30th Granite City Location
Opens in Lyndhurst, Ohio
Granite City Food & Brewery Ltd. (OTCQB: GCFB),
a casual dining restaurant group, today reported results for the
third quarter ended October 1, 2013.
Highlights were as follows:
- Total restaurant sales increased 0.7%
to $31.4 million for the third quarter of 2013 from $31.1 million
in the third quarter of 2012
- Total restaurant sales increased 11.3%
to $100.3 million for the first three quarters of 2013 from $90.1
million in the first three quarters of 2012
- Same store sales decreased 3.8% in the
third quarter of 2013 over the third quarter of 2012
- Same store sales increased 0.4% in the
first three quarters of 2013 over the first three quarters of
2012
- Company recorded approximately $6.1
million in Adjusted EBITDA in the first three quarters of 2013
compared to $5.4 million in the first three quarters of 2012
“This past quarter provided us with a number of challenges, both
internally and externally,” commented Rob Doran, CEO. “During the
third quarter we saw an overall softening of same-store-sales for
the casual dining industry. This occurred shortly after we placed
additional pressure on our field staff with a new menu roll-out. In
general, the menu roll-out caused food and labor costs to increase
as the kitchen executed new menu items and our servers spent
additional time explaining new items to our guests and ensuring
guest satisfaction. As a result, our sales and margins during the
quarter fell below our internal expectations. The good news is that
we believe we are now building back our margins to levels prior to
the new menu roll-out as the restaurants and our guests become
comfortable with the changes to our updated menu. However, a softer
sales environment is expected to persist. Finally, we are very
pleased to announce the opening of an additional prototype
restaurant in Lyndhurst, Ohio. Although the sales figures are still
very early, we are pleased with the opening and anticipate that
this restaurant will be one of our stronger locations.”
Third Quarter 2013 Financial Results
Total revenue for third quarter 2013 increased by 0.7% to $31.4
million compared to $31.1 million for the third quarter of 2012.
This increase was the result of two additional locations in
operation in the third quarter of 2013 compared to that of 2012.
Comparable restaurant revenue, which includes restaurants which we
have operated for over 18 months, decreased 3.8%. Total cost of
sales before occupancy was $23.9 million in the third quarter of
2013 or 76.1% of revenue compared to prior year third quarter cost
of sales before occupancy of $23.5 million or 75.3% of revenue.
General and administrative expenses were $2.5 million or 7.8% of
revenue for the third quarter of 2013 compared to $2.3 million or
7.4% of revenue for the third quarter of 2012. We believe that the
benefit of restaurant, menu and food upgrades, and future
restaurant unit growth will help to reduce general and
administrative expenses as a percentage of revenue.
The net loss for the third quarter of 2013 was $1.7 million
compared to a net loss of $0.9 million in the third quarter of
2012. Net loss per share available to common shareholders was
$(0.23) and $(0.14) for the third quarters of 2013 and 2012,
respectively. Net loss per share available to common shareholders
in the third quarters of 2013 and 2012 included $(0.02) and $(0.03)
attributable to a declared dividend on preferred stock,
respectively. Weighted average shares outstanding in the third
quarters of 2013 and 2012 were 8.2 million and 8.0 million,
respectively.
Year-to-Date 2013 Financial Results
Total revenue for first three quarters 2013 increased by 11.3%
to $100.3 million compared to $90.1 million for the first three
quarters of 2012. This increase was the result of an additional
fiscal week in the first quarter of 2013 and three additional
locations in operation in the first three quarters of 2013 compared
to that of 2012. Comparable restaurant revenue, which includes
restaurants which we have operated for over 18 months, increased
0.4%. Total cost of sales before occupancy was $75.7 million in the
first three quarters of 2013 or 75.5% of revenue compared to prior
year first three quarters cost of sales before occupancy of $67.4
million or 74.8% of revenue.
General and administrative expenses were $7.6 million or 7.5% of
revenue for the first three quarters of 2013 compared to $7.2
million or 8.0% of revenue for the first three quarters of 2012.
