Granite City Achieves Positive Cash Flow from Operations for First Quarter 2010
Company Outperforms Industry with Positive Comps for Sales and Guest Counts; Adjusted EBITDA at $1.5 million for the First Quarter 2010
Granite City Food & Brewery Ltd. (Nasdaq: GCFB), a Modern American upscale casual restaurant chain, today reported results for the first quarter ended March 30, 2010.
“We are extremely pleased with all phases of our plans to improve revenues”
Highlights for the first quarter 2010 were as follows:
- Total restaurant sales increased 3.8% to $22.2 million from $21.4 million a year-ago. Comparable restaurant sales for the first quarter increased 2.1% to $20.6 million from $20.2 million a year-ago
- Total guest counts increased 8.6% compared to a year-ago. Comparable guest traffic for the first quarter of 2010 increased 6.7% from a year-ago
- Prime cost (food, beverage, retail, labor) as a percentage of revenue decreased 0.3 percentage points from 62.3% in the first quarter of 2009 to 62.0% in first quarter 2010
- General and administrative expenses decreased $0.5 million in first quarter 2010 to $1.6 million compared to first quarter 2009
- Restaurant-level income before occupancy (“IBO”) margin improved to 23.5% in the first quarter of 2010 from 22.7% in prior year first quarter
- Company-wide EBITDA increased $0.5 million to $1.5 million in first quarter 2010 compared to $1.0 million in the first quarter 2009
- Generates positive cash flow from operations of $0.3 million
First Quarter 2010 Financial Results
For all the restaurants, the restaurant-level IBO margin was 23.5% for the first quarter of 2010 compared to 22.7% in the first quarter of 2009. This represents an increase of 0.8 percentage points in restaurant-level IBO at a time when the Company increased its advertising budget by 0.4 percentage points.
"We are extremely pleased with all phases of our plans to improve revenues,” said Steve Wagenheim, President and Chief Executive Officer of Granite City. “Last summer we implemented an aggressive grass roots marketing plan to rebuild traffic with the goal of having our sales follow. Our first quarter results reflect the commitment of our operators to follow a concise marketing plan that is now generating positive results. While we believe the casual dining sector is beginning to show strength, we are pleased to be outpacing the sector in comp sales and customer counts, allowing us to generate positive cash flow from operations. We are cautiously optimistic that this momentum will continue throughout 2010 which we believe will allow us to improve our cash position and overall operating results."
Total revenue for the first quarter 2010 increased by 3.8% to $22.2 million compared to $21.4 million for the first quarter of 2009. Total cost of sales before occupancy was $17.0 million in the first quarter or 76.5% of sales compared to prior year first quarter cost of sales before occupancy of $16.6 million or 77.3% of sales. The primary sources of improvement were a decrease in labor costs as a percentage of revenue of 0.6 percentage points and a decrease of store operating expenses as a percentage of revenue of 0.4 percentage points in the first quarter of 2010, compared to the first quarter of 2009, partially offset by a slight increase in commodity food costs and an increase in advertising expenditures.
General and administrative expenses were $1.6 million or 7.0% of sales for the first quarter of 2010, compared to $2.1 million or 9.6% of sales for the first quarter of 2009.
The net loss for the first quarter of 2010 was $.9 million or $(0.12) per share compared to a net loss of $2.7 million or $(1.01) per share in the first quarter of 2009.
| GRANITE CITY FOOD & BREWERY LTD. | |||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
| Thirteen Weeks Ended | |||||||||||||
| March 30, 2010 | March 30, 2009 | ||||||||||||
| Restaurant revenue | $ | 22,239,363 | $ | 21,424,701 | |||||||||
| Cost of sales: | |||||||||||||
| Food, beverage and retail | 6,086,246 | 5,826,253 | |||||||||||
| Labor | 7,692,523 | 7,531,642 | |||||||||||
| Direct restaurant operating | 3,227,571 | 3,193,754 | |||||||||||
| Occupancy | 2,169,712 | 1,572,200 | |||||||||||
| Total cost of sales | 19,176,052 | 18,123,849 | |||||||||||
| Pre-opening | - | 192,929 | |||||||||||
| General and administrative | 1,556,003 | 2,064,316 | |||||||||||
| Depreciation and amortization | 1,476,976 | 1,706,577 | |||||||||||
| Exit or disposal activities | 131,601 | 428,080 | |||||||||||
| (Gain) loss on disposal of assets | (48,523 | ) | 9,101 | ||||||||||
| Operating loss | (52,746 | ) | (1,100,151 | ) | |||||||||
| Interest: | |||||||||||||
| Income | 299 | 1,498 | |||||||||||
