Granite City Food & Brewery Reports Fourth Quarter and Fiscal Year 2009 Results
General and Administrative Costs Decreased $3.3 Million in Fiscal Year 2009 Compared to Fiscal Year 2008; Company-wide EBITDA Increased $1.0 Million in Fourth Quarter 2009 Compared to Fourth Quarter 2008
Granite City Food & Brewery Ltd. (Nasdaq: GCFB), a Modern American upscale casual restaurant chain, today reported results for the fourth quarter and fiscal year ended December 29, 2009. The company also announced the election of a new independent director to fill a vacancy resulting from a resignation in February and the election of a new chairman.
“We are pleased to see continued growth in our guest traffic as a result of our promotional and discount efforts”Highlights for the fourth quarter and fiscal year 2009 were as follows:
- Prime cost (food, beverage, labor) as a percentage of revenue decreased 2.4 percentage points from 64.5% in the fourth quarter of 2008 to 62.1% in the fourth quarter of 2009 and decreased 4.5 percentage points from 66.9% in fiscal year 2008 to 62.4% in fiscal year 2009
- General and administrative charges decreased $1.0 million in fourth quarter 2009 compared to fourth quarter 2008, and decreased $3.3 million in fiscal year 2009 compared to fiscal year 2008
- Restaurant-level income before occupancy (“IBO”) improved to 22.2% in the fourth quarter of 2009 from 20.1% in prior year fourth quarter and improved to 22.5% in fiscal year 2009 compared to 18.2% in fiscal year 2008
- Comparable restaurant sales were down 8.1% on a fourth quarter-over-fourth quarter comparison
- Comparable guest traffic increased 1.4% on a fourth quarter-over-fourth quarter comparison
- Company-wide EBITDA increased $5.8 million to $4.6 million in fiscal year 2009 compared to $(1.2) million in fiscal year 2008
For all the company’s restaurants, the restaurant-level IBO margin was 22.2% for the fourth quarter of 2009 compared to 20.1% in the fourth quarter of 2008. This represents an increase of 2.1 percentage points in restaurant-level IBO.
“We are pleased to see continued growth in our guest traffic as a result of our promotional and discount efforts,” commented Granite City’s CEO, Steve Wagenheim. “Many of the initiatives that we put in place over the past year are beginning to take hold. What is even more rewarding is that the improvement in revenue and operating margins is continuing into 2010. While our operations team in the field continues to show great strength, we are also continuing our efforts to seek additional working capital in these difficult economic times by seeking long-term rent concessions on top of our already negotiated past concessions. We believe this is imperative for any restaurant group to survive in today’s economic environment.”
Total revenue for the fourth quarter of 2009 decreased by 3.9% to $20.8 million compared to $21.7 million for the fourth quarter of 2008. Total cost of sales before occupancy was $16.2 million in the fourth quarter of 2009 or 77.8% of sales, compared to prior year fourth quarter cost of sales before occupancy of $17.3 million or 79.9% of sales. The primary cause of improvement was a decrease in food and beverage costs as a percentage of revenue of 1.9 percentage points in the fourth quarter of 2009 compared to the fourth quarter of 2008.
General and administrative expenses were $1.7 million or 8.1% of sales for the fourth quarter of 2009 compared to $2.7 million or 12.3% of sales for the fourth quarter of 2008.
The net loss for the fourth quarter of 2009 was $2.6 million or $(0.37) per share compared to a net loss of $4.0 million or $(1.47) per share in the fourth quarter of 2008.
Fiscal Year 2009 Financial Results
Total revenue for fiscal year 2009 decreased by 10.8% to $85.8 million compared to $96.3 million for fiscal year 2008. Fiscal year 2008 included 53 weeks while fiscal year 2009 included 52 weeks. On an adjusted 52-week basis, revenue decreased 9.1%.
For all the restaurants, the restaurant-level IBO margin was 22.5% for fiscal year 2009 compared to 18.2% for fiscal year 2008. This represents an increase of 4.3 percentage points in restaurant-level IBO.
Total cost of sales before occupancy was $66.5 million in fiscal year 2009 or 77.5% of sales compared to prior year cost of sales before occupancy of $78.7 million or 81.8% of sales.
General and administrative expenses were $7.6 million or 8.8% of sales for fiscal year 2009 compared to $10.8 million or 11.3% of sales for fiscal year 2008.
The net loss for fiscal year 2009 was $9.6 million or $(2.53) per share compared to a net loss of $15.8 million or $(5.85) per share for fiscal year 2008.
Election of New Director and Chairman
On March 16, 2009, the company filed a Form 8-K with the SEC announcing the election of David A. Timpe to serve as a director, filling the vacancy resulting from the resignation of an independent director, John Pesicka. Mr. Timpe, age 62, retired in May 2007 after 37 years as an audit partner at Eide Bailly LLP. Since his retirement, Mr. Timpe has assisted start-up companies with their accounting and business solutions. Mr. Timpe currently serves as the Interim Chief Financial Officer at Avera Sacred Heart Hospital, a position he has held since October 2009. Previously he served as the Interim Chief Financial Officer at Sioux Center Community Hospital and Health Center from January 2009 to August 2009.
The company also announced that Joel C. Longtin, an independent director, was elected Chairman of the company’s board of directors, succeeding Eugene E. McGowan, who remains an independent director.
Investor Conference Call and Webcast
A conference call to review the results of the fourth quarter and fiscal year 2009 will be held on Thursday, March 18, 2010 at 10:00 a.m. Central Time and may be accessed by calling 1-888-732-6202 and referencing code 292074. An archive of the presentation will be available for 30 days following the call and may be accessed by calling 1-888-348-4629 and entering replay code 292074.
