BJ�s Restaurants, Inc. (NASDAQ:BJRI) today reported financial
results for the third quarter of fiscal 2008 that ended on Tuesday,
September 30, 2008. Total revenues increased approximately 19% to
$95.8 million compared to $80.4 million for the same quarter last
year. Net income and diluted net income per share for the quarter
ended September 30, 2008, were $2.0 million and $0.08,
respectively. �We continue to have strong confidence in BJ�s
ability to steadily gain market share in the estimated $90 billion
casual dining segment of the restaurant industry over the longer
term,� commented Jerry Deitchle, Chairman and CEO. �The BJ�s
restaurant concept remains one of the most approachable,
higher-quality and higher-energy concepts with great value for the
consumer in the casual dining segment today, and our leverageable
growth and support infrastructure is solidly in place. With only 80
restaurants open today, the vast majority of our restaurant growth
remains ahead of us. While we have never felt better about the
factors in our business that are within our control, our challenge
for the next year or so will be to successfully navigate through
the many uncontrollable events and factors in the current operating
environment that are impacting the short-term operating results and
expansion plans of most casual dining restaurant companies.�
Comparable restaurant sales decreased by approximately 1.0% during
the quarter ended September 30, 2008, which was up against a strong
5.6% increase achieved in the same quarter last year. �Several
factors impacted our comparable restaurant sales result this
quarter, including the July 4th holiday shift (approximately 0.5%)
and restaurant closures due to Hurricane Ike (approximately 0.5%),�
said Deitchle. �Absent these two factors, we believe that our
comparable restaurant sales would have been flat for the quarter
just ended, which represents a very respectable performance in
these highly volatile times and, in particular, given that over
half of our restaurants are located in the states of California and
Arizona where the current economic slowdown had been quite
pronounced. In spite of all of these uncontrollable factors, we
were pleased that our comparable restaurant sales for the quarter
outperformed the Knapp-Track� benchmark for casual dining
comparable sales, which is estimated to be down approximately 3.8%
for the September quarter.� Compared to the same quarter last year,
diluted net income per share for the quarter ended September 30,
2008, was also impacted by the following items: approximately $0.02
due to estimated lost sales, operating profit and property damages
from Hurricanes Gustav and Ike that were in excess of our property
and business interruption insurance coverage; approximately $0.03
due to higher utilities and marketing expenses; approximately $0.02
due to higher preopening costs associated with six new restaurant
openings compared to four openings; a benefit of approximately
$0.03 due to a reduction of our estimated incentive compensation
liability for this year; and a benefit of approximately $0.01 due
to a lower effective tax rate. The Company successfully opened a
record six new restaurants during the third quarter of 2008,
including one that was successfully moved forward from an
originally expected opening in the fourth quarter. Initial sales
volumes for these six new restaurants continue to meet or exceed
the Company�s expectations. �In addition to our Tacoma, WA opening
on October 13, 2008, we currently plan to open two more restaurants
in densely populated, mature �home court� trade areas during
November 2008 � one in Chula Vista, CA, and the other in Newark,
CA,� said Deitchle. �As a result, we will successfully achieve our
stated goal to open as many as 15 new restaurants this year and
increase our total restaurant operating weeks by over 20%. This
outstanding accomplishment reflects the strength and quality of our
development and restaurant operations teams.� Many retail projects
have been delayed or canceled by developers due to the slowing
economy, the �credit crunch� and the reduced expansion plans of
many retailers and restaurant companies. This has impacted the
short-term availability of quality sites in the Company�s new
restaurant development pipeline. �BJ�s four-wall economics are
sound, and they support a continued steady pace of new restaurant
expansion,� said Deitchle. �However, we depend on major retail
project developers to provide us with a predictable supply of
quality sites, and this supply is now more constrained. The
hallmark of BJ�s new restaurant development program has always been
AAA-quality locations in mature, densely populated trade areas with
premier co-tenants that create maximum consumer synergy. We will
maintain this discipline in our expansion plan. As of today, we
currently anticipate our growth in total restaurant operating weeks
during 2009 to be in the approximate range of 15% to 18%. After we
complete our full annual business planning cycle for 2009 during
the next couple of months, we will announce the expected number of
new restaurants for the upcoming year and refine our expected
operating week growth target if necessary. The entire BJ�s team is
excited to open more BJ�s restaurants next year and further
increase our market share.� Investor Conference Call and Webcast
BJ�s Restaurants, Inc. will conduct a conference call on its third
quarter earnings release today, October 23, 2008, at 5:00 p.m.
