Exhibit 99.1
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 | | FOR IMMEDIATE RELEASE |
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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 3rd Quarter 2007 Results
Comparable Restaurant Sales Increase 1.8% for Quarter
Minneapolis, Minnesota, November 6, 2007. BUCA, Inc. (NASDAQ: BUCA) today announced financial results for the third quarter of fiscal 2007, ended September 30, 2007.
Third Quarter Results
Total restaurant sales were $56.5 million in the third quarter of fiscal 2007 as compared to $56.4 million in the third quarter of fiscal 2006. The increase was primarily driven by increased lunch sales, as well as increased to-go sales and price increases taken during the first three quarters of fiscal 2007 partially offset by a decrease in bar sales. No new restaurants opened in the period.
Buca di Beppo comparable restaurant sales increased 1.8% for the third quarter of fiscal 2007 as compared to the same period last year. The increase reflects the twelfth consecutive quarter of positive comparable restaurant sales for the Buca di Beppo restaurants. The difference between the comparable restaurant sales increase and the total revenue increase was primarily due to the closure of two underperforming restaurants in the first half of 2007.
The company reported a net loss from continuing operations of $4.8 million, or ($0.24) per share, in the third quarter of fiscal 2007, including a loss on disposal of assets of $0.5 million, or ($0.02) per share, related to repairs and renovation of our San Francisco restaurant. This compares to a net loss from continuing operations of $5.0 million or ($0.24) per share, in the third quarter of fiscal 2006, which included a $0.04 per share credit for an insurance-related settlement.
Total restaurant costs in the third quarter of fiscal 2007 were $55.4 million, as compared to $55.5 million in the same period of the prior year. As a percentage of restaurant sales, these costs were 98.1% for the third quarter of fiscal 2007, as compared to 98.4% in the third quarter of fiscal 2006. The decrease in restaurant costs as a percentage of sales was largely attributable to lower product, labor and direct and occupancy costs.
General and administrative expenses were $5.4 million in the third quarter of fiscal 2007, as compared to $5.1 million in the same period in the prior year, which benefited from a $0.9 million insurance-related settlement received by the company in that quarter. As a result, general and administrative expenses as a percentage of restaurant sales increased to 9.5% in the third quarter of fiscal 2007 from 9.0% in the comparable period of fiscal 2006.
Wallace B. Doolin, the company’s Chairman and Chief Executive Officer commented, “The restaurant environment has been challenging this year. I’m pleased, however, with our comparable restaurant sales performance, our improvements in labor expense and our continued product cost controls. We did have additional expense related to closing and renovating one of our highest volume restaurants as well in this quarter. We believe our performance over this period demonstrates the strength of the Buca di Beppo brand and the execution of our multi-year strategy focusing on increasing average unit volumes, closing underperforming restaurants and managing margins for increased leverage on sales. I believe that our twelve consecutive quarters of positive comparable restaurant sales growth are evidence that our strategies are working, in spite of the difficult environment for sales and margins.” Mr. Doolin, added, “As we transition through the fourth quarter and look to 2008, we believe that we can continue to capitalize on our market positioning and drive shareholder value over the long term as we continue to drive improvements on the sales and cost side while resuming growth next year by opening new Buca di Beppo restaurants.”
Nine Month Results
Through September 30, 2007, total restaurant sales were $181.4 million compared to $182.3 million in the same period in the prior year. The decrease in revenue was primarily due to a shift in the company’s fiscal calendar caused by the 53rd week of fiscal 2006 which removed the relatively high sales week prior to and including New Year’s Eve from the company’s first quarter of fiscal 2007. The company’s fiscal 2007 results also reflect the negative impact of adverse weather conditions in the fiscal first quarter and the closure of two underperforming restaurants in the first half of 2007.
Comparable restaurant sales for the company’s Buca di Beppo restaurants increased 1.9% for the first three quarters of fiscal 2007 as compared to the same period in the prior year.
