Champps Entertainment, Inc. Announces First Quarter Diluted Earnings Per Share of $0.11.LITTLETON Littleton, city (1990 pop. 33,685), seat of Arapahoe co., N central Colo.; platted 1812, inc. 1890. It is a suburb south of Denver in an irrigated farm area. , Colo. -- Champps Entertainment, Inc. (Nasdaq:CMPP CMPP Centre Médico-Psycho-Pédagogique ) today announced results for its fiscal 2005 first quarter ended October October: see month. 3, 2004. Highlights for the quarter included: --Revenues increased 13.5 percent over the same quarter in the prior year to $55,497,000. First quarter fiscal 2005 had 14 operating weeks compared to 13 operating weeks for fiscal 2004. --Restaurant operating and franchise contribution increased 18.8 percent to $5,730,000. --Income from operations increased 131 percent to $1,884,000. --Earnings per 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. share increased 120 percent to $0.11. Total revenues for the first quarter increased 13.5 percent to $55,497,000 versus $48,885,000 for the first quarter of last fiscal year. The revenue increase was primarily due to the first quarter of 2005 being a 14 week period while the first quarter of 2004 was a 13 week period. Earnings per diluted share for the first quarter were $0.11 compared with $0.05 for the same quarter last year. Net income for the first quarter was $1,394,000 compared with $604,000 reported in the comparable quarter a year ago. Comparable 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 increased 4.6 percent for the first quarter of fiscal 2004 versus our first quarter of last year. Comparable food sales increased 4.3 percent while comparable alcohol sales increased 5.6 percent. This increase was the result of an additional week in this year's first quarter versus last year's first quarter. Total restaurant contribution margin was 10.1 percent for the first quarter this year compared with 9.6 percent for the comparable period last year. Strategic initiatives implemented in our second quarter of fiscal 2004 continued to positively impact margins as product costs improved 30 basis points versus last year and labor costs improved 100 basis points versus last year. Other 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. increased 70 basis points versus last year primarily as the result of higher utility costs, marketing expenses and repairs and maintenance. Occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy expense improved 10 basis points for the first quarter as compared to the first quarter of last year. Depreciation and amortization expense increased 20 basis points for the first quarter as compared to the first quarter of last year. Both occupancy expenses and depreciation and amortization were positively impacted by the extra week of sales as a percent of sales. Preopening expenses for the quarter were $213,000 or $0.02 per diluted share compared to $839,000 or $0.07 per diluted share for the comparable quarter in the prior year. The Company did not open any restaurants this quarter compared to three restaurant openings in the comparable period last year. General and administrative expenses for the first quarter were $3,091,000 or 5.6 percent of revenues compared to $2,548,000 or 5.2 percent of revenues in the comparable period last fiscal year. General and administrative expenses increased primarily due to the addition of field support staff and staff relocations to assist with the growth of our concept. Expenses related to the training of new restaurant managers and their travel and temporary housing during their training periods have been reclassified from restaurant operating expenses to general and administrative expenses for fiscal 2005. This reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. was made to provide better comparability with other restaurant companies. As a result, amounts on the 2004 income statement have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the fiscal 2005 presentation. The amounts reclassified to general and administrative expense on the 2004 income statement were $79,000 of labor costs and $14,000 of other operating expenses. The Company incurred $257,000 and $31,000, respectively, for management training and travel and temporary housing during training in the first quarter of fiscal 2005. Expenses related to predecessor predecessor - parent companies increased as the result of the accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. of a $301,000 grant of attorneys' fees related to the McCrea McCrea may refer to: People
The Company has successfully opened one restaurant in the second quarter of fiscal 2005 and intends to open one more restaurant in the quarter. Both restaurants are located in the Philadelphia Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. market where there are two existing Champps restaurants. In addition, the Company intends to open one restaurant in Cleveland Cleveland, former county, England Cleveland, former county, NE England, created under the Local Government Act of 1972 (effective 1974). It was composed of the county boroughs of Hartlepool and Teeside and parts of the former counties of Durham and during the third quarter. We are currently in negotiations on three additional restaurant sites that we anticipate will open in the fourth quarter of fiscal 2005. William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack H. Baumhauer, Champps' chairman, president and chief executive officer, commented: "Our first quarter earnings were in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with our expectations. We continue to see improvement in our restaurant operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: as a result of our initiatives over the past year. These efforts resulted in a 50 basis point improvement to our restaurant operating contribution margin this quarter versus the comparable period last year. Sales for the first quarter were below expectations. Several factors impacted our sales negatively this quarter including the Olympics Olympics Sports medicine An international competition among (traditionally) nonprofessional athletes trained in a particular summer or winter sport, which is held every 4 yrs in a selected city. See Paralympics, Special Olympics, World Medical Games. , the presidential debates and adverse weather in Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and and the Southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: Littleton, Colo.-based Champps Entertainment, Inc. owns and operates 49 and franchises 12 Champps restaurants in 22 states. Champps, which competes in the upscale casual dining segment, offers an extensive menu consisting of freshly prepared food, coupled with exceptional service. Champps creates an exciting environment through the use of videos, music, sports and promotions. Certain statements made in this press release 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. based on management's current experience and expectations. These forward looking statements are made pursuant to the 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. provisions of 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. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Among the factors that could cause actual results to differ materially from those provided in this press release are: the ability of the Company to open and operate additional restaurants profitably, the impact of intense competition in the casual dining restaurant industry, the Company's ability to control restaurant operating costs operating costs npl → gastos mpl operacionales , which are impacted by commodity prices, minimum wage and other employment laws, fuel and energy costs, consumer perceptions of food safety, changes in consumer tastes and trends, and general business and economic conditions. Information on significant potential risks and uncertainties that may also cause such differences include, but are not limited to, those mentioned by the Company from time to time in its filings with the Securities and Exchange Commission. The words "may," "believe," "estimate," "expect," "plan," "intend," "project," "anticipate," "should" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and, therefore, readers should not place undue reliance on these forward-looking statements.
