Benihana Inc. (NASDAQ: BNHNA; BNHN), operator of the nation’s
largest chain of Japanese theme and sushi restaurants, today
reported results for its third fiscal quarter 2011 ended January 2,
2011.
Highlights for the Company's third fiscal quarter 2011
relative to the third fiscal quarter 2010 include:
- Total restaurant sales increased 3.6%
to $72.5 million from $70.0 million
- Total comparable restaurant sales
increased 4.4%, including a 7.3% increase at Benihana
Teppanyaki
- Income from operations of $1.3 million
(net of $1.2 million in non-recurring costs), compared to a loss
from operations of ($10.7) million (net of $0.2 million in
non-recurring costs and $12.3 million in non-cash impairment
charges)
- Net income of $2.2 million, or $0.12
per diluted share, compared to a net loss of ($10.9) million, or
($0.72) per diluted share
Richard C. Stockinger, Chairman, President and Chief Executive
Officer, said, “We demonstrated a remarkable improvement in our
operating results compared to the same quarter last year,
characterized by comparable restaurant sales growth at Benihana
Teppanyaki and effective management of controllable expenses across
our entire Company. As part of our ongoing efforts to increase
traffic and sustain the momentum of our Renewal Program, we are
highlighting the distinct nature of the Benihana Teppanyaki guest
experience with a new multi-media campaign, coupled with a
combination of value-based promotions, media advertising, and local
marketing initiatives at RA Sushi and Haru. These initiatives are
designed to enhance value for all of our shareholders.”
Mr. Stockinger concluded, “In terms of our capital structure, we
paid down an additional $4.1 million of outstanding debt during the
quarter, resulting in total borrowings outstanding of $12.8 million
and an available borrowing balance of $18.4 million as of January
2, 2011. We are pleased to announce that we have completed an
amendment and restatement to our credit facility agreement,
allowing us a $30 million borrowing capacity through February 2014.
Although we have limited our expenditure of capital to a handful of
remodeling projects this year, with the economy beginning to
exhibit some signs of recovery, we are taking steps to prepare our
brands for development, in line with our overall growth
strategy.”
Third Fiscal Quarter 2011 Results
For the third fiscal quarter of 2011, total revenues increased
3.6% to $72.9 million from $70.4 million in the third fiscal
quarter of 2010. Total restaurant sales increased 3.6% to $72.5
million from $70.0 million in the third fiscal quarter of 2010.
Company-wide comparable restaurant sales increased 4.4%,
representing the fourth consecutive quarter of positive comparable
restaurant sales. By concept, comparable restaurant sales increased
7.3% at Benihana Teppanyaki, but decreased 1.5% at RA Sushi and
1.1% at Haru. There were a total of 1,158 store-operating weeks in
the third fiscal quarter of 2011 compared to a total of 1,176
store-operating weeks in the third fiscal quarter of 2010.
Cost of food and beverage sales for the third fiscal quarter of
2011 totaled $17.6 million, compared to $17.0 million in the third
fiscal quarter of 2010. As a percentage of restaurant sales, cost
of food and beverage sales remained stable on a year-over-year
basis.
Restaurant operating expenses for the third fiscal quarter of
2011 totaled $46.7 million, or 64.4% of restaurant sales, compared
to $47.0 million, or 67.2% of restaurant sales, in the third fiscal
quarter of 2010. The year-over-year decrease as a percentage of
restaurant sales reflected improved cost and labor management in
the current quarter in connection with the continued efforts of the
Renewal Program.
General and administrative expenses for the third fiscal quarter
of 2011 totaled $7.3 million, or 10.1% of total revenues, compared
to $4.8 million, or 6.8% of total revenues, in the third fiscal
quarter of 2010. During the third fiscal quarter of 2011, the
Company incurred $0.2 million in higher corporate salaries as a
result of changes in Benihana Teppanyaki corporate operations and
the regional manager and regional chef structure and $0.4 million
in costs related to the ongoing execution of the Company’s
accounting and payroll function outsourcing agreement. The latter
was in turn offset by an approximately $0.5 million reduction in
corporate salaries. The Company also recorded an additional $0.3
million in legal fees with respect to various legal items.