The comparable restaurant sales numbers reported above for both the third quarter and year to date exclude the results of the company’s San Francisco restaurant for the entire third fiscal quarter for each of 2006 and 2007. The restaurant, one of the company’s highest sales locations, was closed for renovation beginning September 24, 2007 and is expected to reopen in the later half of November 2007. If the third quarter results for the San Francisco restaurant (including the periods in which it was closed) had been included in the calculations, the company would have reported comparable restaurant sales increases of 1.2% for the third quarter and 1.7% for the first three quarters of fiscal 2007. The reported revenue numbers include all of the company’s revenues for all periods, including those of the San Francisco restaurant.
The company reported net loss from continuing operations of $10.7 million for the first three quarters of fiscal 2007, or ($0.52) per share, compared to a net loss from continuing operations of $5.3 million, or ($0.26) per share, in the same period of the prior year.
For the first three quarters of fiscal 2007, total restaurant costs were $173.3 million, or 95.5% of restaurant sales, up from 93.4% 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 $16.5 million in the first three quarters of fiscal 2007, as compared to $14.9 million in the same period of fiscal 2006. The fiscal 2006 general and administrative expenses in dollars and as a percentage of sales reflect $2.7 million in insurance-related settlements reported during the period, which reduced general and administrative expenses for fiscal 2006.
During the first three quarters of fiscal 2007 the company closed two restaurants, recorded impairment expenses of $0.8 million primarily related to the sale of one restaurant property owned by the company and incurred a loss on disposal of assets of $0.5 million related to repairs and renovation of our San Francisco restaurant.
Conference Call
BUCA, Inc. will host a conference call on Tuesday, November 6, 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 1-888-256-1014 or 1-913-312-0982 for international callers. The passcode is 8540420. The call will be webcast and can be accessed but cutting and pasting the following link:http://viavid.net/dce.aspx?sid=000045C7 into your browser. If you are unable to join the call, a replay will be available beginning at 7:30 p.m. Eastern Time on November 6, 2007 and can be accessed by dialing 1-888-203-1112 or 1-719-457-0820 (international), passcode 8540420.
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 | | | Thirty-Nine Weeks Ended | |
| | | September 30,
2007 | | | September 24,
2006 | | | September 30,
2007 | | | September 24,
2006 | |
Restaurant sales | | $ | 56,540 | | | $ | 56,421 | | | $ | 181,435 | | | $ | 182,282 | |
Restaurant costs: | | | | | | | | | | | | | | | | |
Product | | | 14,225 | | | | 14,360 | | | | 44,889 | | | | 45,449 | |
Labor | | | 19,390 | | | | 19,476 | | | | 62,764 | | | | 60,387 | |
Direct and occupancy | | | 18,320 | | | | 18,446 | | | | 55,871 | | | | 54,726 | |
Depreciation and amortization | | | 2,805 | | | | 3,037 | | | | 8,686 | | | | 9,232 | |
Loss on disposal of assets | | | 700 | | | | 174 | | | | 1,056 | | | | 488 | |
| | | | | | | | | | | | | | | | |
Total restaurant costs | | | 55,440 | | | | 55,493 | | | | 173,266 | | | | 170,282 | |
| | | | |
General and administrative expenses | | | 5,399 | | | | 5,094 | | | | 16,502 | | | | 14,883 | |
Loss on impairment of long-lived assets | | | 13 | | | | 52 | | | | 800 | | | | 232 | |
