EXHIBIT 99.1
[O'CHARLEY'S INC. LOGO]
NEWS RELEASE
CONTACT: A. Chad Fitzhugh
Chief Financial Officer
(615) 782-8818
O'CHARLEY'S INC. REPORTS FIRST QUARTER RESULTS
FIRST QUARTER HIGHLIGHTS
- - EARNINGS PER SHARE EXCEED PREVIOUS GUIDANCE
- - SAME STORE SALES UP 4.0% AT O'CHARLEY'S, 1.7% AT NINETY NINE AND 10.1% AT
STONEY RIVER
NASHVILLE, Tenn. (May 11, 2004) -- O'Charley's Inc. (NASDAQ/NM: CHUX), a leading
casual dining restaurant company, today reported revenues and earnings per share
for the 16-week period ended April 18, 2004.
O'Charley's Inc. Financial and Operational Highlights
For the 16-week period ended April 18, 2004, earnings per diluted share
were $0.34 compared with $0.41 per share in the 16-week period ended April 20,
2003. Revenues in the first quarter increased 24.5% to $267.7 million from
$215.1 million in the prior-year period. Net earnings for the first quarter were
$7.7 million compared with $8.9 million in the prior-year period.
Gregory L. Burns, chairman and chief executive officer of O'Charley's
Inc. stated, "We are excited about our start to 2004 as all three concepts
reported strong same store sales increases driven primarily by improvements in
customer visits. The early results of our phase three initiative at our
O'Charley's concept, coupled with solid sales performance by Ninety Nine and
continued growth in sales at Stoney River contributed to the
better-than-anticipated earnings results for the first quarter. During the first
quarter, we estimate that higher-than-anticipated commodity costs adversely
affected our earnings by approximately $0.02 per diluted share. While the
Company is showing marked signs of improvement and the outlook for continued
sales and earnings growth is more optimistic, we remain somewhat cautious due to
the overall commodity cost environment."
O'Charley's Restaurants
Restaurant sales for O'Charley's increased 15.8% to $183.2 million for
the first quarter. Same store sales for the first quarter were up 4.0% when
compared with the prior-year period. Six new O'Charley's restaurants opened
during the first quarter and one has opened to date in the second quarter,
bringing the total number of O'Charley's restaurants to 213. The Company expects
to open a total of approximately 15 new O'Charley's restaurants in 2004, with
all restaurants expected to open in existing markets.
Commenting on the results for O'Charley's, Mr. Burns stated, "Although
we are still early in the implementation of phase three at O'Charley's, we are
pleased with the 6.4% increase in customer visits during the quarter and the
favorable response to the promotions we introduced this quarter. As we continue
to grow the O'Charley's customer base through the addition of new customers and
the retention of core customers, we expect to build on the first quarter results
and further expand our operating margins."
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3038 Sidco Drive - Nashville, TN 37204 - (615) 256-8500
CHUX Reports First Quarter Results
Page 2
May 11, 2004
Ninety Nine Restaurant & Pub Restaurants
Restaurant sales for Ninety Nine were $74.5 million for the first
quarter. Same store sales for the first quarter were up 1.7% compared with the
prior-year period. Two new Ninety Nine restaurants opened in the first quarter
and two opened to date in the second quarter of 2004, bringing the total to 91
Ninety Nine restaurants. The Company expects to open a total of approximately 12
new Ninety Nine restaurants in 2004, with all openings in existing markets.
Mr. Burns stated, "Ninety Nine continues to perform well, operating and
opening stores with a level of intensity and passion that produces accretive
financial results for the Company. Ninety Nine enjoys a loyal customer base and,
given the continued success of new store openings and new store performance, has
been able to broaden that base in both new and existing markets."
Stoney River Legendary Steaks Restaurants
First quarter sales for Stoney River Legendary Steaks increased 10.4%
to $7.2 million. Same store sales increased 10.1% for the first quarter compared
with the prior-year period. The Company does not intend to open any Stoney River
restaurants in 2004. Mr. Burns added, "The operational excellence and greater
brand awareness at Stoney River have yielded improved results as evidenced by
the strong same store sales increases during the past three quarters. The
nurturing and refining of this concept over the last two years has begun to pay
off for us, and we look forward to expanding the Stoney River concept in 2005."
Outlook for Second Fiscal Quarter of 2004
The Company stated that it expects to report net earnings of $0.22 to
$0.25 per diluted share for the second quarter ending July 11, 2004. These
projected results for the second fiscal quarter are based upon anticipated
increases in same store sales of 2% to 4% and three additional restaurants for
the O'Charley's concept and same store sales increases of 1% to 3% for the
Ninety Nine concept in the second quarter. During the first quarter, commodity
costs were approximately 4% higher than the prior-year period. The Company
expects the higher commodity costs trend to continue at least through the second
quarter and has included estimates for these higher costs in the second quarter
guidance.
Investor Conference Call and Web Simulcast
O'Charley's Inc. will conduct a conference call on its first quarter
earnings release on May 12, 2004, at 11:00 a.m. EDT. The number to call for this
interactive teleconference is (913) 981-5508. A replay of the conference call
will be available until May 19, 2004, by dialing (719) 457-0820 and entering the
passcode, 149871.
