CONTACT: William
Koziel
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Così, Inc. Reports 2013 Second Quarter Results
DEERFIELD, IL - August 15, 2013 -
Così, Inc. (NASDAQ: COSI), the fast casual restaurant company,
today reported a net loss for the second quarter ended July 1, 2013
of $(2,135,000), or $(0.12) per basic and diluted common share,
compared with net income of $77,000, or $0.01 per basic and diluted
common share, reported for the 2012 second quarter. The
calculated net income (loss) per share for both quarters reflects
the impact of the reverse stock split that was effected on May 9,
2013.
Così's total revenues for the 2013
second quarter decreased by $2,900,000 to $23,408,000 from
$26,308,000 in the 2012 second quarter. Company-owned net
restaurant sales decreased by $2,666,000 to $22,656,000 from
$25,322,000 in the 2012 second quarter. Franchise fees and royalty
revenues for the quarter contributed $752,000 compared to $986,000
in the 2012 second quarter. The decline in revenues compared
to last year's second quarter was due primarily to the closure of
six Company-owned and seven franchise locations during and
subsequent to the second quarter of 2012, the decline in comparable
Company-owned store sales and the impact of franchise fees recorded
in the 2012 second quarter resulting from the termination of two
area development agreements.
System-wide comparable restaurant
sales for the second quarter as measured for restaurants in
operation for more than 15 months recorded an aggregate decline of
2.7% as compared to the second quarter of 2012. The breakdown
in comparable sales between Company-owned and franchise-operated
restaurants are as follows:
For the 13 weeks ended
July 1, 2013
Company-owned
(3.6%)
Franchise-operated
(1.4%)
Total System
(2.7%)
"We must reverse the decline in
our revenues. The long term viability of our business depends
upon it. We recognize the urgency of our situation and are
working diligently to make this happen," said Stephen Edwards,
Così's President and Chief Executive Officer.
2013 Second
Quarter Financial Performance Review
Così's aforementioned $2,666,000
decrease in second quarter Company-owned net sales as compared to
the 2012 second quarter was due primarily to a $1,813,000 decline
in net sales from six locations closed during and subsequent to the
second quarter of 2012 as well as a 3.6% decrease in comparable
restaurant net sales. The decrease in Company-owned
comparable net sales during the quarter was comprised of a 5.0%
decrease in traffic partially offset by a 1.4% increase in average
guest check.
For the second quarter, Così reported a 550 basis point increase in
costs and expenses related to Company-owned restaurant operations
as a percentage of restaurant net sales compared with the second
quarter of 2012. The change resulted from increases of 230, 170 and
150 basis points, as a percentage of net sales, in labor and
related benefits expense, occupancy and other restaurant operating
expenses and the cost of food and beverage, respectively. The
increase in labor and related benefits expense and occupancy and
other restaurant operating expense as a percentage of net sales was
due largely to the deleveraging impact of the comparable restaurant
net sales decline on the fixed portion of these costs in the
period. Also impacting our labor and related benefits expense
for the quarter was an increase in employee health care costs.
The increase in the cost of food and beverage as a percentage
of net sales was largely due to a sales mix shift to menu items
that have a higher cost as a percentage of net sales, the impact of
a greater use of fresh vegetables in our product offerings and the
launch of the new bowl category this year which has a higher than
average cost when compared to the other entrée categories but also
has higher than average gross margin dollars per transaction.
During the second quarter of 2013,
the Company's general and administrative expenses increased by
$212,000, to $3,141,000 or 13.4% of total revenues from $2,929,000
or 11.1% of total revenues in the 2012 second quarter due primarily
to a charge for severance that was recorded in the quarter.
Così reported that as of July 1,
2013 it had cash and cash equivalents of $11,963,000 and virtually
no debt other than lease obligations.
About Così,
Inc.
Così®
(http://www.getcosi.com) is a national fast casual restaurant chain
that has developed featured foods built around a secret,
generations-old recipe for crackly crust flatbread. This artisan
bread is freshly baked in front of customers throughout the day in
open-flame stone-hearth ovens prominently located in each of the
restaurants. Così's warm and urbane atmosphere is geared towards
its sophisticated, upscale, urban and suburban guests. There are
currently 72 Company-owned and 49 franchise restaurants operating
in sixteen states, the District of Columbia, the United Arab
Emirates, and Costa Rica. The Così® vision is to
become America's favorite fast casual restaurant by providing
customers authentic, innovative, savory food while remaining an
affordable luxury.
The Così® menu features
Così® sandwiches,
freshly-tossed salads, bowls, breakfast wraps, melts, soups,
Così®
Squagels®, flatbread
pizzas, S'mores, snacks and other desserts, and a wide range of
coffee and coffee-based drinks and other specialty beverages.
Così® restaurants
are designed to be welcoming and comfortable with an eclectic
environment. Così's sights, sounds, and spaces create a tasteful,
relaxed ambience that provides a fresh and new dining
experience.
"Così," "(Sun & Moon Design)"
and related marks are registered trademarks of Così, Inc. in the
U.S.A. and certain other countries. Copyright © 2013 Così, Inc. All
rights reserved.
"SAFE HARBOR" STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This press
release contains statements that constitute forward- looking
statements under the federal securities laws. Forward-looking
statements are statements about future events and expectations and
not statements of historical fact. The words "believe," "may,"
"will," "should," "anticipate," "estimate," "expect," "intend,"
"objective," "seek," "plan," "strive," or similar words, or
negatives of these words, identify forward- looking statements. We
qualify any forward-looking statements entirely by these cautionary
factors. Forward-looking statements are based on management's
beliefs, assumptions and expectations of our future economic
performance, taking into account the information currently
available to management. Forward-looking statements involve risks
and uncertainties that may cause our actual results, performance or
financial condition to differ materially from the expectations of
future results, performance or financial condition we express or
imply in any forward-looking statements. Factors that could
contribute to these differences include, but are not limited to:
the cost of our principal food products and supply and delivery
shortages and interruptions; labor shortages or increased labor
costs; changes in demographic trends and consumer tastes and
preferences, including changes resulting from concerns over
nutritional or safety aspects of beef, poultry, produce, or other
foods or the effects of food-borne illnesses, such as E. coli, "mad
cow disease" and avian influenza or "bird flu"; competition in our
markets, both in our business and in locating suitable restaurant
sites; our operation and execution in new and existing markets;
expansion into new markets including foreign markets; our ability
to attract and retain qualified franchisees and our franchisees'
ability to open restaurants on a timely basis; our ability to
locate suitable restaurant sites in new and existing markets and
negotiate acceptable lease terms; the rate of our internal growth
and our ability to generate increased revenue from our existing
restaurants; our ability to generate positive cash flow from
existing and new restaurants; fluctuations in our quarterly results
due to seasonality; increased government regulation and our ability
to secure required government approvals and permits; our ability to
create customer awareness of our restaurants in new markets; the
reliability of our customer and market studies; cost effective and
timely planning, design and build out of restaurants; our ability
to recruit, train and retain qualified corporate and restaurant
personnel and management; market saturation due to new restaurant
openings; inadequate protection of our intellectual property; our
ability to obtain additional capital and financing; adverse weather
conditions which impact customer traffic at our restaurants; and
adverse economic conditions. Further information regarding factors
that could affect our results and the statements made herein are
included in our filings with the Securities and Exchange
Commission.
Additional information is available
on Così's website at
http://www.getcosi.com in the investor relations section.
Financial Statements Q2 2013 -
Press Release Final
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Reuters clients.
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(i) the releases contained herein are protected by copyright and
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(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: Così, Inc via Thomson Reuters ONE
HUG#1723143