WICHITA, Kan., Jan. 28, 2002 (PRIMEZONE) -- Lone Star Steakhouse & Saloon, Inc. (Nasdaq:STAR) announced operating results for the fourth quarter and the fiscal year ended December 25, 2001. For the sixteen week fourth quarter ended December 25, 2001, adjusted net income (net income before unusual charges and credits, including non-cash stock compensation) increased 377% to $11,819,000 or $0.49 per share ($0.46 diluted) compared to $2,477,000 or $0.10 per share ($0.10 diluted) for the same quarter last year. Unusual items net of applicable tax for the fourth quarter of 2001 was a net charge of $8,499,000 or $0.35 per share compared to a net charge of $1,855,000 or $0.07 per share in 2000 resulting in net earnings of $3,320,000 or $0.14 per share ($0.13 diluted) for the fourth quarter 2001 compared to $622,000 or $0.03 per share ($.03 diluted) in 2000.
Unusual items, primarily non-cash compensation expense resulting from the increase in the price of the Company's stock, "Dine for America" donation, and asset impairment charges net of applicable tax for fiscal year 2001 was a net charge of $14,421,000 or $0.60 per share compared to a net charge of $2,032,000 or $0.07 per share in fiscal 2000 resulting in net earnings of $13,256,000 or $0.55 per share ($0.52 diluted) for fiscal 2001 compared to $16,130,000 or $0.62 per share ($0.61 diluted) for fiscal 2000.
For fiscal 2001, adjusted net income increased 52% to $27,677,000 or $1.15 per share ($1.09 diluted) compared to $18,162,000 or $0.69 ($0.69 diluted) last year.
Adjusted EBITDA for the fourth quarter was $27,146,000, up 93% compared to the same quarter last year, and for the year, $73,229,000, up 21.0% compared to fiscal 2000.
Fourth quarter domestic margins were improved due to higher average unit sales, lower beef prices, continued improvement in operating controls, and more effective and lower cost advertising in the Lone Star restaurants.
Unusual items for the fourth quarter and year to date include non-cash stock compensation charges, a contribution to the American Red Cross in connection with the restaurant industry's "Dine for America" program as the Company contributed 100% of its restaurant sales on October 11, 2001; gain on sale of assets, provisions for asset impairment and store closings. Asset impairment charges for fiscal 2001 were primarily related to Australian operations while all such charges for fiscal 2000 were related to Australia. A summary of the unusual charge and (credit) items net of applicable tax is set forth below in thousands of dollars, except per share amounts:
For the fourth quarter ended
Dec. 25, 2001 Dec. 26, 2000
Per Per
Amount Share Amount Share
-------- ------ ------- ------
Non-cash stock
compensation $ 5,394 $0.23 $ - $ -
Contribution - "Dine
for America" 1,327 0.05 - -
Asset impairment and
store closings 1,822 0.07 2,480 0.10
Gain on sale of assets (44) - (625) (.03)
-------- ------ ------- ------
$ 8,499 $0.35 $1,855 $0.07
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For the fiscal year ended
Dec. 25, 2001 Dec. 26, 2000
Per Per
Amount Share Amount Share
-------- ------ ------- ------
Non-cash stock
compensation $12,491 $0.52 $ - $ -
Contribution - "Dine
for America" 1,327 0.05 - -
Asset impairment and
store closings 1,822 0.08 2,832 0.10
Gain on sale of assets (1,219) (0.05) (800) (.03)
-------- ------ ------- ------
$14,421 $0.60 $2,032 $0.07
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Fourth quarter revenues increased 6.0% to $181,730,000 from $171,468,000 in the prior year driven by 3.4% comparable store sales growth and the opening of five additional restaurants. For the year, revenues increased 3.8% to $598,017,000 from $575,863,000 in 2000.
Fourth quarter comparable store sales growth was 3.3% for domestic Lone Star Steakhouse & Saloon restaurants, 7.8% for Sullivan's Steakhouse restaurants and (1.3)% for Del Frisco's Double Eagle Steak House restaurants, bringing the fiscal year comparable store sales growth to 1.6%, 12.8%, (1.8)%, respectively. Australian comparable store sales increased 0.9% for the fourth quarter, but declined (5.4)% for the year. Although comparable store sales improved in Australia in the fourth quarter of fiscal 2001, restaurant margins continue to be negatively impacted by the Goods and Services Tax on restaurant sales and the soft Australian economy. The Company closed one Australian restaurant in December 2001 and is not optimistic about significant improvements in Australian sales or operating results in the near future.
