Revises Fiscal 2007 Earnings Guidance to Range of $1.59 to $1.64
Per Diluted Share
ATLANTA--(BUSINESS WIRE)--April 25, 2007--RARE Hospitality
International, Inc. (NASDAQ: RARE) today announced financial results
for the first quarter ended April 1, 2007. Total revenues for the
quarter, a 13-week period, were $267,639,000 compared with
$261,861,000 for the first quarter of fiscal 2006, a 14-week period.
Net earnings from continuing operations for the first quarter of
fiscal 2007 were $14,347,000, or $0.46 per diluted share, compared
with $16,754,000, or $0.49 per diluted share, for the first quarter of
fiscal 2006.
Operating highlights for the Company's continuing operations
follow.
LongHorn Steakhouse - Revenues for LongHorn Steakhouse were
$209,713,000 for the first quarter of fiscal 2007, a 13-week period,
compared with $208,006,000 for the same quarter in fiscal 2006, a
14-week period. Revenues for the first quarter of fiscal 2007
reflected the 11.4% expansion in the number of LongHorn Steakhouse
restaurants in operation to 274 at the end of the quarter from 246 at
the end of the first quarter of fiscal 2006. Ten LongHorn restaurants
opened during the latest quarter, and one restaurant closed upon the
expiration of its lease. Revenue growth from these new restaurants
partially offsets a reduction in same-store sales for the first
quarter of fiscal 2007 of 1.0%. RARE expects to open a total of 32 to
34 LongHorn Steakhouses during fiscal 2007, with seven to eight
restaurants scheduled to open during the second quarter.
The Capital Grille - Capital Grille produced revenues of
$56,058,000 for the first quarter of fiscal 2007, a 13-week period, an
8.6% increase over $51,642,000 for the first quarter of fiscal 2006, a
14-week period. A significant portion of this revenue growth was
attributable to same-store sales growth of 5.0% for the first quarter,
the concept's twentieth consecutive quarterly improvement. In
addition, revenues reflected 27 Capital Grille restaurants in
operation at the end of the first quarter of fiscal 2007, including
one that opened during the quarter, compared with 24 at the end of the
first quarter of fiscal 2006. The Company expects to open a total of
four Capital Grilles during fiscal 2007, one of which is scheduled to
open in the second quarter.
Philip J. Hickey, Jr., Chairman and Chief Executive Officer of
RARE, commented, "Our results for the first quarter, which were
consistent with our earnings guidance for the period, reflected
pressure on same-store sales in the casual dining sector. The
de-leveraging effect of this top-line pressure impacted our profit
margins for the quarter. This margin impact was partially offset by
the significant increase in same-store sales at the Capital Grille,
and we continue to be pleased with the concept's financial
performance."
Financial Guidance
Second-Quarter Fiscal 2007 - Based primarily on the Company's
results for the first quarter and second quarter to-date, RARE today
established its guidance for net earnings from continuing operations
per diluted share for the second quarter of fiscal 2007 in a range of
$0.41 to $0.43, compared with $0.38 for the second quarter of fiscal
2006. The Company's guidance for the second quarter of fiscal 2007 is
based on an assumed range of same-store sales growth of 0% to 2% for
LongHorn Steakhouse and 3% to 4% for Capital Grille, as well as the
restaurant opening plans discussed above.
Fiscal 2007 - RARE also today revised its guidance for net
earnings from continuing operations per diluted share for fiscal 2007,
a 52-week year, to a range of $1.59 to $1.64 from the previous range
of $1.62 to $1.68. The Company's guidance for fiscal 2007 is based on
an assumed range of same-store sales growth for the remaining three
quarters of 0% to 2% for LongHorn Steakhouse and 3% to 4% for Capital
Grille. The Company's guidance is also based on planned openings of 36
to 38 total restaurants during the fiscal year.
Of course, the statements contained in the preceding paragraphs
are forward-looking statements, and the achievement of these targets
is dependent not only on RARE's continued execution of its goals, but
also on risks and uncertainties listed below that could cause actual
results, performance or developments to differ materially from those
expressed or implied by these forward-looking statements.
Share Repurchase Plan
RARE today announced that its Board of Directors has authorized
the repurchase of up to $55 million of the Company's outstanding
common stock from time-to-time through May 1, 2009. This authorization
replaces all prior authorizations, which expire May 1, 2007.
Conference Call
RARE Hospitality International will hold a conference call to
discuss this release tomorrow, April 26, at 9:00 a.m. Eastern time.
Participants will have the opportunity to listen to the conference
call over the Internet by going to www.rarehospitality.com and
clicking on Investor Relations or by going to
www.investorcalendar.com. Participants are encouraged to go to the
selected web site at least 15 minutes early to register, download, and
install any necessary audio software. For those who cannot listen to
the live broadcast, a replay will be available at these sites shortly
after the call through the end of business on July 25, 2007.
