Exhibit 99.1
FOR IMMEDIATE RELEASE
| | |
BUCA, Inc. 1300 Nicollet Mall, Suite 5300 Minneapolis, MN 55403 www.bucainc.com | | Investor Relations Contact: ICR Kathleen Heaney (203) 803-3585 |
BUCA, Inc. Announces 2nd Quarter 2007 Results
Comparable Restaurant Sales Increase 3.7% for Quarter
Minneapolis, Minnesota, August 7, 2007. BUCA, Inc. (NASDAQ: BUCA) today announced financial results for the second fiscal quarter ended July 1, 2007.
Second Quarter Results
Total restaurant sales increased by 1.8% to $62.1 million in the second quarter of fiscal 2007 from $61.0 million in the second quarter of fiscal 2006. The increase in restaurant sales was driven by increased comparable restaurant sales, as no new restaurants opened in the period. Buca di Beppo comparable restaurant sales increased 3.7% for the second quarter of fiscal 2007 as compared to the same period last year. The increase reflects the eleventh consecutive quarter of positive comparable restaurant sales for the Buca di Beppo restaurants.
The company reported a net loss from continuing operations of $3.2 million, or ($0.16) per share, in the second quarter of fiscal 2007 as compared to a net loss from continuing operations of $1.5 million or ($0.07) per share, in the second quarter of fiscal 2006.
Total restaurant costs in the second quarter of fiscal 2007 were $58.5 million, as compared to $56.1 million in the same period of the prior year. As a percentage of restaurant sales, these costs were 94.2% for the second quarter of fiscal 2007, as compared to 92.0% in the second quarter of fiscal 2006. The increase in restaurant costs as a percentage of sales was largely attributable to increased labor as well as higher direct and occupancy costs.
General and administrative expenses were $5.5 million in the second quarter of fiscal 2007, unchanged from the same period in the prior year. General and administrative expenses as a percentage of restaurant sales decreased to 8.8% in the second quarter of fiscal 2007 from 9.1% in the comparable period of fiscal 2006. The decrease in these expenses as a percentage of sales was primarily due to increased sales as compared to the same period in the prior year. Share-based compensation expense was approximately $0.2 million in the quarter.
In the second quarter of fiscal 2007, the company recorded an impairment expense of $0.7 million related to the expected sale of one restaurant property owned by the company.
Wallace B. Doolin, the company’s Chairman and Chief Executive Officer commented, “Over the past two years, we have been focused on building our average unit volumes to competitive levels by increasing guest counts and delivering positive comparable restaurant sales. We are managing through a difficult cost environment for us created by minimum wage increases, elevated repairs and maintenance expenses as well as costs associated with exiting the bottom performers of our system. I am pleased that the initiatives that we have introduced over the past year, and most recently Buca Mio, continue to show broad acceptance by our guests. We believe positive guest counts are the critical measure of success being built in our brand. Our successes have enabled us to report eleven consecutive quarters of comparable restaurant sales increases and consistently outperform the industry in that area as measured by Knapp Track.” Mr. Doolin, added, “We remain committed to on-going improvement of our core business and look forward to resuming growth by opening new Buca di Beppo restaurants in 2008.”
First Two Quarters Results
For the first two quarters of fiscal 2007, total restaurant sales were $124.9 million compared to $125.9 million in the same period in the prior year. Comparable restaurant sales for the company’s Buca di Beppo restaurants increased 1.9% for the first two quarters of fiscal 2007. The company reported net loss from continuing operations of $5.8 million for the first two quarters of fiscal 2007, or ($0.29) per share, compared to a net loss from continuing operations of $0.3 million, or ($0.01) per share, in the first two quarters of fiscal 2006.
For the first two quarters of fiscal 2007, total restaurant costs were $117.8 million, or 94.4% of restaurant sales, up from 91.2% of restaurant sales in the same period of fiscal 2006. The increase as a percentage of sales was due primarily to higher labor and direct and occupancy costs. General and administrative expenses were $11.1 million in the first two quarters of fiscal 2007, as compared to $9.8 million in the first two quarters of fiscal 2006. The increase in general and administrative expenses in dollars and as a percentage of revenue reflects a $1.8 million insurance settlement reported during the first half of fiscal 2006 which reduced general and administrative expenses for that quarter. Share-based compensation expense was $0.6 million for the first two quarters of fiscal 2007, compared to $0.5 million in the prior year.
During the first two quarters of fiscal 2007 the company closed two restaurants and recorded an impairment expense of $0.8 million primarily related to the expected sale of one restaurant property owned by the company.
Conference Call
BUCA, Inc. will host a conference call on Tuesday, August 7, 2007 at 4:30 p.m. Eastern Time (3:30 p.m. Central Time) to discuss these results. Wallace B. Doolin, the company’s Chairman and Chief Executive Officer, and Kaye R. O’Leary, the company’s Chief Financial Officer, will be hosting the call. The participant call in number is 1-800-545-9704 or 1-913-905-1805 for international callers. The passcode is 6963614. The call will be webcast and can be accessed from the following link:http://viavid.net/dce.aspx?sid=00004257. If you are unable to join the call, a replay will be available beginning at 7:30 p.m. Eastern Time on August 7, 2007 and can be accessed by dialing 1-888-203-1112 or 1-719-457-0820 (international), passcode 6963614.
About the Company:
BUCA, Inc. owns and operates 91 highly acclaimed Italian restaurants under the name Buca di Beppo in 25 states and the District of Columbia.