This decrease in general and administrative expense as a percent of
revenue was primarily attributable to the larger sales base
associated with the additional fiscal week in the first quarter of
2013 and the additional restaurants in operation during the first
three quarters of 2013.
The net loss for the first three quarters of 2013 was $2.7
million compared to a net loss of $3.1 million in the first three
quarters of 2012. Net loss per share available to common
shareholders was $(0.40) and $(0.64) for the first three quarters
of 2013 and 2012, respectively. Net loss per share available to
common shareholders in the first three quarters of 2013 and 2012
included $(0.07) and $(0.10) attributable to declared dividends on
preferred stock, respectively. Weighted average shares outstanding
in the first three quarters of 2013 and 2012 were 8.1 million and
5.9 million, respectively.
Outlook
Updated guidance for fiscal year 2013 is as follows:
- Net sales are anticipated to be between
$125 million and $135 million.
- Adjusted EBITDA is expected to be
between $7.5 million and $8.5 million. As the reconciliation tables
below indicate, we derive EBITDA by adding back the following items
to operating loss: net interest expense, disposal and exit
activities and any related gain or (loss), depreciation and
amortization, acquisition costs, pre-opening costs, termination
costs, property write-off costs, non cash compensation and any
provision for income taxes. Since the company has many capital
leases, we further reduce EBITDA for the difference between the
fixed rent recorded and the actual amount paid for rent expense to
generate Adjusted EBITDA.
Third Quarter 2013 Conference Call
The company will host a conference call to discuss its third
quarter financial results on Tuesday, November 12, 2013 at 10:00
a.m. Central Time. The call may be accessed by calling
1-855-214-4066 and referencing code 21687602. A replay of the call
will be available for 30 days and may be accessed by calling
1-800-633-8625 and entering replay code 21687602.
About Granite City
Granite City Food & Brewery Ltd. develops and operates two
casual dining concepts: Granite City Food & Brewery and
Cadillac Ranch All American Bar & Grill. Granite City Food
& Brewery is a polished casual American restaurant that
features a great dining experience with affordable, high-quality
menu items prepared from made-from-scratch recipes, served in
generous portions. There is a brewery onsite, serving hand-crafted
and micro brews. Granite City opened its first restaurant in 1999
and is expanding nationwide; there are currently 30 Granite City
restaurants in 13 states. Cadillac Ranch restaurants feature
freshly prepared, authentic, All-American cuisine in a fun, dynamic
environment. Its patrons enjoy a warm, Rock N’ Roll inspired
atmosphere, with plenty of room for friends, music and dancing. The
Cadillac Ranch menu is diverse with offerings ranging from homemade
meatloaf to pasta dishes, all freshly prepared using quality
ingredients. The Company purchased its first Cadillac Ranch in
November 2011 and has since purchased five additional Cadillac
Ranch restaurants along with its intellectual property. The Company
currently operates six Cadillac Ranch restaurants in five states.
Additional information about Granite City Food & Brewery can be
found at www.gcfb.com.
Forward-Looking Statements, Non-GAAP Financial Measurements
and Adjusted Financial Measures
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, our ability
to continue funding our operations and meet our debt service
obligations, and the risks and uncertainties described in the
Cautionary Statement filed as Exhibit 99 to our Quarterly Report on
10-Q filed with the Securities and Exchange Commission on May 17,
2013.
Additionally, this press release contains certain non-GAAP
financial measures, including references to restaurant-level IBO,
company-wide EBITDA and adjusted EBITDA. As compared to the nearest
GAAP measurement for our company, restaurant-level IBO represents
revenue less cost of food, beverage, retail, labor and direct
restaurant operating expenses. We use restaurant-level IBO and
restaurant-level IBO as a percentage of revenue as internal
measurements of restaurant-level operating performance.