About Granite City
Granite City Food & Brewery Ltd. is a Modern American upscale casual restaurant chain that operates 26 restaurants in 11 states. The menu features affordable yet high quality family favorite menu items prepared from made-from-scratch recipes and served in generous portions. The sophisticated yet unpretentious restaurants, proprietary food and beverage products, attractive price points and high service standards combine for a great dining experience. Granite City opened its first restaurant in St. Cloud, Minnesota in 1999.
| GRANITE CITY FOOD & BREWERY LTD. | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| Thirteen Weeks | Year Ended | ||||||||||||||||
| December 29, | December 30, | December 29, | December 30, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||
| Restaurant revenues | $ | 20,844,859 | $ | 21,692,598 | $ | 85,849,048 | $ | 96,294,344 | |||||||||
| Cost of sales: | |||||||||||||||||
| Food, beverage and retail | 5,692,467 | 6,329,691 | 23,557,063 | 29,035,558 | |||||||||||||
| Labor | 7,247,592 | 7,661,943 | 30,052,771 | 35,429,340 | |||||||||||||
| Direct restaurant operating | 3,273,575 | 3,346,832 | 12,892,914 | 14,260,116 | |||||||||||||
| Occupancy | 2,168,989 | 1,562,370 | 6,983,445 | 6,200,309 | |||||||||||||
| Total cost of sales | 18,382,623 | 18,900,836 | 73,486,193 | 84,925,323 | |||||||||||||
| Pre-opening | - | 335,076 | 211,252 | 1,663,894 | |||||||||||||
| General and administrative | 1,683,469 | 2,673,442 | 7,575,730 | 10,880,289 | |||||||||||||
| Depreciation and amortization | 1,610,017 | 1,753,139 | 6,805,073 | 6,568,536 | |||||||||||||
| Exit or disposal activities | 1,022,074 | 151,762 | 1,798,401 | 1,271,307 | |||||||||||||
| Other | 143,341 | 41,224 | 202,027 | 146,360 | |||||||||||||
| Operating loss | (1,996,665 | ) | (2,162,881 | ) | (4,229,628 | ) | (9,161,365 | ) | |||||||||
| Interest: | |||||||||||||||||
| Income | 592 | 310 | 2,279 | 28,788 | |||||||||||||
| Expense | (649,282 | ) | (1,806,662 | ) | (5,397,607 | ) | (6,648,487 | ) | |||||||||
| Net interest expense | (648,690 | ) | (1,806,352 | ) | (5,395,328 | ) | (6,619,699 | ) | |||||||||
| Net loss | $ | (2,645,355 | ) | $ | (3,969,233 | ) | $ | (9,624,956 | ) | $ | (15,781,064 | ) | |||||
| Loss per common share, basic | $ | (0.37 | ) | $ | (1.47 | ) | $ | (2.53 | ) | $ | (5.85 | ) | |||||
| Weighted average shares | |||||||||||||||||
| outstanding, basic | 7,109,898 | 2,699,642 | 3,802,206 | 2,699,005 | |||||||||||||
| Selected Balance Sheet Information |
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| December 29, | December 30, | ||||||
| 2009 | 2008 | ||||||
| Cash | $ | 1,743,599 | $ | 2,652,411 | |||
| Current assets, including cash | $ | 3,139,018 | $ | 3,899,222 | |||
| Total assets | $ | 56,021,956 | $ | 82,110,665 | |||
| Current liabilities | $ | 11,668,965 | $ | 11,708,886 | |||
| Total liabilities | $ | 48,693,656 | $ | 79,634,099 | |||
| Shareholders’ equity | $ | 7,328,300 | $ | 2,476,566 | |||
| Non-GAAP Reconciliations Q4 2009 Results |
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| Total for All | |||||||||||||||||||
| Comparable | % of | New | % of | Restaurants | % of | ||||||||||||||
| Restaurants | Sales | Restaurants | Sales | As Reported | Sales | ||||||||||||||
| Restaurant revenues | $ | 19,275,268 | 100 | % | $ | 1,569,591 | 100 | % | $ | 20,844,859 | 100 | % | |||||||
| Cost of sales: | |||||||||||||||||||
| Food, beverage and retail | 5,276,013 | 27.4 | % | 416,454 | 26.5 | % | 5,692,467 | 27.3 | % | ||||||||||
| Labor | 6,746,369 | 35.0 | % | 501,223 | 31.9 | % | 7,247,592 | 34.8 | % | ||||||||||
| Direct restaurant operating expenses | 3,044,673 | 15.8 | % | 228,902 | 14.6 | % | 3,273,575 | 15.7 | % | ||||||||||
| Restaurant-level IBO* | $ | 4,208,213 | 21.8 | % | $ | 423,012 | 27.0 | % | $ | 4,631,225 | 22.2 | % | |||||||
| Occupancy | 2,168,989 | 10.4 | % | ||||||||||||||||
| Pre-opening | - | 0.0 | % | ||||||||||||||||
| General and administrative | 1,683,469 | 8.1 | % | ||||||||||||||||
| Company-wide EBITDA* | 778,767 | 3.7 | % | ||||||||||||||||
| Depreciation and amortization | 1,610,017 | ||||||||||||||||||
| Exit or disposal activities, other | 1,165,415 | ||||||||||||||||||
| Operating loss | |||||||||||||||||||