The Company will also provide an on-line Web simulcast and rebroadcast
of the conference call. The live broadcast of the Company's quarterly conference
call will be available on-line at the Company's Website at www.ocharleys.com, as
well as www.streetevents.com and www.fulldisclosure.com on May 12, 2004,
beginning at 11:00 a.m. EDT. The on-line replay will follow shortly after the
call and continue until May 26, 2004.
O'Charley's Inc. operates 213 O'Charley's restaurants in 16 states in
the Southeast and Midwest. The menu, with an emphasis on fresh preparation,
features several specialty items such as hand-cut and aged steaks, a variety of
seafood and chicken, freshly-baked yeast rolls, fresh-cut salads with
special-recipe salad dressings and signature caramel pie. The Company also
operates Ninety Nine Restaurant &
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CHUX Reports First Quarter Results
Page 3
May 11, 2004
Pub in 91 locations throughout Connecticut, Maine, Massachusetts, New Hampshire,
New York, Rhode Island and Vermont. Ninety Nine has earned a strong reputation
for providing generous portions of high-quality food at moderate prices in a
comfortable, relaxed atmosphere. The menu features a wide selection of
appetizers, salads, sandwiches, burgers, entrees and desserts. In addition, the
Company operates six Stoney River Legendary Steaks restaurants in Georgia,
Illinois, Kentucky and Tennessee. The dinner-only steakhouse concept appeals to
both upscale casual dining and fine dining customers by offering high-quality
food and attentive customer service typical of high-end steakhouses at more
moderate prices.
This press release and statements made by or on behalf of the Company
relating hereto may be deemed to constitute forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements, including the Company's
projected results of operations for the second fiscal quarter of 2004,may be
affected by certain risks and uncertainties, including, but not limited to, the
Company's ability to successfully implement sales building initiatives at the
O'Charley's concept, increase operating margins and reverse decreases in same
restaurant sales; the adverse impact of the Hepatitis A occurrence and the
related litigation on the Company's results of operations; the possible adverse
effect on our sales of any decrease in consumer spending; the effect of
increased competition; the effect that any increases in food, labor and other
expenses, including those associated with the sales building initiatives, may
have on our results of operations; and the other risks described in the
Company's filings with the Securities and Exchange Commission. In light of the
significant uncertainties inherent in the forward-looking statements included
herein, you should not regard the inclusion of such information as a
representation by us that our objectives, plans and projected results of
operations will be achieved and the Company's actual results could differ
materially from such forward-looking statements. The Company does not undertake
any obligation to publicly release any revisions to the forward-looking
statements contained herein to reflect events and circumstances occurring after
the date hereof or to reflect the occurrence of unanticipated events.
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CHUX Reports First Quarter Results
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May 11, 2004
O'CHARLEY'S INC.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
SIXTEEN WEEKS ENDED APRIL 18, 2004 AND APRIL 20, 2003
2004 2003
------------------------- --------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Revenues:
Restaurant sales $ 265,005 99.0% $ 213,282 99.2%
Commissary sales 2,738 1.0% 1,802 0.8%
--------- ------- --------- -------
267,743 100.0% 215,084 100.0%
Costs and Expenses:
Cost of restaurant sales: (1)
Cost of food and beverage 79,595 30.0% 59,307 27.8%
Payroll and benefits 90,588 34.2% 69,375 32.5%
Restaurant operating costs 47,199 17.8% 38,911 18.2%
Cost of commissary sales 2,581 1.0% 1,692 0.8%
Advertising, general and administrative expenses 18,952 7.1% 16,122 7.5%
Depreciation and amortization 11,575 4.3% 9,959 4.6%
Preopening costs 1,642 0.6% 2,381 1.1%
--------- ---------
252,132 94.2% 197,747 91.9%
--------- ------- --------- -------
Income from Operations 15,611 5.8% 17,337 8.1%
Other (Income) Expense:
Interest expense, net 3,964 1.5% 3,747 1.7%
Other, net 31 0.0% (43) 0.0%
--------- ------- --------- -------
3,995 1.5% 3,704 1.7%
--------- ------- --------- -------
Earnings Before Income Taxes 11,616 4.3% 13,633 6.3%
Income Taxes 3,906 1.5% 4,737 2.2%
--------- ------- --------- -------
Net Earnings $ 7,710 2.9% $ 8,896 4.1%
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Basic Earnings per Share:
Net Earnings $ 0.35 $ 0.43
========= =========
Weighted Average Shares Outstanding 22,328 20,795
========= =========
Diluted Earnings per Share:
Net Earnings $ 0.34 $ 0.41
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Weighted Average Shares Outstanding 22,737 21,818
========= =========
(1) These items are shown as a percentage of restaurant sales.
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CHUX Reports First Quarter Results
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May 11, 2004
O'CHARLEY'S INC.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AT APRIL 18, 2004 AND DECEMBER 28, 2003
2004 2003
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(IN THOUSANDS)
Cash $ 3,665 $ 9,574
Other current assets 54,552 39,930
Property and equipment, net 427,805 429,361
Goodwill and other intangible assets 118,995 118,990
Other assets 22,349 22,380
-------- --------
Total assets $627,366 $620,235
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Current portion of long-term debt and capital leases $ 10,669 $ 10,031
Other current liabilities 75,391 70,779
Deferred income taxes 8,993 6,940
Long-term debt, net of current portion 149,139 165,145
Capitalized lease obligations, net of current portion 35,512 34,453
Other liabilities 35,121 29,752
Shareholders' equity 312,541 303,135
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Total liabilities and shareholders' equity $627,366 $620,235
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