Smith & Wollensky (NASDAQ:SWRG)
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Smith & Wollensky Reports Third Quarter & Nine Months Financial Results
NEW YORK, Nov. 6 /PRNewswire-FirstCall/ -- The Smith & Wollensky Restaurant
Group, Inc. today announced financial results for the third quarter and nine
months ended September 29, 2003.
Total owned restaurant sales for the third quarter were $21.1 million, a 22.4%
increase from the corresponding period a year ago. Comparable owned restaurant
sales rose 17.0% from one year ago. The net loss for the quarter of $1.6
million, or $0.17 per share, reflects the seasonality of the Company's business.
In 2002, the net loss for the third quarter was $2.8 million, or $0.30 per
share. Results for the 2002 period included a charge of $722,000, or $0.08 per
share, for the impairment of the Company's investment in a managed restaurant.
In the third quarter of 2003, operating results were affected by substantially
higher food costs, particularly for prime beef.
For the first nine months of 2003, total owned restaurant sales were $67.7
million, a 22.2% increase from the comparable period in 2002. Comparable owned
restaurant sales for the nine months were up 12.7% from a year ago. The net
loss for the nine-month period was $1.4 million, or $0.14 per share, compared
with a net loss of $2.6 million, or $0.28 per share, for the first three
quarters of 2002.
The Company also announced today that total owned restaurant sales for its
October fiscal month -- the four weeks ended October 27, 2003 -- increased 15.9%
from a year ago. Comparable owned restaurant sales for the month rose 11.3%.
Chairman and CEO Alan Stillman commented, "The Company's sales momentum remains
excellent, especially in our Smith & Wollensky restaurants outside New York.
October represented our 16th consecutive month of sales growth in comparable
owned units, and the double-digit gains in recent months have been achieved
against increasingly strong periods a year ago. However, the positive operating
leverage from this sales growth has been significantly offset by higher food
costs, mainly reflecting reduced U.S. supplies of prime beef."
Mr. Stillman continued, "Strategically, the highlight of the quarter was our
recent announcement of plans to open a new Smith & Wollensky restaurant at a
unique landmark location in Boston next summer. We are also looking forward to
the opening of our new Houston restaurant in January."
Conference Call
Alan Stillman, Chairman & CEO, and Alan Mandel, CFO, will conduct a conference
call to review the Company's financial results for the third quarter and nine
months ended September 29, 2003 at 5:00 p.m. ET on November 6, 2003. 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 third quarter of
2003, is expected to be posted on the Company's website under the heading
Investor Relations immediately 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. Since its inception, the company has grown to include 16 restaurants,
including Smith & Wollensky in New York, Miami Beach, Chicago, New Orleans, Las
Vegas, Washington, D.C., Philadelphia, Columbus and Dallas. SWRG also operates
seven other restaurants in New York and Chicago, including 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.
THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.
AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(dollar amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September September September September
29, 30, 29, 30,
2003 2002 2003 2002
Owned restaurant sales $21,073 17,213 67,744 55,455
Total cost of owned
restaurant sales 20,008 17,021 61,085 50,863
Income from owned restaurant
operations 1,065 192 6,659 4,592
Management fee income 331 502 1,343 1,764
Charge for investment in
managed restaurants - (722) - (722)
Income (loss) from owned and
managed restaurants 1,396 (28) 8,002 5,634
General and administrative
expenses 2,302 2,489 7,438 7,273
Royalty expense 329 250 1,046 784
Operating loss (1,235) (2,767) (482) (2,423)
Interest expense (362) (73) (765) (149)
Amortization of deferred debt
financing costs (13) - (39) -
Interest income 15 57 89 141
Interest expense, net (360) (16) (715) (8)
Loss before provision
for income taxes (1,595) (2,783) (1,197) (2,431)
Provision for income taxes 35 56 160 157
Net loss (1,630) (2,839) (1,357) (2,588)
Net loss per common share -
basic and diluted $(0.17) (0.30) (0.14) (0.28)
Weighted average common shares
outstanding:
Basic and diluted 9,371,907 9,354,266 9,360,212 9,354,266
THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.
AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
(dollar amounts in thousands, except per share amounts)
September 29, December 30,
Assets 2003 2002
Current assets:
Cash $1,826 4,158
Short-term investments 750 3,636
Accounts receivable, net 3,913 2,261
Merchandise inventory 4,002 3,578
Prepaid expenses and other current
assets 1,070 1,465
Total current assets 11,561 15,098
Property and equipment, net 59,239 46,693
Goodwill, net 6,886 6,886
Licensing agreement, net 3,375 3,258
Management contract, net 754 829
Long-term investments 1,277 1,684
Other assets 3,552 3,407
Total assets $86,644 77,855
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $1,586 1,157
Accounts payable and accrued
expenses 9,981 8,851
Total current liabilities 11,567 10,008
Obligations under capital lease 9,956 ?
Long-term debt, net of current
portion 6,808 8,232
Deferred rent 5,135 5,209
Total liabilities 33,466 23,449
Stockholders' equity:
Common stock (par value $.01; authorized
40,000,000 shares; 9,375,066 and
9,354,266 shares issued and outstanding
at September 29, 2003 and December 30,
2002, respectively) 94 94
Additional paid-in capital 69,935 69,854
Accumulated deficit (16,848) (15,491)
Accumulated other comprehensive
loss (3) (51)
53,178 54,406
Total liabilities and stockholders'
equity $86,644 77,855
DATASOURCE: The Smith & Wollensky Restaurant Group, Inc.
CONTACT: Investors - Lauren Felice of RFBinder Partners,
+1-212-994-7541, , for The Smith & Wollensky
Restaurant Group, Inc.
Web site: http://www.smithandwollensky.com/