Smith & Wollensky (NASDAQ:SWRG)
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Smith & Wollensky Reports Second Quarter Financial Results
NEW YORK, Aug. 5 /PRNewswire-FirstCall/ -- The Smith & Wollensky Restaurant
Group, Inc. (NASDAQ:SWRG) today announced financial results for the second
quarter and six months ended June 28, 2004.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020904/SWRGLOGO )
Total consolidated restaurant sales for the second quarter were $30.0 million,
a 15.1% increase from the corresponding period a year ago. Comparable
consolidated restaurant sales for the quarter were up 9.3%. This represents
the ninth consecutive quarter of comparable consolidated restaurant sales
increases. Net income for the second quarter of 2004 was $263,000, or $0.03
per share, compared with net income of $240,000, or $0.02 per share, in the
comparable quarter last year. Although the Company has taken pricing action to
offset the continued high cost of beef, food cost, as a percentage of sales,
was higher than in the second quarter of 2003. The Company estimates that
increases in the average cost of prime cuts added approximately $370,000 and
$900,000, respectively, to the second quarter and six months ended June 28,
2004 food cost for comparable consolidated restaurants when compared to the
second quarter and six months ended June 30, 2003.
For the first six months of 2004, total consolidated restaurant sales were
$60.7 million, a 17.9% increase from the first six months of 2003. Comparable
consolidated restaurant sales for the first half rose 9.4%. Net income for the
six-month period was $193,000, or $0.02 per share, compared with $323,000, or
$0.03 per share, for the first half of 2003. Results for both the six-month
periods of 2004 and 2003 included opening costs and initial operating losses
related to a new restaurant -- Houston in the first quarter of 2004 and Dallas
in the first quarter of 2003.
As a result of the Company's adoption of FIN 46, the results and accounts for
Maloney & Porcelli, a restaurant managed by the Company, have been consolidated
by the Company for 2004 and 2003. Prior to the adoption of FIN 46, the Company
had been including in its consolidated results only the fee received for
managing the operations of Maloney & Porcelli.
The Company also announced today that total consolidated restaurant sales for
its July fiscal month -- the four weeks ended July 26, 2004 -- increased 12.7%
from July 2003. Comparable consolidated restaurant sales for the month rose
4.1%.
Chairman and CEO Alan Stillman commented, "We continue to be pleased with the
Company's sales performance with particular note to the strong public response
to our Houston unit. We are also looking forward to a successful opening of
our Boston location early this fall."
Mr. Stillman continued, "Other notable events during the second quarter of 2004
include the completion of $ 4.0 million of additional financing, which will be
used for the construction of our Boston location."
Conference Call
Alan Stillman, Chairman & CEO, and Alan Mandel, CFO, will conduct a conference
call to review the Company's financial results for the second quarter of 2004
and six months ended June 28, 2004 at 5:00 p.m. ET on August 5, 2004.
Interested parties may listen to the live call over the Internet via
http://www.smithandwollensky.com/. To listen to the live call, please go to
the website at least 15 minutes early to register and to download and install
any necessary audio software. If you are unable to listen live, the conference
call will also be archived on the website listed above. An audio recording of
the conference call, which may contain material non-public information
regarding the Company's results of operations or financial condition for the
second quarter of 2004, is expected to be posted on the Company's website under
the heading Investor Relations following the conference call.
About Smith & Wollensky Restaurant Group
The Smith & Wollensky Restaurant Group develops, owns and operates high- end,
high-volume restaurants in major cities across the United States. The original
Smith & Wollensky, a traditional New York steakhouse, opened in 1977 and is
currently believed to be the largest-grossing a la carte restaurant in the
country. The company operates ten Smith & Wollensky restaurants located in New
York, Miami Beach, Chicago, New Orleans, Las Vegas, Washington, D.C.,
Philadelphia, Columbus, Dallas and Houston. SWRG also operates seven other
restaurants in New York and Chicago: Cite, Maloney & Porcelli, Manhattan Ocean
Club, Mrs. Park's Tavern, ONEc.p.s., Park Avenue Cafe and The Post House.
