Benihana Inc. Reports Increased First Quarter Operating Results.Business Editors MIAMI--(BUSINESS WIRE)--Aug. 25, 2003 Benihana Inc. (Nasdaq: BNHNA and BNHN), operator of one of the nation's largest chains of Asian restaurants, today reported net income for the 16-week period ended July 20, 2003 of approximately $3.0 million, or $0.33 per share fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , compared with $2.8 million, or $0.30 per share fully diluted, in the corresponding period a year ago. Revenues for the first fiscal 2004 period increased 6.9%, to $61.1 million, from $57.2 million in the corresponding year-ago period. While diluted per share earnings were in line with the Company's guidance issued last May, comparable restaurant sales for the period were 0.5% below a year ago, compared to expectations of a 0.5% to 1% increase. The decline reflected a 1.9% decrease in comparable restaurant sales at the Benihana teppanyaki restaurants, due to the continuing sluggish economy Sluggish Economy A state in the economy in which the growth is slow, flat or declining. The term can refer to the economy as a whole or a component of the economy, such as weak housing starts. and the Iraq war Iraq War: see under Persian Gulf Wars. Iraq War or Second Persian Gulf War Brief conflict in 2003 between Iraq and a combined force of troops largely from the U.S. and Great Britain; and a subsequent U.S. . Haru, with five restaurants in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , experienced an 8.3% increase in comparable sales comparing against last year when three new highly successful Haru restaurants were getting fully underway. Sales of RA Sushi, acquired in December 2002, exceeded management's expectations but are not yet factored into the computations of comparable sales. "We are pleased to have hit our net income target," said Joel A. Schwartz, President. "This year will mark the 40th anniversary of Benihana's founding and it will also be a year of notable expansion, with a total of eight new Benihana, Haru and RA Sushi restaurants under development. With the improvements realized in restaurant labor and related costs, our principal task is focused on resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of our historical sales gains at the teppanyaki restaurants." First Quarter Results Gross profit increased 5.2%, to $45.0 million, compared with $42.7 million in the corresponding year-ago period. Restaurant operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. increased to $9.5 million, from $9.0 million, a gain of 5.6%. Commodity costs, particularly those for beef, rose during the quarter, resulting in increased cost of food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. sales to 25.7% of sales from 24.7% of sales last year. Total cost of sales increased approximately 11.3%, to $15.6 million. However, as a result of an ongoing effort to improve productivity and reduce health care costs, notwithstanding increased workers compensation costs, restaurant operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. as a percentage of revenue improved to 58.6%, from 59.5% a year ago. New Restaurants The Company has eight new restaurants currently under development and major renovation construction is planned at three older units. New Benihana teppanyaki restaurants are slated for Scottsdale, Arizona Scottsdale (O'odham Vaṣai S-vaṣonĭ) is a city in Maricopa County, Arizona, United States, adjacent to Phoenix. Scottsdale has become internationally recognized as a premier and posh tourist destination, while maintaining its own identity and culture as " , Alpharetta, Georgia Alpharetta is a city in Fulton County, Georgia, United States. As of 2006 census estimates, the city had a total population of 43,424[1]. Selected for its location next to a spring, it began as a campground, and was originally known as , and Carlsbad, California Carlsbad is a coastal resort-town in northern San Diego County, California. According to the state Department of Finance, the city had a total population of 90,271 in 2003. . Additionally, the teppanyaki restaurant in Bethesda, Maryland Bethesda is an urbanized, but unincorporated, area in southern Montgomery County, Maryland, just Northwest of Washington, D.C. It takes its name from a church located there, the Bethesda Presbyterian Church, built in 1820 and rebuilt in 1850, which in turn took its name from , will be moving to a new freestanding free·stand·ing adj. Standing or operating independently of anything else: a freestanding bell tower; a freestanding maternity clinic. building in a very high traffic location. The Company will extensively renovate three restaurants spread out over the next year, which will require closures for as long as four months. Haru has under development a new restaurant, its first outside New York City, in the Old Town area of Philadelphia, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York . This fall RA Sushi expects to open new restaurants featuring its Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. menu and high energy atmosphere in San Diego, California “San Diego” redirects here. For other uses, see San Diego (disambiguation). San Diego is a coastal Southern California city located in the southwestern corner of the continental United States. As of 2006, the city has a population of 1,256,951. , Tucson, Arizona Tucson (pronounced /ˈtusɑn/, Spanish: Tucsón [tuk'son] and