Lease termination charges | | | — | | | | — | | | | (3 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Operating loss | | | (4,312 | ) | | | (4,218 | ) | | | (9,130 | ) | | | (3,115 | ) |
| | | | |
Interest income | | | 120 | | | | 19 | | | | 396 | | | | 67 | |
Interest expense | | | (635 | ) | | | (751 | ) | | | (1,937 | ) | | | (2,226 | ) |
| | | | | | | | | | | | | | | | |
Loss before income taxes | | | (4,827 | ) | | | (4,950 | ) | | | (10,671 | ) | | | (5,274 | ) |
Income taxes | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Net loss from continuing operations | | | (4,827 | ) | | | (4,950 | ) | | | (10,671 | ) | | | (5,274 | ) |
Net (loss) income from discontinued operations | | | (3 | ) | | | (153 | ) | | | (207 | ) | | | 723 | |
| | | | | | | | | | | | | | | | |
Net loss | | $ | (4,830 | ) | | $ | (5,103 | ) | | $ | (10,878 | ) | | $ | (4,551 | ) |
Net loss from continuing operations per share—basic and diluted | | $ | (0.24 | ) | | $ | (0.24 | ) | | $ | (0.52 | ) | | $ | (0.26 | ) |
Net (loss) income from discontinued operations per share—basic and diluted | | $ | — | | | $ | (0.01 | ) | | $ | (0.01 | ) | | $ | 0.04 | |
| | | | | | | | | | | | | | | | |
Net loss per share—basic and diluted | | $ | (0.24 | ) | | $ | (0.25 | ) | | $ | (0.53 | ) | | $ | (0.22 | ) |
| | | | | | | | | | | | | | | | |
Weighted average common shares outstanding—basic and diluted | | | 20,467,149 | | | | 20,534,848 | | | | 20,435,964 | | | | 20,519,310 | |
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BUCA, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
($ in thousands)
(Unaudited)
| | | | | | | | |
| | | September 30,
2007 | | | December 31,
2006 | |
ASSETS | | | | | | | | |
CURRENT ASSETS: | | | | | | | | |
Cash | | $ | 750 | | | $ | 1,567 | |
Accounts receivable | | | 3,036 | | | | 4,864 | |
Inventories | | | 5,851 | | | | 6,279 | |
Prepaid expenses and other | | | 5,689 | | | | 4,468 | |
Current assets of discontinued operations and assets held for sale | | | 28 | | | | — | |
| | | | | | | | |
Total current assets | | | 15,354 | | | | 17,178 | |
| | |
PROPERTY AND EQUIPMENT, net | | | 102,568 | | | | 112,189 | |
NOTE RECEIVABLE | | | — | | | | 3,567 | |
OTHER ASSETS | | | 4,263 | | | | 4,469 | |
| | | | | | | | |
| | $ | 122,185 | | | $ | 137,403 | |
| | | | | | | | |
| | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | |
Accounts payable | | $ | 9,906 | | | $ | 10,755 | |
Unredeemed gift card liabilities | | | 1,561 | | | | 4,031 | |
Accrued payroll and benefits | | | 6,458 | | | | 8,806 | |
Accrued sales, property and income tax | | | 3,371 | | | | 3,678 | |
Other accrued expenses | | | 3,072 | | | | 3,495 | |
Line of credit borrowing | | | 2,707 | | | | — | |
Current maturities of long-term debt and capital leases | | | 267 | | | | 193 | |
Current liabilities of discontinued operations and assets held for sale | | | — | | | | 257 | |
| | | | | | | | |
Total current liabilities | | | 27,342 | | | | 31,215 | |
| | | | | | | | |
| | |
LONG-TERM DEBT AND CAPITAL LEASES, less current maturities | | | 16,080 | | | | 16,278 | |
DEFERRED RENT | | | 17,994 | | | | 18,853 | |
OTHER LIABILITIES | | | 3,342 | | | | 4,037 | |
| | | | | | | | |
Total liabilities | | | 64,758 | | | | 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; 21,077,052 and 20,926,556 shares issued and outstanding, respectively | | | 211 | | | | 209 | |
Additional paid-in capital | | | 172,563 | | | | 171,430 | |
Accumulated deficit | | | (114,381 | ) | | | (103,503 | ) |
Notes receivable from employee shareholders | | | (966 | ) | | | (1,116 | ) |
| | | | | | | | |
Total shareholders’ equity | | | 57,427 | | | | 67,020 | |
| | | | | | | | |
| | $ | 122,185 | | | $ | 137,403 | |
| | | | | | | | |
