Buffets, Inc. Announces Results for Quarter Ended April 9, 2003.Business Editors EAGAN, Minn.--(BUSINESS WIRE)--May 8, 2003 Buffets, Inc., the nation's leading owner and operator of buffet-style restaurants, today reported results for the third quarter of its 2003 fiscal year (the 16-week period ended April 9, 2003). Buffets reported sales for the quarter ended April 9, 2003, of $293.7 million, versus sales for the 16-week period ended April 24, 2002 (referred to as the comparable quarter in the prior year) of $320.8 million. The 8.4% decline in sales for the quarter ended April 9, 2003 was primarily attributable to a decline in same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of of 6.4%. This same store sales decline reflected a 1.4% increase in pricing and a 7.8% decline in guest traffic. Guest traffic was adversely impacted by severe winter weather in December December: see month. , January January: see month. and February February: see month. , the Iraqi War and an Easter Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it calendar shift. Easter was celebrated in March in the comparable quarter in the prior year, but occurs in the fourth quarter in this fiscal year. Additionally, operating weeks were down in the most recent quarter by approximately 3.2% compared to the comparable quarter in the prior year, primarily due to the closure of 18 under-performing units over the past 12 months. The impact of these closures was partially offset by the opening of five units over the past 12 months. Average weekly sales per unit of $47,645 for the quarter ended April 9, 2003 decreased by 5.5% as compared to average weekly sales per unit during the comparable quarter in the prior year. Net income for the 16-week period ended April 9, 2003 was $1.7 million, as compared with net income of $8.4 million for the comparable quarter in the prior year. Sales for the 40-week, year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. period ended April 9, 2003, were $750.4 million, versus sales for the comparable prior year period ended April 24, 2002 of $797.7 million. The 5.9% decline in year-to-date 2003 sales was primarily attributable to a decline in same store sales of 4.4%. This same store sales decline reflected a 1.7% increase in pricing and a 6.1% decline in guest traffic. Additionally, 2003 year-to-date operating weeks were down by approximately 3.4%. Average weekly sales per unit of $48,178 for the year-to-date period ended April 9, 2003 decreased by 2.6% as compared to average weekly sales per unit during the comparable prior year period. Net income was $4.1 million for the 40-week, year-to-date period ended April 9, 2003, compared with net income of $15.2 million for the comparable prior year period. Year-to-date net income for fiscal 2003 included a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge of approximately $5.4 million associated with the completion of a sale and leaseback sale and leaseback The sale of a fixed asset that is then leased by the former owner from the new owner. A sale and leaseback permits a firm to withdraw its equity in an asset without giving up use of the asset. Also called leaseback. transaction with respect to 27 restaurants on December 11, 2002, largely offset by a $5.0 million reduction in goodwill amortization attributable to the adoption of Statement of Accounting Standards No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. " in January 2002. Believing high quality food offerings are key to driving traffic, on April 10th Buffets launched a Barbecue barbecue [West Indian or South American], in the United States, traditionally an open-air gathering, political or social, in which meats are roasted whole over a pit of embers and food and drink are liberally enjoyed. promotion, supported by a national advertising campaign. This promotion, running on Thursdays and Saturdays and featuring "all you care to eat" pork ribs Pork ribs are a type of food dish popular in North America and Asian cuisine. Pork and bones from a pig's ribcage are cooked by smoking (cooking), grilling, or baking together (usually with a sauce, primarily barbecue sauce), and then served. , beef ribs, barbeque beef, sausage sausage, food consisting of finely chopped meat mixed with seasonings and, often, other ingredients, all encased in a thin membrane. Although sausages were made by the ancient Greeks and Romans, they were usually plain and unspiced; in the Middle Ages people began to and a range of complimentary side dishes side dish n. A dish served as an accompaniment to the main course. Noun 1. side dish - a dish that is served with, but is subordinate to, a main course entremets, side order , will run through much of the remainder of fiscal 2003. Buffets is also testing multiple new food offerings, including prime rib, steaks, pork pork, flesh of swine prepared as food, one of the principal commodities of the meatpacking industry. Pork