HOUSTON, Aug. 8 /PRNewswire-FirstCall/ -- Landry's Restaurants, Inc.
(NYSE: LNY) (the 'Company'), today announced its results for the second
quarter ended June 30, 2008. The Company's income from continuing operations
for the quarter was $0.91 per share-diluted as compared to $0.44 reported last
year.
Revenues from continuing operations for the three months ended June 30,
2008, totaled $311.4 million, as compared to $308.0 million a year earlier,
including $66.5 million and $66.6 million, respectively from the Golden Nugget
properties. Income from continuing operations for the quarter was
$14.0 million, compared to $9.2 million reported last year. Included in the
current quarter amount is a non-cash gain of $2.9 million after-tax for the
change in value of interest rate swaps partially offset by a non-cash
impairment charge of $1.0 million after-tax, for a net of $0.12 per
share-diluted. The prior comparable period includes $2.5 million after-tax
expense for legal costs associated with the Company's stock option review and
$4.1 million after-tax in expenses related to refinancing the Golden Nugget.
Excluding the impact of these items, earnings per share-diluted from
continuing operations were $0.79 for the quarter compared to $0.75 for the
prior year. During the second quarter of 2008, consolidated pre-tax interest
expense was $20.0 million compared to $14.0 million in the comparable period
last year primarily due to additional borrowings associated with the June 2007
Golden Nugget refinancing as well as the 2.0% increase in the interest rate on
the $400.0 million Senior Notes effective August 2007. Same store sales for
the Company's restaurants were negative 2.5% for the quarter which includes
the effect of the Easter holiday shift to the first quarter in 2008 from the
second quarter in 2007. The Company's results benefited from a shift to
higher margin amusement and entertainment revenues primarily at the Kemah
Boardwalk. Same store sales for July were essentially flat.
Rick H. Liem, Executive Vice President and CFO stated, 'Results for the
second quarter were encouraging given the difficult economic circumstances.
Both our restaurant hospitality group and our Golden Nugget properties
generated higher EBITDA in the current quarter than they did last year.'
Revenues from continuing operations for the six months ended June 30,
2008, totaled $606.2 million, as compared to $591.6 million a year earlier.
Net earnings from continuing operations for the six months were $16.3 million,
compared to $32.0 million reported last year. Earnings per share-diluted from
continuing operations for the six months were $1.05, compared to $1.49 in the
prior year. The net change in the fair value of interest rate swaps is not
material year to date for 2008. Included in earnings from continuing
operations for the prior year period, are gains on property sales and
investments of approximately $13.0 million after-tax, offset by costs
associated with the internal stock option review and refinancing the Golden
Nugget of approximately $6.6 million after-tax. Excluding these items,
earnings per share from continuing operations were $1.19 for the prior year.
As a result of our 2006 sale of the Joe's Crab Shack concept and closure
of certain additional locations, the results of operations for these
restaurants are reflected as discontinued operations in the Company's
financial statements. The loss from discontinued operations, net of taxes,
for the quarter was $0.2 million or $0.01 per share compared to a loss of $2.3
million or $0.11 per share in the prior year. For the six months ended June
30, 2008, the loss for discontinued operations, net of tax was $0.9 million or
$0.06 per share as compared to a loss of $3.0 million or $0.14 per share in
the prior year. Therefore, the consolidated net income for the quarter was
$13.9 million or $0.90 per share - diluted, compared to net income of $6.9
million or $0.33 per share - diluted in the comparable period in 2007.
Consolidated net income for the six months ended June 30, 2008 was $0.99 per
share-diluted compared to $1.35 per share-diluted for the comparable period in
the prior year.
The Senior Note holders have an option to require the Company to redeem
the Notes beginning February 28, 2009 at 101% of face value. As a result, the
Notes are reflected as current liabilities in the Company's financial
statements.
The Company's continuing operations include restaurants primarily under
the trade names Landry's Seafood House, Chart House, Rainforest Cafe,
Saltgrass Steak House and the Signature Group as well as other businesses
including hotels, marinas, amusements, retail and the Golden Nugget Hotels and
Casinos in Las Vegas and Laughlin, Nevada.
