Champps Entertainment, Inc. Reports Fiscal 2002 Third-Quarter Results; Revenue Increased 24.5 Percent for the Quarter and 16.3 Percent for the Nine-Month Period.Business Editors ENGLEWOOD Englewood (ĕng`gəlw  d).1 City (1990 pop. 29,387), Arapahoe co., N central Colo., on the South Platte River, a residential and industrial suburb of Denver; inc. 1903. , Colo.--(BUSINESS WIRE)--April 23, 2002 Champps Entertainment, Inc. (Nasdaq:CMPP CMPP Centre Médico-Psycho-Pédagogique ) today announced results for the third quarter and the nine months ended March 31, 2002. Total revenues for the third quarter increased 24.5 percent to $41,230,000 versus $33,104,000 for the third quarter of last year. Restaurant operating and franchise contribution increased 22.7 percent to $5,012,000 versus $4,085,000 for the third quarter last year. Net income for the quarter was $1,766,000, or $0.14 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, compared with $9,326,000, or $0.75 per diluted share, for the same period last year. Proforma Proforma A financial projection based on assumptions. net income for the quarter prior to the recording of expenses related to predecessor predecessor - parent companies of $22,000 was $1,788,000, or $0.14 per diluted share, compared to proforma net income of $0.15 per diluted share for the same period last year prior to the recording of expenses related to predecessor companies of $534,000, a loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $77,000 and a tax benefit of $8,073,000 from the recognition of a deferred tax asset. Total revenue for the nine months ended March 31, 2002, reached $116,620,000 versus $100,251,000 for the first nine months of last year. Net income for the first nine months of fiscal 2002 was $3,215,000, or $0.25 per diluted share, versus $13,221,000, or $1.08 per diluted share, for the same period last year. Proforma net income for the nine months ended March 31, 2002, was $3,673,000, or $0.29 per diluted share, compared to proforma net income of $5,759,000, or $0.47 per diluted share, for the same period last year. During the first nine months of fiscal 2002, expenses related to predecessor companies of $305,000 and discontinued operations of $153,000 were recorded. During the same period last year, expenses related to predecessor companies of $534,000, a loss from discontinued operations of $77,000, and a benefit from the recognition of a deferred tax asset of $8,073,000 were recorded. Preopening expenses were $486,000 this quarter, or $0.04 per diluted share, compared to $93,000, or $0.01 per diluted share, for the third quarter last year. This increase in preopening expenses was primarily the result of successfully opening one new Champps restaurant this quarter compared to no new restaurant openings in the same period last year. The new restaurant was opened in Durham, North Carolina Durham is a city in the U.S. state of North Carolina. It is the county seat of Durham CountyGR6 and is the fourth-largest city in the state by population. . The Company also intends to open a new Champps restaurant in Littleton, Colorado The City of Littleton is a home rule municipality located in the Denver Metropolitan Area of the State of Colorado. As of 2005, the city is estimated to have a total population of 40,396.[1] Littleton is the 17th most populous city in the State of Colorado. , in May 2002. Preopening expenses for the nine months ended March 31, 2002, were $2,202,000, or $0.17 per diluted share, versus $343,000, or $0.03 per diluted share, for the same period last year. 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 decreased 0.4 percent for the third quarter versus a 0.9 percent decrease reported in the same period last year. The comparable same store sales for the period ended March 31, 2002, were adversely impacted by 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 falling in the third quarter this year versus the fourth quarter last year. General and administrative expenses were $2,240,000 and $6,359,000 for the third quarter and nine months ended March 31, 2002, respectively, versus $1,791,000 for the third quarter last year and $5,351,000 for the nine months last year. 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: "We are pleased to report strong operating results for our third quarter. We successfully opened our fifth Champps restaurant of the fiscal year this quarter and will end the fiscal year with six new Champps restaurants. We are planning to open ten to twelve new Champps restaurants in fiscal 2003." Englewood, Colo.