During the fourth quarter, the Company re-purchased 122,500 shares of its common stock bringing repurchases for fiscal year 2001 to 468,687 shares.
The Company opened five Lone Star Steakhouse & Saloon restaurants in Flint, Michigan, Findlay, Ohio, Ypsilanti, Michigan, Mt. Pleasant, Michigan and Denver, Colorado during the fourth quarter.
On January 9, 2002, Lone Star Steakhouse & Saloon, Inc. announced a 20% increase of its quarterly cash dividend from $0.125 to $0.15 per share and declared a quarterly dividend payable February 1, 2002 to shareholders of record on January 18, 2002.
As previously announced, the Company has engaged UBS Warburg to advise the Board on alternatives for the Company's strong balance sheet and cash flow, including continued share buy back, acquisitions or other strategies including the possible sale of the Company.
The Company owns and operates 251 domestic Lone Star Steakhouse & Saloon restaurants; fifteen Sullivan's Steakhouse restaurants; and five Del Frisco's Double Eagle Steak House restaurants. There are 25 company-owned international Lone Star Steakhouse & Saloon restaurants. Licensees operate three domestic and two international Lone Star restaurants, and one domestic Del Frisco's Steak House restaurant.
Future reported earnings will continue to be impacted by FASB Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation, an interpretation of APB No. 25," which requires a quarterly non-cash charge for the "in-the-money" component of stock options that have been modified. In subsequent quarters, the charge or credit to non-cash compensation expense will be for the change, either up or down, from the previous reported quarter. This non-cash charge could introduce extreme volatility in reported earnings. For greater clarity and comparability, the Company will continue to report net income both with the non-cash charge or credit and also adjusted to exclude the charge or credit for non-cash stock compensation.
For interested parties, there will be a conference call with management at 9:00 a.m. Central Time on Wednesday, January 30, 2002 to discuss this fourth quarter earnings release. The call-in number is (719) 457-2604 and the confirmation code is 715336. A recorded replay of the conference call will be available from 12:00 p.m. on January 30, 2002 through midnight February 13, 2002. The replay call-in number is (719) 457-0820 and the confirmation code is 715336. A listen-only connection to the conference call, as well as the replay, will be available on the Internet through the Company's Website, www.lonestarsteakhouse.com.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the Company believes the assumptions underlying the forward-looking statements contained herein, including the development plans of the Company, are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements contained in the press release will prove to be accurate.
Lone Star Steakhouse & Saloon, Inc.
Unaudited Summary Financial Data for the Fourth Quarter 2001
(In thousands except for per share amounts)
Dec. 25, Dec. 26,
2001 2000
--------- --------
Current Assets:
Cash and cash equivalents $ 82,919 $ 29,029
Other current assets 20,768 18,119
--------- --------
103,687 47,148
Property and equipment, net 369,883 406,761
Intangibles and other assets 41,459 35,014
--------- --------
$ 515,029 $ 488,923
========= ========
Current liabilities $ 55,402 48,864
Noncurrent liabilities 5,188 2,276
Stockholders' equity 454,439 437,783
--------- --------
$ 515,029 $ 488,923
========= ========
For the fourth quarter ended
Dec. 25, 2001 Dec. 26, 2000
16 Weeks 16 Weeks
$ % $ %
-------- ---- -------- ----
Net Sales $181,730 $171,468
Costs and expenses:
