EXHIBIT 99.1
[O'CHARLEY'S INC. LOGO]
CONTACT: A. Chad Fitzhugh
Chief Financial Officer
(615) 782-8818
O'CHARLEY'S INC. REPORTS SECOND QUARTER RESULTS
NASHVILLE, Tenn. (August 6, 2004) -- O'Charley's Inc. (NASDAQ/NM: CHUX), a
leading casual dining restaurant company, today reported revenues and earnings
per share for the 12-week and 28-week periods ended July 11, 2004.
O'Charley's Inc. Financial and Operational Highlights
For the 12-week period ended July 11, 2004, earnings per diluted share
were $0.23 compared with $0.27 per share in the 12-week period ended July 13,
2003, consistent with the Company's previous guidance. Revenues in the second
quarter increased 12.2% to $201.2 million from $179.2 million in the prior-year
period. Net earnings for the second quarter were $5.3 million compared with $6.1
million in the prior-year period.
Earnings per diluted share for the 28 weeks ended July 11, 2004, were
$0.57 compared with $0.68 per diluted share for the 28 weeks ended July 13,
2003. Revenues rose 18.9% to $468.9 million from $394.3 million in the
prior-year period, which reflects the revenue for Ninety Nine Restaurant & Pub
from January 27, 2003. Net earnings for the 28-week period were $13.0 million
compared with $15.0 million in the prior-year period.
Gregory L. Burns, chairman and chief executive officer of O'Charley's
Inc. stated, "We are generally pleased with the continued growth in same store
sales in all three of our concepts. Our initiatives to increase customer counts
at O'Charley's are working despite an overall slower quarter for the restaurant
industry. Continued increases in commodity costs, particularly poultry, pork and
dairy, more than offset the growth in sales for both the second quarter and the
first half of 2004. We estimate that commodity cost increases reduced our
earnings by approximately $0.08 per diluted share and $0.17 per diluted share in
the second quarter and first half, respectively. While the remainder of 2004
will continue to have challenges, we are optimistic about continued sales and
earnings growth and an improving economy."
O'Charley's Restaurants
Restaurant sales for O'Charley's increased 11.2% to $135.6 million for
the second quarter. Same store sales for the second quarter were up 2.8% when
compared with the prior-year period. Comparable restaurant sales for the first
28 weeks were up 3.5% when compared with last year. Four new O'Charley's
restaurants opened during the second quarter and one has opened to date in the
third quarter, bringing the total number of O'Charley's restaurants to 217. 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.
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3038 Sidco Drive * Nashville, TN 37204 * (615) 256-8500
CHUX Reports Second Quarter Results
Page 2
August 6, 2004
Commenting on the results for O'Charley's, Mr. Burns stated, "At
O'Charley's, the same store sales increase was driven by a 3.6% increase in
customer visits. While we believe we have room to increase prices, we elected
not to increase prices at this time. We continue to focus on store level
execution, building our customer base, and promotions with broad customer
appeal."
Ninety Nine Restaurant & Pub Restaurants
Restaurant sales for Ninety Nine increased 14.9% to $58.7 million for
the second quarter. Same store sales for the second quarter were up 1.9%
compared with the prior-year period and up 1.8% for the first 28 weeks of fiscal
2004. Two new Ninety Nine restaurants opened in the second quarter, bringing the
total to 91 Ninety Nine restaurants. The Company expects to open a total of
approximately 12 new Ninety Nine restaurants in 2004, opening primarily in
existing markets.
Mr. Burns stated, "Ninety Nine continues to produce consistent growth
in same store sales and profitability despite a decline of 1.7% in customer
counts for the second quarter. Rising commodity costs also had an adverse impact
on operating margins. We will continue to expand the concept in existing markets
where Ninety Nine enjoys a very loyal customer base."
Stoney River Legendary Steaks Restaurants
Second quarter sales for Stoney River Legendary Steaks increased 7.5%
to $5.4 million. Same store sales increased 6.1% for the second quarter compared
with the prior-year period and are up 8.1% for the year-to-date period. The
Company does not intend to open any Stoney River restaurants in 2004. Mr. Burns
added, "Stoney River continued to increase same store sales despite comparing to
a quarter last year with a number of successful marketing initiatives. We now
believe Stoney River has matured to the point where we intend to resume new
store openings in 2005."
Outlook for Third Fiscal Quarter of 2004
The Company stated that it expects to report net earnings of $0.20 to
$0.22 per diluted share for the third quarter ending October 3, 2004. These
projected results for the third fiscal quarter are based upon anticipated
increases in same store sales of 1% to 3% and two additional restaurants for the
O'Charley's concept and same store sales increases of 1% to 3% and four to five
new restaurants for the Ninety Nine concept in the third quarter. During the
second quarter, commodity costs were approximately 5% higher than the prior-year
period. The Company expects commodity costs to moderate in the third quarter but
to remain higher for most of the remainder of 2004 compared to 2003, offset, in
part, by continued improvement in sales from all three concepts.
Investor Conference Call and Web Simulcast
O'Charley's Inc. will conduct a conference call on its second quarter
earnings release on August 6, 2004, at 11:00 a.m. EDT. The number to call for
this interactive teleconference is (913) 981-4912. A replay of the conference
call will be available until August 13, 2004, by dialing (719) 457-0820 and
entering the passcode, 775422.