Chicago, Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. . Another RA Sushi is under development for Huntington Beach, California Huntington Beach is a seaside city in Orange County in southern California. As of the 2000 census, the city population was 189,594. It is bordered by the Pacific Ocean on the west, by Seal Beach on the north, by Costa Mesa on the south, by Westminster on the northeast, and by . Outlook The Company is estimating flat to slightly negative total comparable sales for the second fiscal quarter ending October 12, 2003. The Company expects that, with higher prevailing commodities costs coupled with significantly higher restaurant opening expenses to be incurred in conjunction with increased restaurant opening activity, net per fully diluted share income will be between $0.08 and $0.10. About Benihana Benihana, now approaching its 40th year and one of the nation's largest chains of Asian restaurants, currently operates 64 restaurants nationwide, including 54 Benihana teppanyaki restaurants, five Haru sushi restaurants, four RA Sushi Bar Noun 1. sushi bar - a bar where sushi is served bar - a counter where you can obtain food or drink; "he bought a hot dog and a coke at the bar" Restaurants and one Doraku restaurant. Three additional company-owned Benihana teppanyaki restaurants, four RA Sushi restaurants and one Haru restaurant are currently under development. In addition, a total of 22 franchised Benihana teppanyaki restaurants are now open or under development in the U.S. and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . Statements in this press release concerning the Company's business outlook or future economic performance, anticipated profitability, revenues, expenses or other financial items, together with other statements that are not historical facts, are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " as that term is defined under Federal Securities Laws. "Forward-looking statements" are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. Such risks, uncertainties and factors include, but are not limited to, changes in customers' tastes and preferences, acceptance of the Company's concepts in new locations, obtaining qualified personnel, industry cyclicality, fluctuations in customer demand, the seasonal nature of the business, fluctuations of commodities costs, the ability to complete construction of new units in a timely manner, obtaining governmental permits on a reasonably timely basis, and general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission. The Company disclaims any obligations to update any forward-looking statement as a result of developments occurring after the date of this press release. Conference Call Scheduled A conference call conducted by Benihana Inc. management will take place on August 25 at 11:00 A.M. (ET). You may listen over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.benihana.com. To listen to the live call on the Internet, please go to the web site at least fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. A replay will be available through midnight September 7, 2003, shortly following the live call. For replay, dial 877-519-4471 and use PIN number 4121641.
Benihana Inc.
Consolidated Statements of Operations
(Unaudited) Four Periods Ended
(amounts in thousands except per share
data)
July 20, July 21,
2003 2002 Change %Change
Restaurant sales $ 60,542 $ 56,723 $3,819 6.7%
Franchise fees & royalties 560 436 124 28.4%
---------- ---------- ------- -------
61,102 57,159 3,943 6.9%
Cost of food & beverage
sales 15,571 13,990 1,581 11.3%
---------- ---------- ------- -------
Gross profit 44,971 42,733 2,238 5.2%
---------- ---------- ------- -------
Restaurant operating
expenses:
Labor and related costs 21,766 21,300 466 2.2%
Restaurant supplies 1,155 1,066 89 8.3%
Credit card discounts 1,073 969 104 10.7%
Utilities 1,462 1,267 195 15.4%
Occupancy costs 3,398 3,192 206 6.5%
Depreciation and
amortization 2,353 1,921 432 22.5%
Other restaurant operating
expenses 4,277 4,037 240 5.9%
---------- ---------- ---------------
Total restaurant operating
expenses 35,484 33,752 1,732 5.1%
---------- ---------- ---------------
Restaurant operating profit 9,487 8,981 506 5.6%
Restaurant opening costs 243 148 95 64.2%
Marketing, general and
administrative expenses 5,013 4,796 217 4.5%
---------- ---------- ---------------
Income from operations 4,791 4,473 318 7.1%
Interest expense, net 148 117 31 26.5%
Minority interest 189 157 32 20.4%
---------- ---------- ---------------
Income from operations
before income taxes 4,454 4,199 255 6.1%
Income tax provision 1,502 1,409 93 6.6%
---------- ---------- ---------------
Net income $ 2,952 $ 2,790 $ 162 5.8%
========== ========== ===============
Basic earnings per common
share $ 0.34 $ 0.32 $ 0.02 6.3%
========== ========== ===============
Diluted earnings per common
share $ 0.33 $ 0.30 $ 0.03 10.0%
========== ========== ===============
Shares and equivalents
outstanding 9,021,000 9,442,000
Sales by concept:
Benihana $ 50,292 $ 50,027 $ 265 0.5%
Haru 6,708 6,195 513 8.3%
RA Sushi 3,116 - 3,116
Sushi Doraku 426 501 (75) -15.0%
---------- ---------- ------
Total restaurant sales $ 60,542 $ 56,723 $3,819
========== ========== ======
Comparable sales by
concept:
Benihana $ 48,571 $ 49,507 $ (936) -1.9%
Haru 6,708 6,195 513 8.3%
Sushi Doraku 426 304 122 40.1%
---------- ---------- ------
Total restaurant sales $ 55,705 $ 56,006 $ (301) -0.5%
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