(Eastern Time). The Company will provide an Internet simulcast 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 80
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, entr�es 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 (42), Texas (13), Arizona (5), Colorado (3), Oregon (2),
Nevada (2), Florida (4), Ohio (2), Oklahoma (2), Kentucky (1),
Indiana (1), Louisiana (1) and Washington (2). 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 future periods,
those regarding the effect of new sales-building initiatives, as
well as those regarding the number of restaurants expected to be
opened in future periods 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) the effect of recent credit and equity
market disruptions on our ability to finance our continued
expansion on acceptable terms, (ii) our ability to manage an
increasing number of new restaurant openings, (iii) construction
delays, (iv) labor shortages, (v) minimum wage increases, (vi) food
quality and health concerns, (vii) factors that impact California,
where 42 of our current 80 restaurants are located, (viii)
restaurant and brewery industry competition, (ix) impact of certain
brewery business considerations, including without limitation,
dependence upon suppliers and related hazards, (x) consumer
spending trends in general for casual dining occasions, (xi)
potential uninsured losses and liabilities, (xii) fluctuating
commodity costs and availability of food in general and certain raw
materials related to the brewing of our handcrafted beers and
energy, (xiii) trademark and servicemark risks, (xiv) government
regulations, (xv) licensing costs, (xvi) beer and liquor
regulations, (xvii) loss of key personnel, (xviii) inability to
secure acceptable sites, (xix) limitations on insurance coverage,
(xx) legal proceedings, (xxi) other general economic and regulatory
conditions and requirements, (xxii) 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 the third quarter 2008 will be provided in the
Company�s Form 10-Q filing, to be filed with the Securities and
Exchange Commission by November 9, 2008. For further information,
please contact Greg Levin of BJ�s Restaurants, Inc. at (714)
500-2400. BJ�s Restaurants, Inc. Unaudited Consolidated Statements
of Income (Dollars in thousands except for per share data) � �
Thirteen Weeks Ended � Thirty-Nine Weeks Ended September 30, �
October 2, September 30, � October 2, 2008 � 2007 2008 � 2007 � � �
� Revenues $ 95,751 100.0 % $ 80,388 100.0 % $ 274,800 100.0 % $
230,896 100.0 % Costs and expenses: Cost of sales 24,298 25.4
20,515 25.5 69,221 25.2 58,866 25.5 Labor and benefits 33,460 34.9
27,692 34.4 96,621 35.2 81,400 35.3 Occupancy & operating
expenses 21,916 22.9 16,276 20.2 58,739 21.4 44,890 19.4 General
and administrative 5,683 5.9 6,388 7.9 20,077 7.3 19,363 8.4
Depreciation and amortization 4,992 5.2 3,850 4.8 13,744 5.0 10,337
4.5 Restaurant opening expense 2,673 2.8 1,964 2.4 6,015 2.2 5,178
2.2 Loss on disposal of assets � � � � 351 0.1 2,004 0.9 Natural
disaster & related expense � 446 � 0.5 � � � � � � � � 446 �
0.2 � � � � � � � Total costs and expenses � 93,468 � 97.6 � � �
76,685 � 95.2 � � 265,214 � 96.6 � � � 222,038 � 96.2 � Income from
operations 2,283 2.4 3,703 4.8 9,586 3.4 8,858 3.8 � Other income:
Interest income, net 284 0.3 779 1.0 1,310 0.5 2,604 1.1 Other
income, net � 79 � 0.1 � � � 47 � 0.1 � � 280 � 0.1 � � � 371 � 0.2
� Total other income � 363 � 0.4 � � � 826 � 1.1 � � 1,590 � 0.6 �
� � 2,975 � 1.3 � Income before income taxes 2,646 2.8 4,529 5.9
11,176 4.0 11,833 5.1 � Income tax expense � 606 � 0.6 � � � 1,416
� 1.8 � � 3,123 � 1.1 � � � 3,820 � 1.7 � � Net income $ 2,040 �
2.2 % � $ 3,113 � 4.1 % $ 8,053 � 2.9 % � $ 8,013 � 3.4 % � Net
income per share: Basic $ 0.08 $ 0.12 $ 0.31 $ 0.31 � Diluted $
0.08 $ 0.12 $ 0.30 $ 0.30 � Weighted average number of shares
outstanding: Basic 26,496 26,238 26,403 26,135 � Diluted 26,746
26,931 26,733 26,866 � Selected Consolidated Balance Sheet
Information � (Dollars in thousands) � � Balance Sheet Data (end of