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, www.fulldisclosure.com and www.vcall.com on August
6, 2004, beginning at 11:00 a.m. EDT. The on-line replay will follow shortly
after the call and continue until August 20, 2004.
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CHUX Reports Second Quarter Results
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August 6, 2004
O'Charley's Inc. operates 217 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 & 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 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 sustain increases in same store sales; the effect
that increases in food, labor and other expenses, including those associated
with the sales building initiatives, have on our results of operations; 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; 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 Second Quarter Results
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August 6, 2004
O'CHARLEY'S INC.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
12 WEEKS ENDED JULY 11, 2004 AND JULY 13, 2003
2004 2003
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(IN THOUSANDS, EXCEPT PER SHARE DATA)
Revenues:
Restaurant sales $ 199,645 99.2% $ 178,011 99.3%
Commissary sales 1,510 0.8% 1,203 0.7%
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201,155 100.0% 179,214 100.0%
Costs and Expenses:
Cost of restaurant sales:
Cost of food and beverage 61,838 31.0% 51,533 28.9%
Payroll and benefits 66,551 33.3% 59,255 33.3%
Restaurant operating costs 36,119 18.1% 31,984 18.0%
Cost of commissary sales 1,430 0.7% 1,131 0.6%
Advertising, general and administrative expenses 14,265 7.1% 12,385 6.9%
Depreciation and amortization 9,131 4.5% 8,647 4.8%
Preopening costs 1,036 0.5% 1,575 0.9%
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190,370 94.6% 166,510 92.9%
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Income from Operations 10,785 5.4% 12,704 7.1%
Other (Income) Expense:
Interest expense, net 3,127 1.6% 3,414 1.9%
Other, net (23) 0.0% (80) 0.0%
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3,104 1.5% 3,334 1.9%
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Earnings Before Income Taxes 7,681 3.8% 9,370 5.2%
Income Taxes 2,423 1.2% 3,256 1.8%
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Net Earnings $ 5,258 2.6% $ 6,114 3.4%
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Basic Earnings per Share:
Earnings per Common Share $ 0.23 $ 0.28
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Weighted Average Common Shares Outstanding 22,430 21,803
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Diluted Earnings per Share:
Earnings per Common Share $ 0.23 $ 0.27
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Weighted Average Common Shares Outstanding 22,834 22,733
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CHUX Reports Second Quarter Results
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August 6, 2004
O'CHARLEY'S INC.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
28 WEEKS ENDED JULY 11, 2004 AND JULY 13, 2003
2004 2003
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(IN THOUSANDS, EXCEPT PER SHARE DATA)
Revenues:
Restaurant sales $ 464,650 99.1% $ 391,293 99.2%
Commissary sales 4,248 0.9% 3,005 0.8%
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468,898 100.0% 394,298 100.0%
Costs and Expenses:
Cost of restaurant sales:
Cost of food and beverage 141,433 30.4% 110,840 28.3%
Payroll and benefits 157,139 33.8% 128,630 32.9%
Restaurant operating costs 83,318 17.9% 70,895 18.1%
Cost of commissary sales 4,011 0.9% 2,823 0.7%
Advertising, general and administrative expenses 33,217 7.1% 28,507 7.2%
Depreciation and amortization 20,706 4.4% 18,606 4.7%
Preopening costs 2,678 0.6% 3,956 1.0%
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442,502 94.4% 364,257 92.4%
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Income from Operations 26,396 5.6% 30,041 7.6%
Other (Income) Expense:
Interest expense, net 7,091 1.5% 7,161 1.8%
Other, net 8 0.0% (123) 0.0%
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7,099 1.5% 7,038 1.8%
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Earnings Before Income Taxes 19,297 4.1% 23,003 5.8%
Income Taxes 6,329 1.3% 7,994 2.0%
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Net Earnings $ 12,968 2.8% $ 15,009 3.8%
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Basic Earnings per Share:
Net Earnings $ 0.58 $ 0.71
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Weighted Average Shares Outstanding 22,372 21,227
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Diluted Earnings per Share:
Net Earnings $ 0.57 $ 0.68
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Weighted Average Shares Outstanding 22,779 22,210
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CHUX Reports Second Quarter Results
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August 6, 2004
O'CHARLEY'S INC.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AT JULY 11, 2004 AND DECEMBER 28, 2003
2004 2003
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(IN THOUSANDS)
Cash $ 5,690 $ 9,574
Other current assets 53,514 39,930
Property and equipment, net 435,178 429,361
Goodwill and other intangible assets 118,995 118,990
Other assets 23,204 22,380
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Total assets $ 636,581 $ 620,235
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Current portion of long-term debt and capital leases $ 10,585 $ 10,031
Other current liabilities 80,121 69,767
Deferred income taxes 8,705 6,940
Long-term debt, net of current portion 148,134 165,145
Capitalized lease obligations, net of current portion 33,028 34,453
Other liabilities 36,573 30,764
Shareholders' equity 319,435 303,135
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Total liabilities and shareholders' equity $ 636,581 $ 620,235
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