NEWS BULLETIN
FROM
The Financial Relations Board
-------------------------------
BSMG WORLDWIDE
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[LOGO OF SIZZLER]
RE: SIZZLER INTERNATIONAL, INC.
6101 W. Centinela Ave. Suite 200
Culver City, CA 90230
(310)568-1035
NYSE: SZ
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AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
Charles Boppell Kim Forster Haris Tajyar Moira Conlon
President and CEO Vice President, Planning General Information Investor Contact
(310) 568-0135 (310) 568-0135 (310) 442-0599 (310) 442-0599
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FOR IMMEDIATE RELEASE
November 16, 2000
SIZZLER INTERNATIONAL REPORTS Second
QUARTER EARNINGS AND SAME-STORE SALES
----------------------
HIGHLIGHTS:
. Acquisition of 82% of Oscar's Restaurants completed and integration
proceeding as planned
. Same-store-sales growth of 0.7% for Sizzler USA, 4.0% for KFC and 4.9% for
Oscar's
. Remodeling and re-imaging program on track
. Earnings impacted by E. coli incident at Milwaukee franchise stores and
Australian exchange rate
CULVER CITY, CA--November 16, 2000--Sizzler International, Inc. (NYSE: SZ) today
reported financial results for the second quarter of fiscal 2001 ended October
15, 2000.
For the second quarter of fiscal 2001, the Company reported revenues of $54.6
million, a decrease of 1.1% from the $55.3 million in revenues reported in the
same period last year. The decline in second quarter revenues is primarily
attributable to the impact of an E. coli episode at two franchise locations in
Milwaukee, which adversely affected domestic Sizzler(R) restaurants nationwide,
and the 13.1% decline in the Australian dollar exchange rate. Excluding the
effect of the weakening in the Australian dollar exchange rate, revenues would
have been $58.9 million, an increase of 6.5%. For the second quarter of fiscal
2001, Sizzler reported net income of $310,000, or $0.01 per diluted share, an
85.0% decrease from net income of $2.1 million, or $0.07 per diluted share, in
the second quarter of fiscal 2000.
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Page 2 of 7
For the six months ended October 15, 2000, the company reported revenues of
$109.3 million, a decrease of 2.6% from revenues of $112.3 million in the same
period last year. Sizzler reported net income of $3.2 million, or $0.11 per
diluted share, a decline of 30.5% from net income of $4.6 million, or $0.16 per
diluted share, reported in the year-ago period. "As we expected, the weakening
of the Australian dollar and the loss of sales momentum from the E. coli
incident at two franchise locations had a significant impact on our earnings
this quarter. However, we remain committed to our long term strategies of
expanding our international operations, strengthening the Sizzler(R) brand and
growing Oscar's," said Charles Boppell, President and CEO of Sizzler
International.
Oscar's Transaction Completed
During the second quarter, the Company completed the acquisition of 82% of
Oscar's, a key element of Sizzler's long term growth strategy. "We are very
pleased to have Oscar's as part of the Sizzler family and look forward to the
concept's expansion and growth. Oscar's performance this quarter was strong and
in-line with our expectations. As we stated when we first announced the
transaction, we anticipated that the initial impact would be $0.04 to $0.05
dilutive in its first year and accretive in its second year. Our results for the
quarter include the results we anticipated," said Mr. Boppell. Same store sales
growth for Oscar's was 4.9% for the quarter. Total sales growth for the quarter
was 17.8%, helped in part by the opening of the ninth Oscar's location.
Positive Trends in Same Store Sales Growth
For the second quarter of fiscal 2001, the Company's Australian operations
performed strongly even with the introduction of a 10% goods and services tax
(GST) at the start of the quarter and the Sydney Olympics, which tended to
dampen leisure dining. The Company's KFC(R) units reported a 4.0% increase in
same store sales. The higher check average Sizzler(R) locations were affected
more by the GST and reported a decline in same store sales of 4.1% for the
quarter.
Same store sales increased 0.7% across company owned U.S. Sizzler(R) locations
despite the problems in Milwaukee. "Even with this setback and loss of our sales
momentum, our domestic Sizzler(R) restaurants continued to experience sales
growth. We believe that this is a temporary setback and that the significant
effects are behind us," said Thomas E. Metzger, FMP, President and CEO of
Sizzler USA.
"Our store remodeling and re-imaging program has yielded favorable responses
from our customers. At the end of the second quarter, 47 units had been
completely repositioned. An additional 9 units are currently in various stages
of the re-image process. We believe our efforts will result in solid increases
in sales and customer counts in the quarters ahead," concluded Mr. Metzger. For
the second quarter, same store sales growth at re-imaged stores was over 4%,
despite the E. coli incident which took place at the start of the quarter as
many stores were being or had just recently been re-launched. The company is on
track to complete all scheduled remodels by the end of the year as planned.
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Share Repurchase Program
Sizzler repurchased 282,700 shares during the quarter, bringing the total number
of shares repurchased to approximately 1.1 million of the 1.5 million shares of
common stock that has been authorized by its Board of Directors. Subject to
applicable laws and other factors, the company expects to complete its stock
repurchase program as soon as practicable.
Investor Conference Call
Sizzler will be holding an investor conference call to discuss the Company's
financial and operational results Thursday, November 16, 2000 at 11:00 am EST.
The public will have the opportunity to listen to the live conference call over
the Internet through StreetEvents at www.streetevents.com. For those who cannot
listen to the live broadcast, a replay will be available shortly after the call.
About Sizzler
Sizzler International, Inc. operates, franchises or joint ventures 345
Sizzler(R) restaurants worldwide, in addition to 104 KFC(R) restaurants
primarily located in Queensland, Australia and 9 Oscar's in the southwest United
States.