Costs of sales 60,156 33.1 60,554 35.3
Restaurant operating
expenses 83,892 46.2 86,699 50.6
Depreciation and
amortization 8,442 4.6 8,825 5.1
Provision for asset
impairment & store
closings 2,830 1.6 3,769 2.2
------- ---- ------- ----
Restaurant costs
and expenses 155,320 85.5 159,847 93.2
------- ---- ------- ----
Restaurant operating income 26,410 14.5 11,621 6.8
General and administrative
expenses 12,670 7.0 13,369 7.8
Non-cash stock compensation 8,720 4.8 - -
Contribution -
"Dine for America" 2,124 1.1 - -
------- ---- ------- ----
Earnings (loss) from
operations 2,896 1.6 (1,748) (1.0)
Other income 1,073 0.6 1,451 0.8
------- ---- ------- ----
Earnings (loss) before
income taxes 3,969 2.2 (297) (0.2)
Provision (benefit) for
income taxes 649 0.4 (919) (0.5)
------- ---- ------- ----
Net earnings $3,320 1.8 $622 0.3
======= ==== ======= ====
Basic earnings
per share $0.14 $0.03
===== =====
Diluted earnings
per share $0.13 $0.03
===== =====
Average shares
outstanding - Basic 24,048 24,900
Average shares
outstanding - Diluted 25,740 24,914
Restaurants included
at end of period 296 292
Comparable sales growth 3.4% (0.6%)
For the fiscal year ended
Dec. 25, 2001 Dec. 26, 2000
52 Weeks 52 Weeks
$ % $ %
-------- ---- -------- ----
Net Sales $598,017 $575,863
Costs and expenses:
Costs of sales 205,451 34.4 202,343 35.1
Restaurant operating
expenses 283,352 47.4 276,974 48.1
Depreciation and
amortization 27,753 4.6 28,574 5.0
Provision for asset
impairment & store
closings 2,830 0.5 4,310 0.7
------- ---- ------- ----
Restaurant costs
and expenses 519,386 86.9 512,201 88.9
------- ---- ------- ----
Restaurant operating
income 78,631 13.1 63,662 11.1
General and administrative
expenses 41,933 7.0 42,472 7.4
Non-cash stock
compensation 19,985 3.3 - -
Contribution -
"Dine for America" 2,124 0.4 - -
------- ---- ------- ----
Earnings (loss) from
operations 14,589 2.4 21,190 3.7
Other income 3,889 0.7 2,531 0.4
------- ---- ------- ----
Earnings (loss) before
income taxes 18,478 3.1 23,721 4.1
Provision (benefit) for
income taxes 5,222 0.9 7,591 1.3
------- ---- ------- ----
Net earnings $13,256 2.2 $16,130 2.8
======= ==== ======= ====
Basic earnings
per share $0.55 $0.62
===== =====
Diluted earnings
per share $0.52 $0.61
===== =====
Average shares
outstanding - Basic 24,037 26,190
Average shares
outstanding - Diluted 25,324 26,486
Restaurants included
at end of period 296 292
Comparable sales growth 2.2% (0.1%)
Analysis of components of net earnings
and basic per share amounts
For the fourth quarter ended
Dec. 25, 2001 Dec. 26, 2000
16 Weeks 16 Weeks
Per Per
$ Amt. Share $ Amt. Share
-------- ------ -------- ------
Net earnings
excluding
unusual charges $ 11,819 $ 0.49 $ 2,477 $ 0.10
Non-cash stock
compensation
- net of tax (5,394) (0.23) - -
Contribution -
"Dine for America"
- net of tax (1,327) (0.05) - -
Gain on sale of
assets - net of tax 44 - 625 0.03
Provision for asset
impairment and store
closings - net of tax (1,822) (0.07) (2,480) (0.10)
-------- ------ -------- ------
Net earnings $ 3,320 $ 0.14 $ 622 $ 0.03
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For the fiscal year ended
Dec. 25, 2001 Dec. 26, 2000
52 Weeks 52 Weeks
Per Per
$ Amt. Share $ Amt. Share
-------- ------ -------- ------
Net earnings
excluding
unusual charges $ 27,677 $ 1.15 $ 18,162 $ 0.69
Non-cash stock
compensation
- net of tax (12,491) (0.52) - -
Contribution - "Dine
for America" -
net of tax (1,327) (0.05) - -
Gain on sale of
assets - net of tax 1,219 0.05 800 0.03
Provision for asset
impairment and store
closings - net of tax (1,822) (0.08) (2,832) (0.10)
-------- ------ -------- ------
Net earnings $ 13,256 $ 0.55 $16,130 $ 0.62
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