period): September 30, 2008 (unaudited) � � October 2, 2007
(audited) � Cash and cash equivalents $ 2,851 $ 7,871 � Investments
(1) $ 33,926 $ 42,425 � Total assets $ 317,005 $ 265,054 � Total
long-term debt, including current portion $ 7,000 $ � �
Shareholders� equity $ 232,123 $ 215,921 � (1) Investments are
comprised of auction rate securities classified as available for
sale and recorded at their fair value as of September 30, 2008. As
disclosed in previous periodic reports, due to significant
disruptions in the market for auction rate securities, the Company
may be required to make adjustments in the reported fair value of
these instruments in future quarterly periods. � Thirteen Weeks
Ended � Thirty-Nine Weeks Ended September 30, � October 2,
September 30, � October 2, Supplemental (Unaudited) Information (2)
2008 � 2007 2008 � 2007 � Comparable restaurant sales % change -1.0
% 5.6 % -0.1 % 6.6 % Restaurants opened during period 6 4 12 9
Restaurants open at period-end 79 64 79 64 Restaurant operating
weeks 997 809 2,805 2,299 � (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 third 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, (ii) loss on disposal of certain assets and
(iii) natural disaster and related expense. 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 either non-cash or non-routine 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, the
Company believes the exclusion of natural disaster and related
expenses (Hurricanes Gustav and Ike) is appropriate and useful to
investors in light of the fact that such expenses are, by their
nature, extraordinary and non-recurring. Finally, with the respect
to the exclusion of charges relating to the disposal of certain
assets and to charges related to the natural disaster and related
expense, 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.
The Company believes disclosure of non-GAAP net income and non-GAAP
basic and diluted net income per share has economic substance
because expenses associated with disposal of assets and natural
disasters are infrequent in nature. In addition, the loss on
disposal of assets and stock based compensation expenses 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 for per share data) � � � � � � � � � Thirteen
Weeks Ended Thirty-Nine Weeks Ended September 30, October 2,
September 30, October 2, 2008 � � 2007 2008 � � 2007 � Net income
as reported $ 2,040 2.2 % $ 3,113 4.1 % $ 8,053 2.9 % $ 8,013 3.4 %
Stock-based compensation: Labor and benefits 177 0.2 188 0.2 606
0.2 511 0.2 General and administrative 636 0.7 562 0.7 1,861 0.7
1,656 0.7 Loss on disposal of assets � � � � 351 0.1 2,004 0.9
Natural disaster and related expense 446 0.5 � � 446 0.2 � � Tax
effect - stock-based compensation (186 ) (0.2 ) (235 ) (0.3 ) (689
) (0.3 ) (703 ) (0.3 ) Tax effect - loss on disposal of assets � �
� � (98 ) � (667 ) (0.3 ) Tax effect - natural disaster and related
� (102 ) � (0.1 ) � � � � � � � � � (125 ) � � � � � � � � � � �
Non-GAAP net income $ 3,011 � � 3.3 % � � $ 3,628 � � 4.7 % $
10,405 � � 3.8 % � � $ 10,814 � � 4.6 % � Basic net income per
share: $ 0.08 $ 0.12 $ 0.31 $ 0.31 Stock-based compensation 0.03
0.03 0.09 0.08 Loss on disposal of assets � � 0.01 0.07 Natural
disaster and related expense 0.02 � 0.02 � Tax effect - stock-based
compensation (0.01 ) (0.01 ) (0.03 ) (0.03 ) Tax effect - loss on
disposal of assets � � � (0.02 ) Tax effect - natural disaster and
related � � � � � � � � � � � � Non-GAAP basic net income per share
$ 0.12 � $ 0.14 � $ 0.40 � $ 0.41 � � Diluted net income per share:
$ 0.08 $ 0.12 $ 0.30 $ 0.30 Stock-based compensation 0.03 0.03 0.09
0.08 Loss on disposal of assets � � 0.01 0.07 Natural disaster and
related expense 0.02 � 0.02 � Tax effect - stock-based compensation
(0.01 ) (0.01 ) (0.03 ) (0.03 ) Tax effect - loss on disposal of
assets � � � (0.02 ) Tax effect - natural disaster and related � �
� � � � � � � � � � Non-GAAP diluted net income per share $ 0.12 �
$ 0.14 � $ 0.39 � $ 0.40 �
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