BUCA, Inc. Announces First Quarter 2008 Financial Results
BUCA, Inc. (Nasdaq: BUCA) today announced financial results for the first fiscal quarter of 2008. The Company reported a net loss of $4.2 million, or ($0.20) per share, in the first quarter of fiscal 2008 as compared to a net loss of $2.8 million, or ($0.14) per share, in the first quarter of fiscal 2007.
John T. Bettin, the Company’s Chief Executive Officer and President commented, “The first quarter was clearly difficult for us, but not without its accomplishments. Our net loss of ($0.20) per share for the first quarter of fiscal 2008 included charges of approximately ($0.04) per share related to the impact of severance payments associated with our $2.1 million reduction in force executed in January of this year, and approximately ($0.03) per share related to the settlement of a wage and hour lawsuit in California. Despite a downturn in comparable restaurant sales of 2.5% for the period, our restaurants still did an excellent job of managing prime costs (the combination of product and labor costs), including lowering labor costs by 80 basis points as compared to the prior year. I am very proud of their tenacity and unwavering commitment to our Company during these most difficult of times for our industry. Although the environment will no doubt continue to be challenging on a number of fronts, we continue to have confidence that several of our new initiatives, including the recently expanded roll-out of catering and the upcoming launch of a new lunch menu, will help us weather the casual dining storm.” First Quarter 2007 Results Total restaurant sales in the first quarter of fiscal 2008 were $60.1 million compared to $62.8 million in the first quarter of fiscal 2007. The decrease in restaurant sales was primarily the result of the closure of four restaurants since the beginning of fiscal 2007 as well as the decrease in comparable restaurant sales, partially offset by the addition of New Year’s Eve to the first quarter of fiscal 2008 as compared to the same period of the prior year.
Comparable restaurant sales decreased 2.5% for the first quarter of fiscal 2008 as compared to the same period last year.
Product costs were $15.2 million in the first quarter of fiscal 2008 compared to $15.4 million in the first quarter of fiscal 2007. Product costs as a percentage of sales increased to 25.4% in the first quarter of fiscal 2008 from 24.5% in the first quarter of fiscal 2007. The decrease in product costs in dollars was primarily due to reductions in sales and the closure of four restaurants. The increase in product costs as a percentage of sales was primarily driven by the elimination of the Company’s Paisano Conference in first quarter 2008. The Paisano Conference is the Company’s annual strategic and celebratory meeting of its Paisano Partners, Divisional Vice Presidents and company executives. Because a portion of our Paisano Conference is typically sponsored by selected vendors, vendor sponsorship payments are accounted for as a reduction in product costs. The cancellation of the conference in the first quarter of fiscal 2008 has a corresponding negative impact on product costs as a percentage of sales.
Labor costs were $20.4 million in the first quarter of fiscal 2008 compared to $21.9 million in the first quarter of fiscal 2007. The decrease in labor cost dollars was primarily related to the closure of four restaurants. Labor cost as a percentage of sales decreased to 34.0% in the first quarter of fiscal 2008 from 34.8% in the first quarter of fiscal 2007. The decrease in labor costs as a percentage of sales was primarily related to a decrease in medical claims in the first quarter of fiscal 2008 as compared to the first quarter of fiscal 2007 and reductions in non-exempt staffing resulting from the Company’s labor management initiative, partially offset by increases in restaurant-level management staffing.
General and administrative expenses were $6.2 million in the first quarter of fiscal 2008 as compared to $5.6 million in the first quarter of fiscal 2007. General and administrative expenses as a percentage of restaurant sales were 10.2% in the first quarter of fiscal 2008 as compared to 8.9% in the comparable period of fiscal 2007. The increase in general and administrative expenses in the first quarter of fiscal 2008 was primarily related to severance costs associated with the Company’s previously announced reduction in force as well as the settlement of a wage and hour lawsuit in California, partially offset by the savings from the reduction in force.
Conference Call BUCA, Inc. will host a conference call on Tuesday, May 6, 2008 at 4:30 p.m. Eastern Time (3:30 p.m. Central Time) to discuss these results. John T. Bettin, the Company’s Chief Executive Officer and President, and Dennis J. Goetz, the company’s Chief Financial Officer, will be hosting the call. The conference call will be webcast and can be accessed from the following link: http://viavid.net/dce.aspx?sid=00004FE3. For those who are unable to listen to the webcast live, a telephone replay will be available for one week beginning at 7:30 p.m. (Eastern Time) on May 6, 2008, and can be accessed by dialing 1-888-203-1112 or 1-719-457-0820 (international callers) and entering pin number 5821244.
About the Company: BUCA, Inc. owns and operates 89 highly acclaimed Italian restaurants under the name Buca di Beppo in 25 states and the District of Columbia BUCA, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (in thousands, except share and per share data) (Unaudited) Thirteen Weeks Ended March 30,
2008 April 1,
2007 Restaurant sales $ 60,105 $ 62,811 Restaurant costs: Product 15,237 15,378 Labor 20,417 21,860 Direct and occupancy 19,134 19,047 Depreciation and amortization 2,689 2,954 Loss on disposal of assets 20 100 Total restaurant costs 57,497 59,339 General and administrative expenses 6,211 5,624 Loss on impairment of long-lived assets 31 50 Lease termination charges - (3 ) Operating loss (3,634 ) (2,199 ) Interest income 27 137 Interest expense (592 ) (561 ) Loss before income taxes (4,199 ) (2,623 ) Income taxes - - Net loss from continuing operations (4,199 ) (2,623 ) Net loss from discontinued operations - (172 ) Net loss $ (4,199 ) $ (2,795 ) Net loss from continuing operations per share—basic and diluted $ (0.20 ) $ (0.13 ) Net loss from discontinued operations per share—basic and diluted $ - $ (0.01 ) Net loss per share—basic and diluted $ (0.20 ) $ (0.14 ) Weighted average common shares outstanding—basic and diluted 20,533,247 20,410,184 BUCA, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands, except share data) (Unaudited) March 30,
2008 December 30, 2007 ASSETS CURRENT ASSETS: Cash $ 819 $ 1,070 Accounts receivable 3,542 4,260 Inventories 5,947 6,084 Prepaid expenses and other 4,069 4,470 Total current assets 14,377 15,884 PROPERTY AND EQUIPMENT, net 96,725 98,327 OTHER ASSETS 3,121 3,186 $ 114,223 $ 117,397 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 7,948 $ 6,634 Unredeemed gift card liabilities 2,369 3,738 Accrued payroll and benefits 6,477 7,483 Accrued sales, property and income tax 3,177 3,897 Other accrued expenses 4,371 4,876 Line of credit borrowing 3,510 - Current maturities of long-term debt and capital leases 325 296 Total current liabilities 28,177 26,924 LONG-TERM DEBT AND CAPITAL LEASES, less current maturities 15,904 15,993 DEFERRED RENT 17,917 18,002 OTHER LIABILITIES 3,671 3,962 Total liabilities 65,669 64,881 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY: Undesignated stock, 5,000,000 shares authorized, none issued or outstanding - - Common stock, $.01 par value per share, 30,000,000 shares authorized; 21,438,453 and 21,088,651 shares issued and outstanding, respectively 214 211 Additional paid-in capital 173,081 172,903 Accumulated deficit (123,877 ) (119,678 ) Notes receivable from employee shareholders (864 ) (920 ) Total shareholders’ equity 48,554 52,516 $ 114,223 $ 117,397
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