-based Champps Entertainment, Inc. currently owns and operates 33 and franchises 13 Champps Americana Americana, term used to describe material printed in or about the Americas, or written by Americans; usually restricted to the formative period in the history of the two continents. restaurants in 18 states. Champps, which competes in the upscale casual dining segment, offers an extensive menu consisting of freshly prepared food, coupled with exceptional service. Champps presents an exciting environment through the use of videos, music, sports, promotions and programming. Champps Entertainment management will host an investment community conference call on April 24, 2002, 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to discuss third-quarter fiscal 2002 results. To hear the call in a listen-only mode, participants must dial 800/521-5414 and refer to reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. no. 1725446, five minutes prior to the start of the call, or visit the company's web site at www.champps.com and click on the investor relations Investor relations The process by which the corporation communicates with its investors. icon to hear a live web simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. and replay of the call. Statements made in this press release include 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. 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. Information on significant potential risks and uncertainties that may 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 "believe," "estimate," "expect," "intend," "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)
Three Months Ended Nine Months Ended
------------------ -----------------
March 31, April 1, March 31,April 1,
2002 2001 2002 2001
--------- -------- -------- ---------
Revenues
Sales $ 41,066 $ 32,970 $ 116,149 $ 99,789
Franchising and royalty, net 164 134 471 462
-------- -------- --------- --------
Total revenues 41,230 33,104 116,620 100,251
-------- -------- --------- --------
Costs and expenses
Restaurant operating expenses:
Product costs 11,612 9,547 32,963 28,944
Labor costs 13,249 10,370 37,550 31,545
Other operating expenses 6,084 5,049 17,754 14,991
Occupancy 3,638 2,703 9,879 8,068
Depreciation and amortization 1,635 1,350 4,720 4,115
-------- -------- --------- --------
Total restaurant operating
expenses 36,218 29,019 102,866 87,663
Restaurant operating and franchise
contribution 5,012 4,085 13,754 12,588
Preopening 486 93 2,202 343
General and administrative
expenses 2,240 1,791 6,359 5,351
Expenses related to predecessor
companies 22 534 305 534
-------- -------- --------- --------
Income from operations 2,264 1,667 4,888 6,360
Interest expense, net 462 337 1,391 955
-------- -------- --------- --------
Income from continuing operations 1,802 1,330 3,497 5,405
Loss from discontinued operations,
net of tax -- 77 153 77
-------- -------- --------- --------
Income before provision for income
taxes 1,802 1,253 3,344 5,328
Provision (benefit) for income
taxes 36 (8,073) 129 (7,893)
-------- -------- --------- --------
Net income $ 1,766 $ 9,326 $ 3,215 $ 13,221
======== ======== ========= ========
Basic income (loss) per share:
Income before discontinued
operations $ 0.15 $ 0.79 $ 0.28 $ 1.13
Loss from discontinued operations -- (0.01) (0.01) (0.01)
-------- -------- --------- --------
Net income $ 0.15 $ 0.78 $ 0.27 $ 1.12
======== ======== ========= ========
Diluted income (loss) per share:
Income before discontinued
operations $ 0.14 $ 0.75 $ 0.26 $ 1.08
Loss from discontinued operations -- -- (0.01) --
-------- -------- --------- --------
Net income $ 0.14 $ 0.75 $ 0.25 $ 1.08
======== ======== ========= ========
Basic weighted average shares
outstanding 12,129 11,929 12,083 11,829
Diluted weighted average shares
outstanding 12,963 12,506 12,768 12,273
Supplemental Information -- Operating Expenses
(Stated as a percentage of sales)
Product costs 28.3% 29.0% 28.4% 29.0%
Labor costs 32.3% 31.4% 32.3% 31.6%
Other operating costs 14.8% 15.3% 15.3% 15.0%
Occupancy 8.8% 8.2% 8.5% 8.1%
Depreciation and amortization 4.0% 4.1% 4.1% 4.1%
-------- -------- --------- --------
Total restaurant contribution
margin 11.8% 12.0% 11.4% 12.2%
======== ======== ========= ========
General and administrative expenses
(Stated as a percentage of
revenues) 5.4% 5.4% 5.5% 5.3%
-------- -------- --------- --------
Selected Consolidated Balance Sheet
Information
March 31, July 1,
2002 2001
-------- --------
Cash and marketable securities $ 7,416 $ 1,261
Total assets 93,919 79,458
Debt 19,622 15,062
Capital lease obligations 2,866 2,031
Stockholders' equity 48,806 44,616
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