CHAMPPS ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
-----------------------------
October 3, September 28,
2004 2003
------------- --------------
Revenue
Sales $55,344 $48,747
Franchising and royalty, net 153 138
------------- --------------
Total revenue 55,497 48,885
------------- --------------
Costs and expenses
Restaurant operating expenses:
Product costs 15,366 13,710
Labor costs 17,619 15,985
Other operating expenses 9,199 7,737
Occupancy 4,967 4,445
Depreciation and amortization 2,616 2,185
------------- --------------
Total restaurant operating
expenses 49,767 44,062
------------- --------------
Restaurant operating and
franchise contribution 5,730 4,823
General and administrative
expenses 3,091 2,548
Pre-opening expenses 213 839
Other (income) expense (142) 33
------------- --------------
Income from operations 2,568 1,403
Other (income) expense:
Interest expense and income,
net 374 549
Expenses related to
predecessor companies 310 39
------------- --------------
Income before income taxes 1,884 815
Income tax expense 490 211
------------- --------------
Net income $ 1,394 $ 604
============= ==============
Basic income per share: $ 0.11 $ 0.05
============= ==============
Diluted income per share: $ 0.11 $ 0.05
============= ==============
Basic weighted average shares
outstanding 12,822 12,775
============= ==============
Diluted weighted average
shares outstanding 13,079 12,860
============= ==============
Supplemental Information -- Restaurant Operating Expenses
(Stated as a percentage of sales)
Three Months Ended
-----------------------------
October 3, September 28,
2004 2003
------------- --------------
Product costs 27.8% 28.1%
Labor costs 31.8% 32.8%
Other operating expenses 16.6% 15.9%
Occupancy 9.0% 9.1%
Depreciation and amortization 4.7% 4.5%
Sales $55,344 $48,747
Less: Total restaurant
operating expenses 49,767 44,062
------------- --------------
Restaurant contribution $ 5,577 $ 4,685
------------- --------------
Total restaurant contribution
margin 10.1% 9.6%
------------- --------------
General and administrative
expense 5.6% 5.2%
(Stated as a percentage of ------------- --------------
total revenue)
Champps Entertainment, Inc.
Condensed Consolidated Balance Sheet
(In thousands, except share data)
(Unaudited)
October 3, June 27,
2004 2004
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ - $ 1,449
Restricted cash - 101
Accounts receivable 3,272 3,046
Inventories 4,206 4,394
Prepaid expenses and other current assets 3,371 1,782
Deferred tax assets 2,825 2,825
----------- -----------
Total current assets 13,674 13,597
Property and equipment, net 90,983 89,153
Goodwill 5,069 5,069
Deferred tax assets 20,828 21,093
Other assets, net 2,764 2,581
----------- -----------
Total assets $133,318 $131,493
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft $ 1,753 $ -
Accounts payable 4,055 4,315
Accrued expenses 8,840 9,178
Current portion of long-term debt 955 942
----------- -----------
Total current liabilities 15,603 14,435
Long-term debt, net of current portion 16,903 17,621
Other long-term liabilities 20,904 20,897
----------- -----------
Total liabilities 53,410 52,953
----------- -----------
Commitments and contingencies
Shareholders' equity
Preferred stock ($.01 par value per share;
authorized 5,000,000 shares; none issued) - -
Common stock ($.01 par value per share;
authorized 30,000,000 shares; 13,319,777 and
13,285,253 shares issued at October 3, 2004
and June 27, 2004, respectively) 133 133
Additional paid-in capital 90,591 90,393
Accumulated deficit (7,233) (8,627)
Accumulated other comprehensive income - 224
Treasury stock, at cost (471,588 shares) (3,583) (3,583)
----------- -----------
Total shareholders' equity 79,908 78,540
----------- -----------
Total liabilities and shareholders' equity $133,318 $131,493
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