Proposed Merger
On June 16, 2008, the Company entered into a definitive merger agreement
with Fertitta Holdings, Inc., Fertitta Acquisition Co. and, for limited
purposes, Tilman J. Fertitta, pursuant to which Fertitta Holdings agreed to
acquire all of the Company's outstanding common stock for $21.00 per share in
cash. Fertitta Holdings and Fertitta Acquisition are new companies formed by
Tilman J. Fertitta, Chairman of the Board, Chief Executive Officer and
President of the Company. On July 17, 2008, the Company filed a preliminary
proxy statement and related materials with the Securities and Exchange
Commission that provides details about the pending sale of the Company. On
August 1, 2008, the Company announced that the 'go-shop' process conducted by
Cowen and Company ('Cowen'), the independent financial advisor to the special
committee of independent directors of the Company, ended. During the
'go-shop' period, Cowen held a variety of discussions with potential
transaction partners and no proposals were received from anyone.
The Company is continuing to work with Fertitta Holdings, Inc. to complete
the merger in a timely manner, subject to satisfaction of the conditions set
forth in the merger agreement. In addition, on August 1, 2008, the Company
and Fertitta Holdings, Inc. filed for early termination of any applicable
waiting period required by the Hart Scott Rodino Act.
IMPORTANT ADDITIONAL INFORMATION REGARDING THE MERGER HAS BEEN FILED WITH
THE SEC.
In connection with the proposed merger, the Company has filed a
preliminary proxy statement and related materials with the Securities and
Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE
DEFINITIVE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES THERETO. Investors and
security holders may obtain a free copy of the proxy statement (when
available) and other documents filed by the Company at the Securities and
Exchange Commission's website at http://www.sec.gov. The proxy statement and
such other documents may also be obtained for free from the Company by
directing such request to Landry's Restaurants, Inc. Investor Relations, 1510
West Loop South, Houston, TX 77027, telephone: (713) 850-1010.
The Company and its directors, executive officers and certain other
members of its management and employees may be deemed to be participants in
the solicitation of proxies from its stockholders in connection with the
proposed merger. Information regarding the interests of the Company's
participants in the solicitation will be included in the definitive proxy
statement relating to the proposed merger when it becomes available.
This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered
by safe harbors created thereby. Stockholders are cautioned that all forward-
looking statements are based largely on the Company's expectations and involve
risks and uncertainties, some of which cannot be predicted or are beyond the
Company's control. Some factors that could realistically cause results to
differ materially from those projected in the forward-looking statements
include the occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement with Fertitta Holdings,
Inc.; the outcome of any legal proceedings that have been, or may be,
instituted against the Company related to the merger agreement; the inability
to complete the merger due to the failure to obtain stockholder approval for
the merger or the failure to satisfy other conditions to completion of the
merger, including the receipt of all regulatory approvals related to the
merger; the failure to obtain the necessary financing arrangements set forth
in the debt and equity commitment letters delivered pursuant to the merger
agreement; risks that the proposed transaction disrupts current plans and
operations and the potential difficulties in employee retention as a result of
the merger; the ability to recognize the benefits of the merger; the effects
of local and national economic, credit and capital market conditions on the
economy in general, and on the gaming, restaurant and hotel industries in
particular; changes in laws, including increased tax rates, regulations or
accounting standards, third-party relations and approvals, and decisions of
courts, regulators and governmental bodies; litigation outcomes and judicial
actions; acts of war or terrorist incidents or natural disasters; the effects
of competition, including locations of competitors and operating and market
competition; ineffective marketing or promotions, weather, management
turnover, higher interest rates and gas prices, construction at the Golden
Nugget properties, negative same store sales, or the Company's inability to
continue its expansion strategy and other risks described in the filings of
the Company with the Securities and Exchange Commission, including but not
limited to, the Company's Annual Report on Form 10-K for the year ended
December 31, 2007. The Company may not update or revise any forward-looking
statements made in this press release.
LANDRY'S RESTAURANTS, INC.