has long been a staple food in most of the world, although religious taboos have limited its use, especially among Jews and Muslims. loin loin (loin) the part of the back between the thorax and pelvis. loin n. The part of the body on either side of the spinal column between the ribs and the pelvis. , salmon, a broad variety of fresh vegetables, fresh bread and expanded dessert offerings for roll-out in fiscal 2004. While many new products will be rolled-out nationally, some will target specific regions. Buffets announced that its Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , David Goronkin, has resigned on amicable am·i·ca·ble adj. Characterized by or exhibiting friendliness or goodwill; friendly. [Middle English, from Late Latin am terms to pursue his personal leadership goals. Mr. Goronkin's responsibilities will be assumed by Buffets' Chief Executive Officer, Kerry Kerry, county (1991 pop. 121,894), 1,815 sq mi (4,701 sq km), SW Republic of Ireland. The county town is Tralee. Kerry consists of a series of mountainous peninsulas that extend into the Atlantic. Kramp. Buffets will be discussing its operating results in a conference call on Thursday Thursday: see week. , May 8, 2003, at 3:00 p.m. (Eastern). The conference call phone and ID numbers are 1-888-228-7864 and 9691043, respectively. The conference call leader is Kerry Kramp, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Buffets. The conference call will be available for playback Playback could mean:
Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , May 16, 2003 at 6:00 p.m. (Eastern). Playback can be reached by dialing 1-800-642-1687. Request conference ID number 9691043. Information regarding non-GAAP financial measures discussed in the conference call can be found at www.buffet A buffet is a meal serving system where patrons serve themselves. It is a popular method of feeding large numbers of people with minimal staff. The term is also used to describe a sideboard, an antique form of furniture which was sometimes used to offer the dishes of a buffet meal .com on the financial information page. Buffets, Inc. currently operates 385 restaurants in 35 states (364 buffet restaurants, principally as Old Country Buffet Old Country Buffet is a buffet-style, sit-down restaurant chain headquartered in Eagan, Minnesota with locations throughout the United States. Menu Items Old Country Buffet restaurants feature a wide spread of menu items, in the following categories: Its wide selection of food include pizza, hot dogs, hot wings, sliced ham among many others. (R), 13 Original Roadhouse road·house n. An inn, restaurant, or nightclub located on a road outside a town or city. roadhouse Noun a pub or restaurant at the side of a road Noun 1. Grill Grill may refer to: In food:
A lake on the California-Nevada border west of Carson City, Nevada. It is a popular resort area. Joe's Joe's, known as G.I. Joe’s prior to April 1 2007, is a sporting goods and auto parts retailer dealer based in Oregon. The Wilsonville, Oregon based company has 26 stores in Oregon and Washington. The company is planning on opening two stores in Idaho in 2007. Famous Steakhouse steak house or steak·house n. A restaurant that specializes in beefsteak dishes. steakhouse Noun a restaurant that specializes in steaks Noun 1. (R) restaurants) and franchises 23 buffet restaurants in ten states. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 The statements contained in this release which 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. that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, forward-looking statements. Buffets has tried, whenever possible, to identify these forward-looking statements using words such as "projects," "anticipates," "believes," "estimates," "expects," "plans," "intends," and similar expressions. Similarly, statements herein that describe Buffets' business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. The risks and uncertainties involving forward-looking statements include, but are not limited to, general business and economic conditions, negative publicity, the impact of competition, the seasonality of Buffets' business, adverse weather conditions, future commodity prices, fuel and utility costs, labor costs, employment and environmental laws, governmental regulations, and inflation. For a detailed discussion of risks and uncertainties that you should consider, please refer to the "Risk Factors" section contained in Buffets' registration statement filed with the Securities and Exchange Commission on December 27, 2002. These statements reflect Buffets' current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this release are likely to cause these statements to become outdated out·dat·ed adj. Out-of-date; old-fashioned. outdated Adjective old-fashioned or obsolete Adj. 1. with the passage of time. Buffets disclaims any obligation to update forward-looking statements.