Restaurant-level IBO as we define it may not be comparable to
similar measurements used by other companies and is not a measure
of performance or liquidity presented in accordance with GAAP. We
believe that restaurant-level IBO is an important component of our
financial results because it is a widely used measurement within
the restaurant industry to evaluate restaurant-level productivity,
efficiency, and performance. We use restaurant-level IBO as a means
of evaluating our restaurants’ financial performance compared with
our competitors. As compared to the nearest GAAP measurement for
our company, company-wide EBITDA represents operating income (loss)
with the add-back of depreciation and amortization, net loss (gain)
on disposal of assets and exit or disposal costs. We use
company-wide EBITDA as a way to measure our overall internal
operational performance without restaurant closings and as a means
of evaluating our financial performance compared with our
competitors. As compared to the nearest GAAP measurement for our
company, adjusted EBITDA represents operating income (loss) with
the add-back of net interest expense, disposal and exit activities
and any related gain or (loss), depreciation and amortization,
acquisition costs, pre-opening costs, termination costs, property
write-off costs, non cash compensation and any provision for income
taxes, and further adjusts for the difference between the amount of
fixed rent recorded on the statements of operations and the actual
amount paid for rent expense. We use adjusted EBITDA as a way to
measure our overall internal operational performance without
restaurant openings and/or closings and as a means of evaluating
our restaurants’ financial performance compared with our
competitors. These non-GAAP measurements should not be used as
substitutes for net loss, net cash provided by or used in
operations or other financial data prepared in accordance with
GAAP. Schedules of reconciliations of restaurant-level IBO,
company-wide EBITDA and adjusted EBITDA for the third quarter and
first three quarters of 2013 and 2012 are provided herein.
Finally, in order to provide supplemental results of operations
information, we have included certain adjusted financial measures.
In particular, we have presented various financial metrics for
comparable restaurants, which are those restaurants that we have
operated for more than 18 months, and our new restaurants which are
those restaurants that we have operated for 18 months or less. The
contributions of these groups of restaurants to company-wide
performance are set forth herein.
Granite City Food & Brewery Ltd.
Condensed Consolidated Statements of Operations
Thirteen Weeks Ended 40 Weeks
Ended 39 Weeks Ended October 1, 2013 September 25,
2012 October 1, 2013 September 25, 2012 Restaurant revenue $
31,356,336 $ 31,135,288 $ 100,273,122 $ 90,072,910 Cost of
sales: Food, beverage and retail 8,687,793 8,412,835 27,461,261
24,328,465 Labor 10,206,511 10,293,142 32,630,017 29,740,985 Direct
restaurant operating 4,957,869 4,749,016 15,593,877 13,340,009
Occupancy 2,756,331 2,573,685
8,218,112 7,351,885
Cost of sales and occupancy
26,608,504 26,028,678 83,903,267 74,761,344 General and
administrative 2,451,488 2,315,538 7,555,994 7,207,083 Depreciation
and amortization 2,042,082 1,920,425 5,994,887 5,493,719
Pre-opening 411,836 166,582 1,035,802 915,413 Acquisition costs
117,480 199,560 193,539 684,745 Loss on disposal of assets 162,494
144,950 462,900 368,263 Exit or disposal activities
14,315 15,986 46,390
49,261 Total costs and expenses 31,808,199
