Benihana Inc. (NASDAQ: BNHNA; BNHN), operator of the nation’s largest chain of Japanese theme and sushi restaurants, today reported results for its third fiscal quarter 2011 ended January 2, 2011.
Highlights for the Company’s third fiscal quarter 2011 relative to the third fiscal quarter 2010 include:
- Total restaurant sales increased 3.6% to $72.5 million from $70.0 million
- Total comparable restaurant sales increased 4.4%, including a 7.3% increase at Benihana Teppanyaki
- Income from operations of $1.3 million (net of $1.2 million in non-recurring costs), compared to a loss from operations of ($10.7) million (net of $0.2 million in non-recurring costs and $12.3 million in non-cash impairment charges)
- Net income of $2.2 million, or $0.12 per diluted share, compared to a net loss of ($10.9) million, or ($0.72) per diluted share
Richard C. Stockinger, Chairman, President and Chief Executive Officer, said, “We demonstrated a remarkable improvement in our operating results compared to the same quarter last year, characterized by comparable restaurant sales growth at Benihana Teppanyaki and effective management of controllable expenses across our entire Company. As part of our ongoing efforts to increase traffic and sustain the momentum of our Renewal Program, we are highlighting the distinct nature of the Benihana Teppanyaki guest experience with a new multi-media campaign, coupled with a combination of value-based promotions, media advertising, and local marketing initiatives at RA Sushi and Haru. These initiatives are designed to enhance value for all of our shareholders.”
Mr. Stockinger concluded, “In terms of our capital structure, we paid down an additional $4.1 million of outstanding debt during the quarter, resulting in total borrowings outstanding of $12.8 million and an available borrowing balance of $18.4 million as of January 2, 2011. We are pleased to announce that we have completed an amendment and restatement to our credit facility agreement, allowing us a $30 million borrowing capacity through February 2014. Although we have limited our expenditure of capital to a handful of remodeling projects this year, with the economy beginning to exhibit some signs of recovery, we are taking steps to prepare our brands for development, in line with our overall growth strategy.”
Third Fiscal Quarter 2011 Results
For the third fiscal quarter of 2011, total revenues increased 3.6% to $72.9 million from $70.4 million in the third fiscal quarter of 2010. Total restaurant sales increased 3.6% to $72.5 million from $70.0 million in the third fiscal quarter of 2010.
Company-wide comparable restaurant sales increased 4.4%, representing the fourth consecutive quarter of positive comparable restaurant sales. By concept, comparable restaurant sales increased 7.3% at Benihana Teppanyaki, but decreased 1.5% at RA Sushi and 1.1% at Haru. There were a total of 1,158 store-operating weeks in the third fiscal quarter of 2011 compared to a total of 1,176 store-operating weeks in the third fiscal quarter of 2010.
Cost of food and beverage sales for the third fiscal quarter of 2011 totaled $17.6 million, compared to $17.0 million in the third fiscal quarter of 2010. As a percentage of restaurant sales, cost of food and beverage sales remained stable on a year-over-year basis.
Restaurant operating expenses for the third fiscal quarter of 2011 totaled $46.7 million, or 64.4% of restaurant sales, compared to $47.0 million, or 67.2% of restaurant sales, in the third fiscal quarter of 2010. The year-over-year decrease as a percentage of restaurant sales reflected improved cost and labor management in the current quarter in connection with the continued efforts of the Renewal Program.
General and administrative expenses for the third fiscal quarter of 2011 totaled $7.3 million, or 10.1% of total revenues, compared to $4.8 million, or 6.8% of total revenues, in the third fiscal quarter of 2010. During the third fiscal quarter of 2011, the Company incurred $0.2 million in higher corporate salaries as a result of changes in Benihana Teppanyaki corporate operations and the regional manager and regional chef structure and $0.4 million in costs related to the ongoing execution of the Company’s accounting and payroll function outsourcing agreement. The latter was in turn offset by an approximately $0.5 million reduction in corporate salaries. The Company also recorded an additional $0.3 million in legal fees with respect to various legal items.
The Company incurred certain non-recurring costs of approximately $1.2 million in corporate general and administrative expenses, including approximately $0.5 million associated with various financial, operational and strategic growth consulting agreements, along with $0.7 million in connection with our evaluating strategic alternatives, including a potential sale of the Company.
During the third fiscal quarter of 2010, the Company incurred impairment charges of $12.3 million. There were no similar charges in the third fiscal quarter of 2011.
Income from operations for the third fiscal quarter of 2011 was $1.3 million compared to loss from operations of ($10.7) million in the third fiscal quarter of 2010. Non-recurring costs were $1.2 million during the recent quarter as compared to $0.7 million during the same quarter in the prior year.
Net income for the third fiscal quarter of 2011 was $2.2 million, or $0.12 in diluted earnings per share, compared to net loss of ($10.9) million, or ($0.72) in diluted earnings per share, in the third fiscal quarter 2010.
Headquartered in Miami, Benihana Inc. (NASDAQ GS: BNHN, BNHNA) is the nation’s leading operator of Japanese theme and sushi restaurants with 97 restaurants nationwide, including 63 Benihana restaurants, nine Haru sushi restaurants, and 25 RA Sushi restaurants. Famous for its entertaining chefs who present and prepare delicious teppanyaki entrees at hibachi tables, as well as sushi and other Japanese favorites, Benihana introduced Japanese food to America in 1964. RA Sushi offers a subtly sexy and energetic experience with a hip ambience, and Haru is an urban, upscale sushi concept. In addition, 20 franchised Benihana restaurants are operating in the United States, Latin America and the Caribbean. To learn more about Benihana Inc. and its three restaurant concepts, please view the corporate video at www.benihana.com/about/video.