respect to the exclusion of
charges relating to the disposal of certain assets, the Company
believes that presentation of a measure of non-GAAP net income and
net income per share that excludes such charges is useful to
management and investors in evaluating the performance of the
Company�s ongoing operations on a period-to-period basis and
relative to the Company�s competitors. In this regard, the Company
notes that the losses of this type are infrequent and variable in
nature. The Company believes disclosure of non-GAAP net income and
non-GAAP basic and diluted net income per share has economic
substance because the excluded expenses are infrequent in nature
and do not represent current cash expenditures. A material
limitation associated with the use of this measure as compared to
the GAAP measures of net income and diluted net income per share is
that they may not be comparable with the calculation of net income
and diluted net income per share for other companies in the
Company's industry. The Company compensates for these limitations
by providing full disclosure of the effects of this non-GAAP
measure, by presenting the corresponding GAAP financial measure in
this release and in the Company�s financial statements and by
providing a reconciliation to the corresponding GAAP measure to
enable investors to perform their own analysis. (Unaudited, dollars
in thousands except per share data) � � � � � Thirteen Weeks Ended
April 1, 2008 April 3, 2007 � Net income as reported $ 3,120 3.7 %
$ 1,626 2.3 % Stock-based compensation: Labor and benefits 208 0.2
161 0.2 General and administrative expenses 608 0.7 539 0.8 Loss on
disposal of fixed assets - - 2,004 2.8 Tax effect � stock-based
compensation (245 ) (0.3 ) (233 ) (0.3 ) Tax effect � loss on
disposal of fixed assets � - � - � � (667 ) (1.0 ) Non-GAAP net
income $ 3,691 � 4.3 % $ 3,430 � 4.8 % � Basic net income per share
$ 0.12 $ 0.06 Stock-based compensation 0.03 0.03 Loss on disposal
of fixed assets - 0.08 Tax effect � stock-based compensation (0.01
) 0.00 Tax effect � loss on disposal of fixed assets � - � � (0.03
) Non-GAAP basic net income per share $ 0.14 � $ 0.14 � � Diluted
net income per share $ 0.12 $ 0.06 Stock-based compensation 0.03
0.03 Loss on disposal of fixed assets - 0.07 Tax effect �
stock-based compensation (0.01 ) (0.01 ) Tax effect � loss on
disposal of fixed assets � - � � (0.02 ) Non-GAAP diluted net
income per share $ 0.14 � $ 0.13 �
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