30,791,719 99,192,779
89,479,828 Operating income (451,863 ) 343,569 1,080,343
593,082 Interest: Income - - - 32 Expense on capital
leases (933,615 ) (948,818 ) (2,839,483 ) (2,821,590 ) Other
interest expense (293,865 ) (283,697 )
(895,563 ) (899,865 ) Net interest expense
(1,227,480 ) (1,232,515 ) (3,735,046 )
(3,721,423 ) Net loss $ (1,679,343 ) $ (888,946 ) $
(2,654,703 ) $ (3,128,341 ) Loss per common share, basic $
(0.23 ) $ (0.14 ) $ (0.40 ) $ (0.64 ) Weighted average
shares outstanding, basic 8,199,432 8,002,478
8,148,251 5,873,258
Selected Balance Sheet
Information
October 1, 2013 December 25, 2012
Cash $ 978,328 $ 2,566,034 Current assets, including cash $
6,125,517 $ 5,905,523 Total assets $ 73,466,025 $ 71,766,785
Current liabilities $ 14,383,859 $ 14,811,246 Total liabilities $
74,774,465 $ 70,258,483 Shareholders' (deficit) equity $ (1,308,440
) $ 1,508,302
Non-GAAP Reconciliations Q3 2013
Results
Total for All Comparable
% of
New
% of
Restaurants
% of
Restaurants
Sales
Restaurants
Sales
As Reported
Sales
Restaurant revenues $ 27,184,833 100 % $ 4,171,503 100 % $
31,356,336 100 % Cost of sales: Food, beverage and retail
7,891,904 29.0 % 795,889 19.1 % 8,687,793 27.7 % Labor 9,153,945
33.7 % 1,052,566 25.2 % 10,206,511 32.6 % Direct restaurant
operating expenses 4,460,550 16.4 % 497,319 11.9 %
4,957,869 15.8 % Restaurant-level IBO* $ 5,678,434
20.9 % $ 1,825,729 43.8 % $ 7,504,163 23.9 % Occupancy
2,756,331 8.8 % General and administrative 2,451,488 Pre-opening
411,836 Acquisition costs 117,480 Company-wide
EBITDA* 1,767,028 5.6 % Depreciation and amortization
2,042,082 Exit or disposal activities, other 176,809
Operating loss (451,863 ) Interest: Income - Expense
(1,227,480 ) Net interest expense (1,227,480 ) Net
loss $ (1,679,343 )
Non-GAAP Reconciliations Q3 2013
Adjusted EBITDA
Net loss $ (1,679,343 ) Net interest expense
1,227,480 Exit or disposal activities, other 176,809 Depreciation
and amortization 2,042,082 Acquisition costs 117,480 Pre-opening
411,836 Termination/contract negotiation/property write-off costs
356,754 Share-based compensation 57,905 Lease adjustment (1,084,411
) Adjusted EBITDA* $ 1,626,592
*See accompanying disclosure regarding use
of non-GAAP financial measures.
Certain percentages may not foot due to rounding.
Non-GAAP Reconciliations Q3 2012
Results
Total for All Comparable
% of
New
% of
Restaurants
% of
Restaurants
Sales
Restaurants
Sales
As Reported
Sales
Restaurant revenues $ 28,272,244 100 % $ 2,863,044 100 % $
31,135,288 100 % Cost of sales: Food, beverage and retail
8,044,063 28.5 % 368,772 12.9 % 8,412,835 27.0 % Labor 9,948,958
35.2 % 344,184 12.0 % 10,293,142 33.1 % Direct restaurant operating
expenses 4,557,181 16.1 % 191,835 6.7 %
4,749,016 15.3 % Restaurant-level IBO* $ 5,722,042 20.2 % $
1,958,253 68.4 % $ 7,680,295 24.7 % Occupancy 2,573,685 8.3
% General and administrative 2,315,538 Pre-opening 166,582
Acquisition costs 199,560 Company-wide EBITDA*
2,424,930 7.8 % Depreciation and amortization 1,920,425 Exit
or disposal activities, other 160,936
Operating loss 343,569 Interest: Income - Expense
(1,232,515 ) Net interest expense (1,232,515 ) Net loss $
(888,946 )
Non-GAAP Reconciliations Q3 2012
Adjusted EBITDA
Net loss $ (888,946 ) Net interest expense
1,232,515 Exit or disposal activities, other 160,936 Depreciation
and amortization 1,920,425 Acquisition costs 199,560 Pre-opening
166,582 Share-based compensation 77,071 Lease adjustment (1,045,072
) Adjusted EBITDA* $ 1,823,071
*See accompanying disclosure regarding use
of non-GAAP financial measures.