The Company incurred certain non-recurring costs of
approximately $1.2 million in corporate general and administrative
expenses, including approximately $0.5 million associated with
various financial, operational and strategic growth consulting
agreements, along with $0.7 million in connection with our
evaluating strategic alternatives, including a potential sale of
the Company.
During the third fiscal quarter of 2010, the Company incurred
impairment charges of $12.3 million. There were no similar charges
in the third fiscal quarter of 2011.
Income from operations for the third fiscal quarter of 2011 was
$1.3 million compared to loss from operations of ($10.7) million in
the third fiscal quarter of 2010. Non-recurring costs were $1.2
million during the recent quarter as compared to $0.7 million
during the same quarter in the prior year.
Net income for the third fiscal quarter of 2011 was $2.2
million, or $0.12 in diluted earnings per share, compared to net
loss of ($10.9) million, or ($0.72) in diluted earnings per share,
in the third fiscal quarter 2010.
Safe Harbor Statement
Except for the historical matters contained herein, statements
in this press release are forward-looking and are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that forward-looking
statements involve risks and uncertainties that may affect the
business and prospects of the Company, including, without
limitation: risks related to the Company’s business strategy,
including the Company’s Renewal Program and marketing programs;
risks related to the Company’s ability to operate successfully in
the current challenging economic environment; risks related to the
Company’s efforts to strengthen its Benihana Teppanyaki concept and
build its RA Sushi and Haru brands; and other risks and
uncertainties that may cause results to differ materially from
those set forth in the forward-looking statements. Past performance
may not be indicative of future results. Although the Company
believes the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, there can be no
assurance that its expectations will be realized. In addition to
the risks and uncertainties set forth above, investors should
consider the risks and uncertainties discussed in the Company’s
filings with the Securities and Exchange Commission, including,
without limitation, the risks and uncertainties discussed under the
heading “Risk Factors” in such filings. The Company does not
undertake any obligation to publicly update any forward-looking
statement to reflect events or circumstances after the date on
which any such statement is made or to reflect the occurrence of
unanticipated events.
About Benihana
Headquartered in Miami, Benihana Inc. (NASDAQ GS: BNHN, BNHNA)
is the nation's leading operator of Japanese theme and sushi
restaurants with 97 restaurants nationwide, including 63 Benihana
restaurants, nine Haru sushi restaurants, and 25 RA Sushi
restaurants. Famous for its entertaining chefs who present and
prepare delicious teppanyaki entrees at hibachi tables, as well as
sushi and other Japanese favorites, Benihana introduced Japanese
food to America in 1964. RA Sushi offers a subtly sexy and
energetic experience with a hip ambience, and Haru is an urban,
upscale sushi concept. In addition, 20 franchised Benihana
restaurants are operating in the United States, Latin America and
the Caribbean. To learn more about Benihana Inc. and its three
restaurant concepts, please view the corporate video at
www.benihana.com/about/video.