| Expense | (839,385 | ) | (1,630,958 | ) | |||||||||
|
Net interest expense |
(839,086 | ) | (1,629,460 | ) | |||||||||
| Net loss | $ | (891,832 | ) | $ | (2,729,611 | ) | |||||||
| Loss per common share, basic | $ | (0.12 | ) | $ | (1.01 | ) | |||||||
| Weighted average shares outstanding, basic | 7,366,217 | 2,699,642 | |||||||||||
|
Selected Balance Sheet Information |
|||||||||||||
| March 30, 2010 | December 29, 2009 | ||||||||||||
| Cash | $ | 1,536,284 | $ | 1,743,599 | |||||||||
| Current assets, including cash | $ | 2,826,592 | $ | 3,139,018 | |||||||||
| Total assets | $ | 54,332,253 | $ | 56,021,956 | |||||||||
| Current liabilities | $ | 11,042,279 | $ | 11,668,965 | |||||||||
| Total liabilities | $ | 47,850,382 | $ | 48,693,656 | |||||||||
| Shareholders' equity | $ | 6,481,871 | $ | 7,328,300 | |||||||||
|
Non-GAAP Reconciliations Q1 2010 Results |
||||||||||||||||||
| Total for All | ||||||||||||||||||
| Comparable |
% of |
New |
% of |
Restaurants |
% of |
|||||||||||||
| Restaurants |
Sales |
Restaurants |
Sales |
As Reported |
Sales |
|||||||||||||
| Restaurant revenues | $ 20,647,463 | 100% | $ 1,591,900 | 100% | $ 22,239,363 | 100% | ||||||||||||
| Cost of sales: | ||||||||||||||||||
| Food, beverage and retail | 5,654,651 | 27.4% | 431,595 | 27.1% | 6,086,246 | 27.4% | ||||||||||||
| Labor | 7,156,485 | 34.7% | 536,038 | 33.7% | 7,692,523 | 34.6% | ||||||||||||
| Direct restaurant operating | ||||||||||||||||||
| expenses | 3,010,752 |
14.6% |
216,819 |
13.6% |
3,227,571 |
14.5% |
||||||||||||
| Restaurant-level IBO* | $ 4,825,575 | 23.4% | $ 407,448 | 25.6% | $ 5,233,023 | 23.5% | ||||||||||||
| Occupancy | 2,169,712 | 9.8% | ||||||||||||||||
| Pre-opening | - | 0.0% | ||||||||||||||||
| General and administrative | 1,556,003 | 7.0% | ||||||||||||||||
| Company-wide EBITDA* | 1,507,308 | 6.8% | ||||||||||||||||
| Depreciation and amortization | 1,476,976 | |||||||||||||||||
| Exit or disposal activities, other | 83,078 | |||||||||||||||||
| Operating loss | (52,746) | |||||||||||||||||
| Interest: | ||||||||||||||||||
| Income | 299 | |||||||||||||||||
| Expense | (839,385) | |||||||||||||||||
|
Net interest expense |
(839,086) | |||||||||||||||||
| Net loss as reported under GAAP | $ (891,832) | |||||||||||||||||
| *See accompanying disclosure regarding use of non-GAAP financial measures. | ||||||||||||||||||
| Certain percentages may not foot due to rounding. | ||||||||||||||||||
|
Non-GAAP Reconciliations Q1 2009 Results |
|||||||||||||||||||||||||
| Total for All | |||||||||||||||||||||||||
| Comparable |
% of |
New |
% of |
Restaurants As |
% of |
||||||||||||||||||||
| Restaurants |
Sales |
Restaurants |
Sales |
Reported |
Sales |
||||||||||||||||||||
| Restaurant revenues | $ | 15,944,165 | 100 | % | $ | 5,480,536 | 100 | % | $ | 21,424,701 | 100 | % | |||||||||||||
| Cost of sales: | |||||||||||||||||||||||||
| Food, beverage and retail | 4,300,260 | 27.0 | % | 1,525,993 | 27.8 | % | 5,826,253 | 27.2 | % | ||||||||||||||||
| Labor | 5,411,324 | 33.9 | % | 2,120,318 | 38.7 | % | 7,531,642 | 35.2 | % | ||||||||||||||||
| Direct restaurant operating | |||||||||||||||||||||||||
| expenses | 2,342,766 |
14.7 |
% |
850,988 |
15.5 |
% |
3,193,754 |
14.9 |
% |
||||||||||||||||
| Restaurant-level IBO* | $ | 3,889,815 | 24.4 | % | $ | 983,237 | 17.9 | % | $ | 4,873,052 | 22.7 | % | |||||||||||||
| Occupancy | 1,572,200 | 7.3 | % | ||||||||||||||||||||||
| Pre-opening | 192,929 | 0.9 | % | ||||||||||||||||||||||
| General and administrative | 2,064,316 | 9.6 | % | ||||||||||||||||||||||
| Company-wide EBITDA* | 1,043,607 | 4.9 | % | ||||||||||||||||||||||
| Depreciation and amortization | 1,706,577 | ||||||||||||||||||||||||
| Exit or disposal activities, other | 437,181 | ||||||||||||||||||||||||
| Operating loss | (1,100,151 | ) | |||||||||||||||||||||||
| Interest: | |||||||||||||||||||||||||
| Income | 1,498 | ||||||||||||||||||||||||
| Expense | (1,630,958 | ) | |||||||||||||||||||||||
|
Net interest expense |
(1,629,460 | ) | |||||||||||||||||||||||
| Net loss as reported under GAAP | $ | (2,729,611 | ) | ||||||||||||||||||||||
| *See accompanying disclosure regarding use of non-GAAP financial measures. | |||||||||||||||||||||||||
| Certain percentages may not foot due to rounding. | |||||||||||||||||||||||||
|
Selected Cost as a Percentage of Revenue |
||||||||
| Thirteen Weeks Ended | ||||||||
| March 30, 2010 | March 31, 2009 | |||||||
| Cost as a percentage of revenue | ||||||||
| Food, beverage and retail | 27.4% | 27.2% | ||||||
| Labor | 34.6% | 35.2% | ||||||
| Total prime costs* | 62.0% | 62.3% | ||||||
| *See accompanying disclosure regarding use of non-GAAP financial measures. | ||||||||
| Certain percentages may not foot due to rounding. | ||||||||
