Restaurant Never Gained Traction since Opening
Granite City Food & Brewery Ltd. (Nasdaq:GCFB) a Modern American upscale
casual restaurant chain today announced the closing of its Rogers,
Arkansas location. The company has not previously closed a restaurant.
The company expects the closing of the location will improve its
restaurant-level EBITDA, cash flow, income and management focus. Since
opening in October 2007, the restaurant has failed to generate positive
cash flow and had approximately $1.3 million of net loss at this
location since its opening. Many problems have plagued the location
since the opening, including a significant delay in construction of a
main road from the highway directly to the restaurant location and lower
overall traffic from guests now plagued by high gas prices.
“We are disappointed to be closing the Rogers
location, but we feel it is the right decision as we work toward
improving margins and cash flow,” commented
Steve Wagenheim, Granite City’s CEO and
President. “Granite City typically is able to
open strong and grow its business through word of mouth about our food
and service. With the main artery to our Rogers location closed we were
never able to gain traction in the market. We were faced with having to
spend a considerable amount of money to remarket the restaurant but felt
that it was more prudent to focus our capital and personnel resources on
those restaurants that drive our core concept. We are grateful to the
customers and personnel in the Arkansas region who welcomed our concept
and hope that we can one day move back into the market.”
The company is working with real estate professionals to find a
replacement tenant for the location. At present, the company is
obligated to pay approximately $400,000 in annual lease and interest
costs related to the Rogers location.
Granite City Food & Brewery Ltd. is a Modern American upscale casual
restaurant chain that operates 25 restaurants in 11 states. The menu
features affordable, high quality family favorite menu items prepared
from made-from-scratch recipes and served in generous portions. The
sophisticated yet unpretentious restaurants, proprietary food and
beverage products, attractive price points and high service standards
combine for a great dining experience. Its latest restaurant opened in
South Bend, Indiana in July 2008. Granite City opened its first
restaurant in 1999 and expanded from its Midwestern base. Additional
information about Granite City Food & Brewery can be found at the company’s
website (www.gcfb.net).
Certain statements made in this press release of a non-historical nature
constitute "forward- looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to certain risks and uncertainties that could
cause actual results to differ materially from those anticipated. Such
factors include, but are not limited to, changes in economic conditions,
changes in consumer preferences or discretionary consumer spending, a
significant change in the performance of any existing restaurants, the
ability to obtain financing for, and complete construction of,
additional restaurants at acceptable costs, and the risks and
uncertainties described in our Current Report on Form 10-K filed with
the Securities and Exchange Commission on March 10, 2008.
Granite City Food & Brewery Ltd.
James G. Gilbertson,
952-215-0676
Chief Financial Officer