Benihana Inc. and SubsidiariesSales
by Concept(Unaudited)(In thousands)
Three Periods Ended January
2, January 3, Percentage
2011 2010 change Comparable
restaurant sales by concept: Teppanyaki
$ 49,306 $
45,920 7.3 % RA Sushi
15,862 16,105 -1.5 % Haru
7,324 7,404 -1.1 % Total comparable restaurant sales
$ 72,492 $ 69,429 4.4 %
Ten
Periods Ended January 2, January 3, Percentage
2011 2010 change Comparable restaurant sales by concept:
Teppanyaki
$ 160,787 $ 151,860 5.9 % RA Sushi
54,857 55,283 -0.8 % Haru
25,116 25,027
0.4 % Total comparable restaurant sales
$ 240,760 $
232,170 3.7 %
Benihana Inc. and
SubsidiariesCondensed Consolidated Statements of
Earnings(Unaudited)(In thousands)
Three Periods Ended January
2, January 3,
2011
2010 Revenues: Restaurant sales
$
72,492 99.4 % $ 69,971 99.4 % Franchise fees
and royalties
403 0.6
% 407 0.6 % Total revenues
72,895 100.0 %
70,378 100.0 % Restaurant
Expenses: Cost of food and beverage sales
17,582 24.1
% 16,964 24.1 % Restaurant operating expenses
46,703
64.1 % 46,986 66.8 % Restaurant opening costs
- 0.0 % - 0.0 % General and administrative
expenses
7,298 10.0 % 4,785 6.8 % Impairment
charges
- 0.0 %
12,347 17.5 % Total operating expenses
71,583 98.2 % 81,082 115.2 % Income
(Loss) from operations
1,312 1.8 % (10,704 )
-15.2 % Interest expense, net
(212
) -0.3 % (440 ) -0.6 %
Income (Loss) before income taxes
1,100 1.5
% (11,144 ) -15.8 % Income tax expense (benefit)
(1,079 ) -1.5 %
(257 ) -0.4 % Net Income (Loss)
2,179
3.0 % (10,887 ) -15.5 % Less: Accretion of preferred
stock issuance costs and preferred stock dividends
250 250
Net income (loss) attributable to common stockholders
$ 1,929 $
(11,137 ) Earnings (Loss) Per Share Basic earnings
(loss) per common share
$ 0.12 $ (0.72 ) Diluted
earnings (loss) per common share
$ 0.12
$ (0.72 ) Weighted
Average Shares Outstanding Basic
15,471 15,404 Diluted
18,257
15,404
Benihana Inc. and
SubsidiariesCondensed Consolidated Statements of
Earnings(Unaudited)(In thousands)
Ten Periods Ended January
2, January 3,
2011 2010
Revenues:
Restaurant sales
$ 244,536 99.5 % $ 234,425 99.5 %
Franchise fees and royalties
1,318
0.5 % 1,273 0.5 %
Total revenues
245,854
100.0 % 235,698 100.0 %
Restaurant Expenses: Cost of food and beverage sales
59,681 24.3 % 55,968 23.7 % Restaurant
operating expenses
159,131 64.7 % 159,903 67.8
% Restaurant opening costs
8 0.0 % 1,063 0.5 %
General and administrative expenses
27,199 11.1
% 17,074 7.2 % Impairment charges
- 0.0 % 12,347
5.2 % Total operating expenses
246,019 100.1
% 246,355 104.5 % Income (Loss) from operations
(165 ) -0.1 % (10,657 ) -4.5 % Interest
expense, net
(485 ) -0.2
% (1,244 ) -0.5 % Income (Loss)
before income taxes
(650 ) -0.3 %
(11,901 ) -5.0 % Income tax expense (benefit)
(1,436 ) (1,267 )
Net Income (Loss)
786 0.3 % (10,634 )
Less: Accretion of preferred stock issuance costs and preferred
stock dividends
833
833 Net income (loss)
attributable to common stockholders
$
(47 ) $ (11,467 )
Earnings (Loss) Per Share Basic earnings (loss) per common share
$ (0.00 ) $ (0.75 ) Diluted earnings (loss)
per common share
$ (0.00 )
$ (0.75 ) Weighted Average
Shares Outstanding Basic
15,457 15,383 Diluted
15,457 15,383
Benihana Inc. and
SubsidiariesCondensed Balance Sheet Data(Unaudited)(In
thousands)
January 2, March 28,
2011
2010
Assets Current Assets: Cash and cash equivalents
$ 3,380 $ 2,558 Other current assets
14,197 13,149 Total current assets
17,577 15,707 Property and equipment, net
185,793 194,261 Goodwill
6,896 6,896 Deferred income
tax asset, net
15,282 17,226
Total assets
$ 225,548 $ 234,090
Liabilities, Convertible Preferred Stock and Stockholders’
Equity Current Liabilities: Borrowings under line of credit
12,847 22,410 Other current liabilities
33,312 32,979 Total current liabilities
46,159 55,389 Long term liabilities
15,186 15,362 Total liabilities
61,345 70,751 Convertible preferred
stock
19,690 19,623
Stockholders’ Equity Total stockholders’ equity
144,513 143,716 Total liabilities,
convertible preferred stock and stockholders' equity
$ 225,548 $ 234,090
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