Certain percentages may not foot due to rounding.
Non-GAAP Reconciliations Q3 YTD 2013
Results
Total for All Comparable
% of
New
% of
Restaurants As
% of
Restaurants
Sales
Restaurants
Sales
Reported
Sales
Restaurant revenues $ 88,416,501 100 % $ 11,856,621 100 % $
100,273,122 100 % Cost of sales: Food, beverage and retail
25,411,451 28.7 % 2,049,810 17.3 % 27,461,261 27.4 % Labor
30,148,050 34.1 % 2,481,967 20.9 % 32,630,017 32.5 % Direct
restaurant operating expenses 14,337,224 16.2 %
1,256,653 10.6 % 15,593,877 15.6 % Restaurant-level
IBO* $ 18,519,776 20.9 % $ 6,068,191 51.2 % $ 24,587,967 24.5 %
Occupancy 8,218,112 8.2 % General and administrative
7,555,994 Pre-opening 1,035,802 Acquisition costs 193,539
Company-wide EBITDA* 7,584,520 7.6 %
Depreciation and amortization 5,994,887 Exit or disposal
activities, other 509,290 Operating loss
1,080,343 Interest: Income - Expense (3,735,046 ) Net
interest expense (3,735,046 ) Net loss $ (2,654,703 )
Non-GAAP Reconciliations Q3 YTD 2013
Adjusted EBITDA
Net loss $ (2,654,703 ) Net interest expense
3,735,046 Exit or disposal activities, other 509,290 Depreciation
and amortization 5,994,887 Acquisition costs 193,539 Pre-opening
1,035,802 Termination/contract negotiation/property write-off costs
485,056 Share-based compensation 136,725 Lease adjustment
(3,313,105 ) Adjusted EBITDA* $ 6,122,537
*See accompanying disclosure regarding use
of non-GAAP financial measures.
Certain percentages may not foot due to rounding.
Non-GAAP Reconciliations Q3 YTD 2012
Results
Total for All Comparable
% of
New
% of
Restaurants
% of
Restaurants
Sales
Restaurants
Sales
As Reported
Sales
Restaurant revenues $ 85,857,268 100 % $ 4,215,642 100 % $
90,072,910 100 % Cost of sales: Food, beverage and retail
23,868,752 27.8 % 459,713 10.9 % 24,328,465 27.0 % Labor 29,295,424
34.1 % 445,561 10.6 % 29,740,985 33.0 % Direct restaurant operating
expenses 13,091,382 15.2 % 248,627 5.9 %
13,340,009 14.8 % Restaurant-level IBO* $ 19,601,710 22.8 %
$ 3,061,741 72.6 % $ 22,663,451 25.2 % Occupancy 7,351,885
8.2 % General and administrative 7,207,083 Pre-opening 915,413
Acquisition costs 684,745 Company-wide EBITDA*
6,504,325 7.2 % Depreciation and amortization 5,493,719 Exit
or disposal activities, other 417,524
Operating loss 593,082 Interest: Income 32 Expense
(3,721,455 ) Net interest expense (3,721,423 ) Net loss $
(3,128,341 )
Non-GAAP Reconciliations Q3 YTD 2012
Adjusted EBITDA
Net loss $ (3,128,341 ) Net interest expense
3,721,423 Exit or disposal activities, other 417,524 Depreciation
and amortization 5,493,719 Acquisition costs 684,745 Pre-opening
915,413 Termination/contract negotiation/property write-off costs
85,210 Share-based compensation 223,747 Lease adjustment (3,013,397
) Adjusted EBITDA* $ 5,400,043
*See accompanying disclosure regarding use
of non-GAAP financial measures.
Certain percentages may not foot due to rounding.
Granite City Food & Brewery Ltd.Robert J. Doran,
952-697-2393Chief Executive OfficerorJames G. Gilbertson,
952-215-0676Chief Financial Officer
Granite City Food and Br... (CE) (USOTC:GCFB)
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