EXHIBIT 99.1
(O'CHARLEY'S INC. LOGO)
NEWS RELEASE
CONTACT: Lawrence E. Hyatt
Chief Financial Officer
(615) 782-8818
O'CHARLEY'S INC. CONDUCTING REVIEW OF LEASE ACCOUNTING
NASHVILLE, Tenn. (March 4, 2005) -- O'Charley's Inc. (NASDAQ/NM: CHUX), a
leading casual dining restaurant company, today announced that it is reviewing
its accounting practices with respect to leasing transactions as a result of a
recent clarification of United States generally accepted accounting principles
(GAAP) by the Securities and Exchange Commission (SEC).
On February 7, 2005, the Office of the Chief Accountant of the SEC issued a
letter to the American Institute of Certified Public Accountants expressing its
views regarding certain operating lease accounting issues and their application
under GAAP. In the ensuing weeks many restaurant companies and retailers have
reviewed their previous interpretations of the lease accounting issues and have
subsequently announced that they will be restating their results for prior
periods.
In light of this letter, the Company initiated a review of its lease-related
accounting methods. Based on this review, as well as discussions with the
Company's independent auditors and its Audit Committee, the Company determined
that its accounting for leases was not in conformity with GAAP as described in
the SEC's letter. Accordingly, on March 3, 2005, management and the Audit
Committee determined that the Company would be required to restate its
previously issued consolidated financial statements, including those contained
in the Company's Annual Report on Form 10-K for the fiscal years ended December
29, 2002, and December 28, 2003, and those in the Company's Quarterly Reports on
Form 10-Q for the fiscal quarters ended April 18, 2004, July 11, 2004, and
October 3, 2004. Further, management and the Audit Committee have determined
that the Company's unaudited consolidated financial results included in the
Company's press release issued on February 3, 2005, should likewise no longer be
relied upon.
The Company is working diligently to complete its review of these matters and to
quantify the impact of the necessary adjustments on each of the affected prior
periods. Adjustments will have no affect on historical or future cash flows or
the timing of payments under the related leases, nor will they affect the
Company's compliance with covenants under its credit facility. The Company does
not anticipate that the review will have an impact on its previously issued
guidance for the first fiscal quarter of 2005.
Due to the time and effort involved in determining the effect of these
adjustments on the Company's historical financial statements, the Company
intends to file a Form 12b-25 and to delay the filing of its Annual Report on
Form 10-K for the fiscal year ended December 26, 2004, which the Company now
expects to file on or before March 28, 2005. The Company's Annual Report on Form
10-K for the fiscal year ended December 26, 2004, will include disclosure of the
effects of the adjustments on the financial statements of each of the periods
included in the audited financial statements. The Company also intends to file
amended quarterly reports for the fiscal quarters ended April 18, 2004, July 11,
2004, and October 3, 2004.
-MORE-
3038 Sidco Drive - Nashville, TN 37204 - (615) 256-8500
CHUX Reviewing Lease Accounting
Page 2
March 4, 2005
ABOUT O'CHARLEY'S INC.
O'Charley's Inc. operates 223 company-owned O'Charley's restaurants in 16 states
in the Southeast and Midwest, with two franchised O'Charley's restaurants in
Michigan. An O'Charley's restaurant in Louisiana is operated by a joint venture
in which the Company has an ownership interest. 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 restaurants in 100 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.
FORWARD-LOOKING STATEMENT
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 are subject to completion of the
Company's review of its accounting practices with respect to leasing
transactions, restatement of its prior period financial statements, and the
finalization of management's assessment of the effectiveness of the Company's
internal controls over financial reporting as required by Section 404 of the
Sarbanes-Oxley Act, and may be affected by certain other risks and
uncertainties. In light of the significant uncertainties inherent in the
forward-looking statements included here, 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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