Grill Concepts Reports Strong 2002 Fourth Quarter Earnings, Third Consecutive Year of Profitability
FRIDAY, MARCH 28, 2003 7:30 AM
- PR Newswire
LOS ANGELES, Mar 28, 2003 /PRNewswire-FirstCall via COMTEX/ -- Grill Concepts, Inc. (GRIL) today reported a 148 percent increase in net income for the fourth quarter ended December 29, 2002. The company achieved its third consecutive year of profitability.
Net income for the 2002 fourth quarter increased significantly to $397,000, or $0.07 per diluted share, from the prior-year's fourth quarter net income of $160,000, or $0.03 per diluted share. Total systemwide sales, including all restaurants, owned, operated, managed and licensed, increased to $16.2 million from $14.7 million in the corresponding period last year. Consolidated revenues, including management and license fees, totaled $10.7 million, compared with $11.5 million in the fourth quarter of 2001. Same store sales for the 2002 fourth quarter increased 2.3%.
For the year, Grill Concepts recorded net income of $133,000, or $0.02 per diluted share, compared with $469,000, or $0.09 per diluted share, in 2001. Total systemwide sales, including all restaurants, owned, operated, managed or licensed, declined slightly to $62.2 million from $62.4 million the prior year. Consolidated revenues, including management and license fees, totaled $42.3 million, compared with $45.4 million a year ago. Same store sales declined 3.6% for the year.
"Considering corporate spending cutbacks, reduced business travel, and the difficult economic and geopolitical conditions that challenged us throughout the year, we are very pleased to end the year with a strong performance in the fourth quarter," said Robert Spivak, president and chief executive officer of Grill Concepts. "Improved traffic and check averages contributed to the quarter, which enabled us to continue the momentum of the past few years and achieve our third straight year of profitability. This achievement, despite lower sales, validates the efforts we have been making to control costs and underscores the benefits of a larger critical mass and growing brand recognition."
Stringent cost controls, improved purchasing, and menu refinements continued to result in improved operating efficiencies for the company. Spivak said cost of sales decreased by 7.9% from 2001 and decreased as a percentage of sales to 27.0% in 2002 from 27.3% a year ago. Spivak further noted that cost containment efforts worked to make up for significant increases in insurance costs, as well as a minimum wage increase in California.
"We are also pleased that we continued to strengthen our balance sheet by lowering debt, payables, inventory, and receivables," Spivak said. "We believe this progress has well positioned the company to gain measurable benefits when the economy rebounds."
"Moving forward cautiously, we made marked progress executing on our strategic growth plans to expand our restaurant network," added Spivak. During the year, two new Daily Grill restaurants debuted in new markets. The company opened a Daily Grill in the heart of San Francisco, just west of Union Square, adjacent and connecting to the Handlery Hotel, and opened its first restaurant under a joint development agreement with Starwood Hotels & Resorts Worldwide, Inc. in the Westin Galleria Hotel in Houston. In January 2003, the company opened a new Daily Grill restaurant in the South Bay area of Southern California, leveraging its popularity in the region. During the year, Grill Concepts also announced plans to open its fourth Washington, D.C. metropolitan area restaurant mid-2003 in the Hyatt Regency Bethesda.
The company said it closed the Encino Daily Grill after the 10-year lease expired and sold its last Pizzeria Uno in Cherry Hill, New Jersey. The sale of the Pizzeria Uno completed Grill Concepts' long-term strategy to divest interest in that concept.
About Grill Concepts, Inc.
Grill Concepts owns and manages upscale casual and fine dining, full service restaurants under two core brand names: The Grill on the Alley and Daily Grill, serving classic American grill fare in a comfortable, sophisticated atmosphere, featuring hearty portions of freshly prepared signature dishes. The company operates 21 restaurants including The Grill on the Alley-branded restaurants in Beverly Hills, Hollywood and San Jose, California, and Chicago, as well as Daily Grill restaurants in Southern and Northern California, the Washington, D.C. metropolitan region, Houston, Texas and Skokie, Illinois.
This news release contains forward-looking statements, which are based on current operations, plans and expectations. Such statements include, but are not limited to, the company's ability to further enhance productivity and operating efficiencies, the company's ability to accelerate its growth as a result of the Starwood Hotels development agreement, among other factors. Actual results may differ materially from these statements due to risks and uncertainties beyond the company's control, which are detailed from time to time in the company's filings with the United States Securities and Exchange Commission.
