Sept. 22, 2011, 5:00 p.m. EDT
Kona Grill Closes Underperforming Sugar Land, Texas Location
SCOTTSDALE, AZ, Sep 22, 2011 (MARKETWIRE via COMTEX) -- Kona Grill, Inc. /quotes/zigman/97050/quotes/nls/kona KONA -7.74% , an American grill and sushi bar, has closed its underperforming restaurant in Sugar Land, Texas.
"The closure of Sugar Land is consistent with our strategy to eliminate unprofitable locations and focus on our existing 23 successful Kona Grill restaurants," said Mike Nahkunst, interim president and CEO of Kona Grill. "The timing of this closure was primarily due to the unanticipated sudden end to negotiations with the leaseholder, as we were exploring ways to reduce this location's overhead and potentially make it profitable. We've now concluded the pruning process related to our restaurant portfolio, which allows us to concentrate on developing the two new restaurants we have scheduled to open in 2012."
Since the operating results of the Sugar Land location will be reported as discontinued operations, the company has revised its third quarter 2011 restaurant sales guidance by $500,000, to a range of $23.6 million to $23.7 million, to reflect the exclusion of sales associated with this restaurant. The company's expectation for income from continuing operations remains unchanged. However, due to lease termination and other related exit costs that will be recorded in discontinued operations, the expected range for net income has been lowered by approximately $0.2 million or $0.02 per share. The company now expects to report third quarter net income of $0.3 million to $0.4 million, or $0.03 to $0.04 per share.
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