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BUCA, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Thirteen Weeks Ended | | | Twenty-Six Weeks Ended | |
| | | July 1, 2007 | | | June 25, 2006 | | | July 1, 2007 | | | June 25, 2006 | |
Restaurant sales | | $ | 62,084 | | | $ | 61,019 | | | $ | 124,895 | | | $ | 125,861 | |
Restaurant costs: | | | | | | | | | | | | | | | | |
Product | | | 15,286 | | | | 15,142 | | | | 30,664 | | | | 31,089 | |
Labor | | | 21,514 | | | | 20,166 | | | | 43,374 | | | | 40,911 | |
Direct and occupancy | | | 18,504 | | | | 17,569 | | | | 37,551 | | | | 36,280 | |
Depreciation and amortization | | | 3,183 | | | | 3,258 | | | | 6,237 | | | | 6,509 | |
| | | | | | | | | | | | | | | | |
Total restaurant costs | | | 58,487 | | | | 56,135 | | | | 117,826 | | | | 114,789 | |
| | | | |
General and administrative expenses | | | 5,479 | | | | 5,529 | | | | 11,103 | | | | 9,789 | |
Loss on impairment of long-lived assets | | | 737 | | | | 129 | | | | 787 | | | | 180 | |
Lease termination charges | | | — | | | | — | | | | (3 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Operating (loss) income | | | (2,619 | ) | | | (774 | ) | | | (4,818 | ) | | | 1,103 | |
| | | | |
Interest income | | | 139 | | | | 34 | | | | 276 | | | | 48 | |
Interest expense | | | (741 | ) | | | (727 | ) | | | (1,302 | ) | | | (1,475 | ) |
| | | | | | | | | | | | | | | | |
Loss before income taxes | | | (3,221 | ) | | | (1,467 | ) | | | (5,844 | ) | | | (324 | ) |
Income taxes | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Net loss from continuing operations | | | (3,221 | ) | | | (1,467 | ) | | | (5,844 | ) | | | (324 | ) |
Net (loss) income from discontinued operations | | | (32 | ) | | | 749 | | | | (204 | ) | | | 876 | |
| | | | | | | | | | | | | | | | |
Net (loss) income | | $ | (3,253 | ) | | $ | (718 | ) | | $ | (6,048 | ) | | $ | 552 | |
Net loss from continuing operations per share—basic and diluted | | $ | (0.16 | ) | | $ | (0.07 | ) | | $ | (0.29 | ) | | $ | (0.01 | ) |
Net income (loss) from discontinued operations per share—basic and diluted | | $ | — | | | $ | 0.04 | | | $ | (0.01 | ) | | $ | 0.04 | |
| | | | | | | | | | | | | | | | |
Net (loss) income per share—basic and diluted | | $ | (0.16 | ) | | $ | (0.03 | ) | | $ | (0.30 | ) | | $ | 0.03 | |
| | | | | | | | | | | | | | | | |
Weighted average common shares outstanding—basic and diluted | | | 20,431,544 | | | | 20,525,656 | | | | 20,420,771 | | | | 20,507,129 | |
| | | | | | | | | | | | | | | | |
BUCA, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
($ in thousands)
(Unaudited)
| | | | | | | | |
| | | July 1, 2007 | | | December 31,
2006 | |
| ASSETS | | | | | | | | |
CURRENT ASSETS: | | | | | | | | |
Cash | | $ | 702 | | | $ | 1,567 | |
Accounts receivable | | | 3,460 | | | | 4,864 | |
Inventories | | | 5,883 | | | | 6,279 | |
Prepaid expenses and other | | | 5,297 | | | | 4,468 | |
| | | | | | | | |
Total current assets | | | 5,342 | | | | 17,178 | |
| | |
PROPERTY AND EQUIPMENT, net | | | 106,184 | | | | 112,189 | |
NOTE RECEIVABLE | | | 3,597 | | | | 3,567 | |
OTHER ASSETS | | | 4,313 | | | | 4,469 | |
| | | | | | | | |
| | $ | 129,436 | | | $ | 137,403 | |
| | | | | | | | |
| | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | |
Accounts payable | | $ | 9,203 | | | $ | 10,755 | |
Unredeemed gift card liabilities | | | 1,711 | | | | 4,031 | |
Accrued payroll and benefits | | | 7,209 | | | | 8,806 | |
Accrued sales, property and income tax | | | 3,187 | | | | 3,678 | |
Other accrued expenses | | | 3,187 | | | | 3,495 | |
Line of credit borrowing | | | 5,336 | | | | — | |
Current maturities of long-term debt and capital leases | | | 264 | | | | 193 | |
Current liabilities of discontinued operations and assets held for sale | | | 29 | | | | 257 | |
| | | | | | | | |
Total current liabilities | | | 30,126 | | | | 31,215 | |
| | | | | | | | |
LONG-TERM DEBT AND CAPITAL LEASES, less current maturities | | | 16,143 | | | | 16,278 | |
DEFERRED RENT | | | 18,075 | | | | 18,853 | |
OTHER LIABILITIES | | | 3,310 | | | | 4,037 | |
| | | | | | | | |
Total liabilities | | | 67,654 | | | | 70,383 | |
| | | | | | | | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | |
SHAREHOLDERS’ EQUITY: | | | | | | | | |
Undesignated stock, 5,000,000 shares authorized, none issued or outstanding | | | — | | | | — | |
Common stock, $.01 par value per share, 30,000,000 shares authorized; 21,058,723 and 20,926,556 shares issued and outstanding, respectively | | | 211 | | | | 209 | |
Additional paid-in capital | | | 172,161 | | | | 171,430 | |
Accumulated deficit | | | (109,551 | ) | | | (103,503 | ) |
Notes receivable from employee shareholders | | | (1,039 | ) | | | (1,116 | ) |
| | | | | | | | |
Total shareholders’ equity | | | 61,782 | | | | 67,020 | |
| | | | | | | | |
| | $ | 129,436 | | | $ | 137,403 | |
| | | | | | | | |