To the extent that certain statements contained in this document may be deemed
under federal securities laws to be forward-looking statements, Sizzler intends
that they be subject to the safe-harbor applicable to forward-looking statements
under such laws. Such statements may include, but are not limited to, statements
regarding (i) the continued positive impact of the remodel program on sales and
customer counts; (ii) the completion of the remodeling of domestic company owned
stores as scheduled; (iii) the impact of the Oscar's transaction on Sizzler's
earnings; (iv) the duration and magnitude of the effect of E. coli on Sizzler's
sales; and (v) the continuation of the company's stock repurchase program.
Sizzler cautions that these statements are qualified by important factors that
could cause actual results to differ from those reflected by the forward-looking
statements contained herein. Such factors include, but are not limited to, (a)
the continuing favorable response to Sizzler's newly remodeled stores and/or new
food offerings; (b) Sizzler's ability to complete the remodel program as
scheduled; (c) the opening of new Oscar's restaurants as planned and the
continued growth in sales at existing Oscar's restaurants; (d) Sizzler's ability
to regain growth in sales lost due to the E. coli incident; (e) the ability of
the Australian Sizzler(R) and KFC(R) restaurants to overcome any adverse impact
from GST; (f) general economic, regulatory, and other factors pertaining to
share repurchases; and (g) other risks as detailed from time to time in
Sizzler's SEC reports, including Quarterly Reports on Form 10Q, Current Reports
on Form 8-K, and Annual Reports on Form 10-K.
For more information on Sizzler International, Inc. via facsimile at no cost,
simply call 1-800-PRO-INFO and dial client code "SZ."
[ tables to follow ]
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Page 4 of 7
SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE TWELVE WEEKS ENDED OCTOBER 15, 2000 AND OCTOBER 17, 1999
(in thousands, except for per share data)
TWELVE WEEKS ENDED
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OCTOBER 15, 2000 OCTOBER 17, 1999
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(Unaudited)
Revenues
Restaurants $ 52,454 $ 53,209
Franchise operations 2,183 2,054
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Total revenues 54,637 55,263
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Costs and Expenses
Cost of sales 18,733 19,503
Labor and related expenses 15,029 14,532
Other operating expenses 12,761 11,721
Depreciation and amortization 2,109 2,154
General and administrative expenses 4,917 4,094
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Total operating costs 53,549 52,004
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Interest expense 933 816
Investment income (452) (198)
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Total costs and expenses 54,030 52,622
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Income before income taxes 607 2,641
Provision for income taxes 297 578
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Net income $ 310 $ 2,063
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Basic and diluted earnings per share $ 0.01 $ 0.07
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SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE TWENTY-FOUR WEEKS ENDED OCTOBER 15, 2000 AND OCTOBER 17, 1999
(in thousands, except for per share data)
TWENTY-FOUR WEEKS ENDED
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OCTOBER 15, 2000 OCTOBER 17, 1999
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(Unaudited)
Revenues
Restaurants $ 104,766 $ 108,050
Franchise operations 4,529 4,218
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Total revenues 109,295 112,268
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Costs and Expenses
Cost of sales 37,676 39,710
Labor and related expenses 29,263 29,377
Other operating expenses 24,692 23,272
Depreciation and amortization 3,914 4,232
General and administrative expenses 9,229 8,752
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Total operating costs 104,774 105,343
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Interest expense 1,680 1,688
Investment income (1,012) (380)
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Total costs and expenses 105,442 106,651
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Income before income taxes 3,853 5,617
Provision for income taxes 678 1,048
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Net income $ 3,175 $ 4,569
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Basic and diluted earnings per share $ 0.11 $ 0.16
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SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS OCTOBER 15, APRIL 30,
2000 2000
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(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $ 17,688 $ 38,789
Receivables, net of reserves of $786 at
October 15, 2000 and $847 at April 30, 2000 4,651 4,173
Inventories 4,042 4,333
Current tax asset 2,544 2,544
Prepaid expenses and other current assets 2,426 1,132
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Total current assets 31,351 50,971
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Property and equipment, net 60,353 46,316
Property held for sale, net 5,931 8,931
Long-term notes receivable, net of reserves of $133
at October 15, 2000 and April 30, 2000 824 1,224
Deferred income taxes 3,425 3,405
Intangible assets, net of accumulated amortization of
$997 at October 15, 2000 and $889 at April 30, 2000 19,610 1,876
Other assets 4,532 3,157
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Total assets $ 126,026 $ 115,880
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SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share data)
LIABILITIES AND STOCKHOLDERS' INVESTMENT OCTOBER 15, APRIL 30,
2000 2000
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(Unaudited) (Audited)
Current liabilities:
Current portion of long-term debt $ 5,595 $ 5,206
Accounts payable 9,818 8,196
Other current liabilities 12,482 10,209
Income taxes payable 966 2,530
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Total current liabilities 28,861 26,141
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Long-term debt, net of current portion 24,282 21,198
Deferred gain on sale and lease back 8,664 8,269
Pension liability 9,489 9,637
Stockholders' investment
Capital stock-
Preferred, authorized 1,000,000 shares, $5 par - -
value; no shares issued
Common, authorized 50,000,000 shares, $0.01 par
value; outstanding 27,637,186 shares at October
15, 2000 and 28,067,539 shares at April 30, 2000 288 288
Additional paid-in capital 279,356 278,408
Accumulated deficit (216,594) (219,769)
Treasury stock, 1,129,400 shares at cost at October 15, (2,894) (1,948)
2000 and 706,700 shares at April 30, 2000
Accumulated other comprehensive income (5,426) (6,344)
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Total stockholders' investment 54,730 50,635
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Total liabilities and stockholders' investment $ 126,026 $ 115,880
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