Except for historical information contained herein, the statements made in this
press release regarding the Company's business, strategy and results of
operations are forward-looking statements which are based on management's
beliefs and information currently available to management. Readers are
cautioned not to put undue reliance on such forward-looking statements, which
are subject to a number of risks and uncertainties that could cause actual
results to differ materially from such statements. Factors that may cause such
differences include changes in economic conditions generally or in each of the
markets in which the Company is located, unanticipated changes in labor or food
costs, changes in consumer preferences, the level of competition in the
high-end segment of the restaurant industry and the success of the Company's
growth strategy. For a more detailed description of such factors, please see
the Company's filings with the Securities and Exchange Commission. The Company
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
(Financial Tables Follow)
THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.
AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(dollar amounts in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 28, June 30, June 28, June 30,
2004 2003 2004 2003
Restaurant sales $30,010 $26,081 $60,662 $51,440
Total cost of restaurant
sales 26,593 22,910 54,090 45,284
Income from restaurant operations 3,417 3,171 6,572 6,156
Management fee income 316 232 632 444
Income from owned and
managed restaurants 3,733 3,403 7,204 6,600
General and administrative
expenses 2,367 2,389 4,908 5,086
Royalty expense 432 369 871 717
Operating income 934 645 1,425 797
Interest expense (333) (277) (656) (403)
Amortization of deferred
debt financing costs (26) (13) (44) (26)
Interest income - 31 - 74
Interest expense, net (359) (259) (700) (355)
Income before provision for
income taxes 575 386 725 442
Provision for income taxes 51 75 103 125
Income before interest in (income)
loss of consolidated variable
interest entity 524 311 622 317
Interest in (income) loss of
consolidated variable
interest entity (261) (71) (429) 6
Net income $263 $240 $193 $323
Net income per common share:
Basic $0.03 $0.03 $0.02 $0.03
Diluted $0.03 $0.02 $0.02 $0.03
Weighted average common
shares outstanding:
Basic 9,376,249 9,354,481 9,376,249 9,354,374
Diluted 10,131,915 9,806,731 10,131,915 9,667,470
THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
(dollar amounts in thousands, except per share data)
June 28, December 29,
Assets 2004 2003
Current assets:
Cash and cash equivalents $1,033 $2,181
Short-term investments 168 1,055
Accounts receivable, net 2,818 2,680
Merchandise inventory 4,867 4,749
Prepaid expenses and other current assets 1,376 845
Total current assets 10,262 11,510
Property and equipment, net 68,527 63,386
Goodwill, net 6,886 6,886
Licensing agreement, net 3,489 3,338
Other assets 4,241 3,941
Total assets $93,405 $89,061
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $1,323 $2,121
Accounts payable and accrued expenses 12,206 11,922
Total current liabilities 13,529 14,043
Obligations under capital lease 10,062 9,991
Long-term debt, net of current portion 10,497 6,099
Deferred rent 6,481 6,400
Total liabilities 40,569 36,533
Interest in consolidated variable
interest entity (1,601) (1,680)
Stockholders' equity:
Common stock (par value $.01; authorized
40,000,000 shares; 9,376,249 shares issued
and outstanding at June 28, 2004 and
December 29, 2003, respectively) 94 94
Additional paid-in capital 69,940 69,940
Accumulated deficit (15,649) (15,842)
Accumulated other comprehensive income 52 16
54,437 54,208
Total liabilities and
stockholders' equity $93,405 $89,061
http://www.newscom.com/cgi-bin/prnh/20020904/SWRGLOGODATASOURCE: The Smith &
Wollensky Restaurant Group
CONTACT: Allison Good of The Smith & Wollensky Restaurant Group,
+1-212-838-2061, or ; or Investors, Lauren Felice of RFBinder
Partners, +1-212-994-7541, or
Web site: http://www.smithandwollensky.com/