Buffets, Inc. and Subsidiaries
Condensed consolidated balance sheets
(Unaudited)
(In thousands, except share data)
July 3, April 9,
2002 2003
---------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $8,304 $9,205
Receivables 8,682 6,559
Inventories 18,632 18,485
Prepaid expenses and other current assets 10,086 7,926
Deferred income taxes 19,000 14,400
Due from parent 12 6
---------- ---------
Total current assets 64,716 56,581
PROPERTY AND EQUIPMENT, net 198,350 165,724
GOODWILL 312,163 312,163
ASSETS HELD FOR SALE 24,952 22,794
DEFERRED INCOME TAXES - 3,425
OTHER ASSETS, net 15,445 15,088
---------- ---------
Total assets $615,626 $575,775
========== =========
LIABILITIES AND SHAREHOLDER'S DEFICIT
CURRENT LIABILITIES:
Accounts payable $37,419 $43,184
Accrued liabilities 92,442 80,421
Income taxes payable 2,804 2,707
Current maturities of long-term debt 2,450 2,048
---------- ---------
Total current liabilities 135,115 128,360
LONG-TERM DEBT, net of current maturities 463,767 423,021
DEFERRED INCOME TAXES 175 -
DEFERRED LEASE OBLIGATIONS 18,829 19,385
OTHER LONG-TERM LIABILITIES 4,525 7,708
---------- ---------
Total liabilities 622,411 578,474
SHAREHOLDER'S DEFICIT
Common stock; $.01 par value, 100 shares
authorized; 100 shares issued and outstanding - -
Accumulated deficit (6,785) (2,699)
---------- ---------
Total shareholder's deficit (6,785) (2,699)
---------- ---------
Total liabilities and shareholder's
deficit $615,626 $575,775
========== =========
Buffets, Inc. and Subsidiaries
Condensed consolidated income statements
(Unaudited)
(In thousands)
Sixteen Weeks Ended Forty Weeks Ended
------------------- -------------------
April 24, April 9, April 24, April 9,
2002 2003 2002 2003
--------- --------- --------- ---------
RESTAURANT SALES $320,755 $293,684 $797,668 $750,371
RESTAURANT COSTS:
Food 99,838 94,486 246,789 237,157
Labor 100,527 95,153 250,342 241,062
Direct and occupancy 71,819 69,239 180,028 174,209
--------- --------- --------- ---------
Total restaurant costs 272,184 258,878 677,159 652,428
ADVERTISING EXPENSES 8,721 6,726 19,915 20,778
GENERAL AND ADMINISTRATIVE
EXPENSES 15,980 13,682 39,734 35,208
LOSS ON SALE AND LEASEBACK
TRANSACTION - - - 5,434
GOODWILL AMORTIZATION - - 4,967 -
--------- --------- --------- ---------
OPERATING INCOME 23,870 14,398 55,893 36,523
INTEREST EXPENSE 10,569 12,339 29,142 32,231
INTEREST INCOME (180) (77) (609) (308)
OTHER INCOME (343) (320) (890) (913)
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 13,824 2,456 28,250 5,513
INCOME TAX EXPENSE 5,406 748 13,007 1,427
--------- --------- --------- ---------
Net income $8,418 $1,708 $15,243 $4,086
========= ========= ========= =========
Buffets, Inc. and Subsidiaries
Condensed consolidated statements of cash flows
(Unaudited)
(In thousands)
Sixteen Weeks Ended Forty Weeks Ended
------------------- ------------------
April 24, April 9, April 24, April 9,
2002 2003 2002 2003
--------- --------- --------- --------
OPERATING ACTIVITIES:
Net income $8,418 $1,708 $15,243 $4,086
Adjustments to reconcile net
income to net cash provided
by (used in) operating
activities:
Depreciation and
amortization 13,000 10,796 37,399 28,890
Amortization of debt
issuance cost 1,061 638 2,864 1,526
Deferred income taxes (1,581) (92) (886) 1,000
Accretion of original issue
discount 238 227 595 568
Deferred interest 404 - 991 -
Loss on disposal of assets 28 365 244 582
Loss on sale and leaseback
transaction - - - 5,434
Changes in assets and
liabilities:
Receivables 79 101 (4,552) 2,265
Inventories (42) (284) 579 147
Prepaid expenses and
other current assets 1,423 (3,447) (229) 2,160
Due from parent (27) 103 (14) 6
Accounts payable 1,528 8,434 177 7,757
Accrued and other
liabilities (3,862) (25,446) 6,145 (10,894)
Income tax payable 5,578 1,168 2,583 (97)
--------- --------- --------- --------
Net cash provided by
(used in) operating
activities 26,245 (5,729) 61,139 43,430
--------- --------- --------- --------
INVESTING ACTIVITIES:
Proceeds from sale and
leaseback transaction 2,281 - 41,356 22,580
Purchase of fixed assets (7,931) (6,379) (25,969) (20,828)
Proceeds from sale of other
assets - 747 1,651 747
Purchase of other assets (596) (166) (970) (233)
--------- --------- --------- --------
Net cash provided by
(used in) investing
activities (6,246) (5,798) 16,068 2,266
--------- --------- --------- --------
FINANCING ACTIVITIES:
Repayment of debt (33,660) (18,568) (78,556) (41,716)
Debt issuance costs - (322) (823) (3,079)
--------- --------- --------- --------
Net cash used in
financing
activities (33,660) (18,890) (79,379) (44,795)
--------- --------- --------- --------
NET CHANGE IN CASH AND CASH
EQUIVALENTS (13,661) (30,417) (2,172) 901
CASH AND CASH EQUIVALENTS,
beginning of period 27,555 39,622 16,066 8,304
--------- --------- --------- --------
CASH AND CASH EQUIVALENTS, end
of period $13,894 $9,205 $13,894 $9,205
========= ========= ========= ========
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