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Restaurant Industry News
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Sunday June 11th, 2006 |
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Main Street and Main Inc. Announces Its 2003 Fourth Quarter and Full Year Results
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Main Street and Main Inc., the world's largest franchisee of TGI Friday's restaurants, the owner and operator of the Bamboo Club - Asian Bistro, and Redfish Seafood Grill and Bar restaurant concepts, today announced its operating results for the fourth quarter and year ended Dec. 29, 2003. |
Click here for financial tables
Financial summary 2003 versus 2002
Fourth Quarter Comparisons
For the quarter ended Dec. 29, 2003, the company reported a net loss of $(4.8) million, or $(0.34) per diluted share, compared with a loss of $(9.1) million, or $(0.64) per diluted share, for the comparable quarter in 2002. The fourth quarter loss included $3.1 million in noncash charges primarily for asset write-downs attributable to an underperforming store ($900,000), goodwill and lease termination costs for a store that will close in early 2004 ($900,000), a provision for the retirement of our CEO ($300,000), a final write-off of receivables in connection with the terminated management contract ($600,000), and a write-off of deferred financing fees and other ($400,000).
Excluding these noncash charges and interest expense of $1.2 million, the net loss from operations for the quarter would have been approximately $(0.5) million, compared with a net loss of approximately $(0.4) million (also excluding the impact of impairment charges, interest and income taxes) for 2002. The slight increase in the operating loss in 2003 from the comparable quarter in 2002 is primarily attributable to the lost operating margin from the three restaurants sold in July 2003, offset by improving sales and lower pre-opening costs by $225,000 in 2003 versus the same period in 2002.
Revenue for the quarter ended Dec. 29, 2003, was $52.6 million compared with revenue of $52.9 million for the comparable quarter in 2002. The revenue decline was primarily due to the lost revenue from the three sold TGI Friday's and one closed Redfish restaurant, offset by the revenue from the opening of five new restaurants during 2003 and the full-year impact of the six restaurants opened in 2002. Also, for the quarter ended Dec. 29, 2003, same-store sales increased by 1.4% compared with a 0.8% decrease for the comparable quarter in 2002.
Our measure of operating cash flow known as EBITDA for the three months ended Dec. 29, 2003, was $1.7 million versus $1.7 million in the same quarter a year ago. (The computation of our quarterly EBITDA can be found in Appendix A, attached to this press release).
Bart Brown, chief executive officer, and Bill Shrader, president and COO, said "For the past few years the fourth quarter has been a difficult one from a financial point of view. Sales can be volatile, reflecting changing weather patterns, seasonality and the overall state of the local economies. While we're pleased that we saw a return of positive same-store sales in this fourth quarter, the fourth quarter still remains one of the lowest revenue quarters from an average weekly sales point of view for Main Street, which makes it challenging to operate profitably. In the future, we plan to reduce new store pre-opening activity in the fourth quarter and focus on operating profitability."
Full-Year Comparisons
For the full year ended Dec. 29, 2003, the company incurred a net loss of $(2.0) million, or $(0.14) per diluted share, on revenue of $224.5 million compared with net loss of $(8.6) million, or $(0.61) per diluted share, on revenue of $220.2 million for fiscal 2002. Excluding the gain on sale of assets ($3.8 million) and the full year's impairment charges of $5.9 million in 2003 and $7.9 million in 2002, operating income for 2003 was $4.6 million compared with $4.6 million for 2002. Same-store sales for the full year increased by 1.1% in 2003 compared with an increase of 0.4% for fiscal 2002. Due to net operating loss carry forwards, the company paid no income taxes for the year ended Dec. 29, 2003.
For the full year ended Dec. 29, 2003, and for the comparable period in 2002, EBITDA was $13.6 million and $13.0 million, respectively. (The derivation of our year-to-date EBITDA can be found in Appendix A, attached to this press release).
Brown and Schrader said, "On an apples-to-apples basis, excluding all one-time gains and charges and interest expense, operating income was essentially flat in 2003 compared to 2002, despite the sale of three restaurants early in the third quarter. We also saw better economic conditions in Arizona and California and improved results from the TGI Friday's national advertising campaign, offset by higher operating expenses for advertising and insurance."
Brown and Shrader concluded, "We are excited about the new marketing campaign, our new TGI Friday's development agreement and the Friday's partnership with Atkins. In combination, these give us cautious optimism as we head into 2004. In addition to revenue drivers, we will continue to aim for balance sheet improvement. This includes evaluating opportunities to sell or redeploy assets on a case-by-case basis keeping shareholder value and improved liquidity as important criteria."
Recent Developments
During the fourth quarter, we opened our 12th and newest Bamboo Club located in Raleigh, N.C. In January, we secured a revolving line of credit with one of our principal lenders for $2.5 million.
Expectations for the first quarter 2004
We were pleased with the announcement of the Friday's partnership with Atkins and the new items featured in our menu beginning in late December. A four-week national advertising campaign featuring the Atkins menu items began in early January and ran through the first week in February. The initial results were very positive and same-store sales for these two months increased by approximately 6%. However, in those periods between TV campaigns, we still see flat sales or sales declines as compared with the prior year. At this time we are reaffirming our guidance for the full year of same-store sales of 2% to 3%, diluted earnings per share of $.14 to $.16 (before taxes or unusual write-offs) and EBITDA of approximately $14.0 to $16.0 million.
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| Last: |
6.34 |
| Time: |
6/9/2006 3:40pm |
| Change: |
-0.01 |
| Opened: |
6.35 |
| Day: |
6.36 - 6.33 |
| Volume: |
24205 |
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