CONSOLIDATED INCOME STATEMENTS (000's except per share amounts)
FOR THE QUARTER FOR THE QUARTER
ENDED ENDED
June 30, 2008 June 30, 2007
REVENUES $311,393 100.0% $308,020 100.0%
COST OF REVENUES 67,707 21.8% 69,076 22.4%
LABOR 98,231 31.5% 96,693 31.4%
OTHER OPERATING EXPENSES 77,250 24.8% 75,090 24.4%
UNIT LEVEL PROFIT 68,205 21.9% 67,161 21.8%
GENERAL & ADMINISTRATIVE 12,353 4.0% 16,733 5.4%
PRE-OPENING COSTS 373 0.1% 827 0.3%
DEPRECIATION & AMORTIZATION 17,859 5.8% 16,075 5.2%
ASSET IMPAIRMENT EXPENSE 1,593 0.5% - 0.0%
TOTAL OPERATING INCOME 36,027 11.6% 33,526 10.9%
OTHER EXPENSE 15,768 19,927
INCOME FROM CONTINUING OPERATIONS
BEFORE TAXES 20,259 13,599
TAX PROVISION 6,230 4,359
INCOME FROM CONTINUING OPERATIONS 14,029 9,240
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAXES (157) (2,297)
NET INCOME $13,872 $6,943
EARNINGS (LOSS) PER SHARE - BASIC:
INCOME FROM CONTINUING
OPERATIONS $0.92 $0.45
LOSS FROM DISCONTINUED
OPERATIONS (0.01) (0.11)
NET INCOME $0.91 $0.34
AVERAGE SHARES 15,260 20,575
EARNINGS (LOSS) PER SHARE - DILUTED:
INCOME FROM CONTINUING
OPERATIONS $0.91 $0.44
LOSS FROM DISCONTINUED
OPERATIONS (0.01) (0.11)
NET INCOME $0.90 $0.33
AVERAGE SHARES 15,500 21,100
EBITDA from continuing operations (earnings before interest, taxes,
depreciation and amortization):
Net income $13,872 $6,943
Add back:
Loss from discontinued operations 157 2,297
Tax provision 6,230 4,359
Other expense 15,768 19,927
Depreciation and amortization 17,859 16,075
Asset impairment expense 1,593 -
EBITDA $55,479 $49,601
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED ENDED
June 30, 2008 June 30, 2007
REVENUES $606,218 100.0% $591,648 100.0%
COST OF REVENUES 131,138 21.6% 130,817 22.1%
LABOR 194,391 32.1% 187,130 31.7%
OTHER OPERATING EXPENSES 152,084 25.1% 146,834 24.8%
UNIT LEVEL PROFIT 128,605 21.2% 126,867 21.4%
GENERAL & ADMINISTRATIVE 25,144 4.1% 29,508 5.0%
PRE-OPENING COSTS 838 0.1% 1,565 0.3%
DEPRECIATION & AMORTIZATION 35,673 5.9% 32,329 5.5%
ASSET IMPAIRMENT EXPENSE 1,593 0.3% - 0.0%
TOTAL OPERATING INCOME 65,357 10.8% 63,465 10.7%
OTHER EXPENSE 41,903 14,935
INCOME FROM CONTINUING OPERATIONS
BEFORE TAXES 23,454 48,530
TAX PROVISION 7,180 16,515
INCOME FROM CONTINUING OPERATIONS 16,274 32,015
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAXES (881) (2,956)
NET INCOME $15,393 $29,059
EARNINGS (LOSS) PER SHARE - BASIC:
INCOME FROM CONTINUING
OPERATIONS $1.07 $1.53
LOSS FROM DISCONTINUED
OPERATIONS (0.06) (0.14)
NET INCOME $1.01 $1.39
AVERAGE SHARES 15,260 20,950
EARNINGS (LOSS) PER SHARE - DILUTED:
INCOME FROM CONTINUING
OPERATIONS $1.05 $1.49
LOSS FROM DISCONTINUED
OPERATIONS (0.06) (0.14)
NET INCOME $0.99 $1.35
AVERAGE SHARES 15,515 21,500
EBITDA from continuing operations (earnings before interest, taxes,
depreciation and amortization):
Net income $15,393 $29,059
Add back:
Loss from discontinued operations 881 2,956
Tax provision 7,180 16,515
Other expense 41,903 14,935
Depreciation and amortization 35,673 32,329
Asset impairment expense 1,593 -
EBITDA $102,623 $95,794
EBITDA is not a generally accepted accounting principles ('GAAP')
measurement and is presented solely as a supplemental disclosure because the
Company believes that it is a widely used measure of operating performance in
the restaurant industry. EBITDA is simply shown above as it is a commonly
used non-GAAP valuation statistic.
LANDRY'S RESTAURANTS, INC.
CONDENSED UNAUDITED BALANCE SHEETS
($ in Millions except per share amounts)
June 30, 2008 December 31, 2007
(unaudited)
Cash & equivalents $45.9 $39.6
Assets related to discontinued
operations 5.9 10.0
Other current assets 84.3 93.9
Total current assets 136.1 143.5
Property & equipment, net 1,261.4 1,250.1
Other assets 102.3 109.4
Total assets $1,499.8 $1,503.0
Current liabilities $675.0 $300.7
Liabilities related to discontinued
operations 2.8 4.0
Long-term debt 408.3 801.4
Other non-current 80.5 80.0
Total liabilities 1,166.6 1,186.1
Total stockholders' equity 333.2 316.9
Total liabilities & equity $1,499.8 $1,503.0
Net book value per share $20.64 $19.62
SOURCE Landry's Restaurants, Inc.