Safe Harbor Provision
Statements contained in this press release concerning future
results, performance or expectations are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements include statements regarding the intent,
belief or current expectations of the Company and members of its
management team, as well as assumptions on which such statements are
based. All forward-looking statements in this press release are based
upon information available to the Company on the date of this press
release. Forward-looking statements involve a number of risks and
uncertainties, and other factors, that could cause actual results,
performance or developments to differ materially from those expressed
or implied by those forward-looking statements including the
following: failure of facts to conform to necessary management
estimates and assumptions regarding financial and operating matters;
the ability of the Company to consummate the sale of its Bugaboo Creek
Steak House business as agreed in the definitive agreement; the
Company's ability to identify and secure suitable locations for new
restaurants on acceptable terms, open the anticipated number of new
restaurants on time and within budget, achieve anticipated rates of
same-store sales, hire and train additional restaurant personnel and
integrate new restaurants into its operations; the continued
implementation of the Company's business discipline over a large and
growing restaurant base; increases in the cost of construction of new
restaurants; unexpected increases in cost of sales or employee,
pre-opening or other expenses; the economic conditions in the new
markets into which the Company expands and possible uncertainties in
the customer base in these areas; fluctuations in quarterly operating
results; seasonality; unusual weather patterns or events; changes in
customer dining patterns; the impact of any negative publicity or
public attitudes related to the consumption of beef or other products
sold by the Company; unforeseen increases in commodity pricing;
disruption of established sources of product supply or distribution;
competitive pressures from other national and regional restaurant
chains; legislation adversely affecting the restaurant industry,
including (without limitation) minimum wage and mandatory healthcare
legislation; business conditions, such as inflation or a recession, or
other negative effect on dining patterns, or some other negative
effect on the economy, in general, including (without limitation) war,
insurrection and/or terrorist attacks on United States soil; growth in
the restaurant industry and the general economy; changes in monetary
and fiscal policies, laws and regulations; and other risks identified
from time to time in the Company's SEC reports, including the annual
report on Form 10-K for fiscal 2006, quarterly reports on Form 10-Q
and its current reports on Form 8-K, registration statements, press
releases and other communications. Any forward-looking statement
speaks only as of the date it was made, and the Company undertakes no
obligation to update or revise forward-looking statements to reflect
changed assumptions, the occurrence of unanticipated events or changes
to future operating results over time.
RARE Hospitality International, Inc. currently owns, operates and
franchises 339 restaurants, including 280 LongHorn Steakhouse
restaurants, 27 Capital Grille restaurants and 30 Bugaboo Creek Steak
House restaurants.
RARE HOSPITALITY INTERNATIONAL, INC.
Unaudited Consolidated Financial Highlights
(In thousands, except per share data)
Fiscal Quarter
-------------------
13 Weeks 14 Weeks
Ended Ended
--------- ---------
April 1, April 2,
Statement of Operations Data: 2007 2006
--------- ---------
Revenues:
Restaurant sales:
LongHorn Steakhouse $209,713 $208,006
The Capital Grille 56,058 51,642
Specialty concepts 1,741 2,080
--------- ---------
Total restaurant sales 267,512 261,728
Franchise revenues 127 133
--------- ---------
Total revenues 267,639 261,861
--------- ---------
Costs and expenses:
Cost of restaurant sales 98,037 95,467
Operating expenses - restaurants 117,190 111,859
Depreciation and amortization - restaurants 10,108 9,029
Pre-opening expense 2,803 2,614
General and administrative expenses 16,464 17,105
--------- ---------
Total costs and expenses 244,602 236,074
--------- ---------
Operating income 23,037 25,787
Interest expense, net 1,535 670
Minority interest 91 95
--------- ---------
Earnings from continuing operations before
income taxes 21,411 25,022
Income tax expense 7,064 8,268
--------- ---------
Net earnings from continuing operations 14,347 16,754
Earnings (loss) from discontinued operations, net
of tax (508) 466
--------- ---------
Net earnings $13,839 $17,220
========= =========
Basic earnings per common share:
Continuing operations $0.48 $0.50
========= =========
Net earnings $0.46 $0.51
========= =========
Diluted earnings per common share:
Continuing operations $0.46 $0.49
========= =========
Net earnings $0.45 $0.50
========= =========
Weighted average common shares outstanding:
Basic 30,103 33,482
========= =========
Diluted 31,086 34,486
========= =========
April 1, Dec. 31,
Balance Sheet Data: 2007 2006
--------- ---------
Cash and short-term investments $19,806 $37,379
Total assets 705,647 695,212
Long-term debt 125,000 125,000
Obligations under capital leases, net of current
installments 49,033 41,290
Total shareholders' equity 373,882 359,648
CONTACT: RARE Hospitality International, Inc.
W. Douglas Benn, Chief Financial Officer, 770-399-9595
SOURCE: RARE Hospitality International, Inc.
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