EX-99.1 2 a4956358ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Benihana Inc. Reports Record First Fiscal Quarter Net Income MIAMI--(BUSINESS WIRE)--Aug. 22, 2005--Benihana Inc. (the "Company") (NASDAQ:BNHNA and BNHN), operator of the nation's largest chain of Japanese theme and sushi restaurants, today announced net income for the first fiscal quarter (16 weeks) ended July 17, 2005 of $4.5 million, or $0.44 per diluted share, compared with $1.9 million, or $0.20 per diluted share, in the corresponding year-ago period. Total revenues increased by 13%, to $74.1 million, compared with $65.4 million, a year ago. The increase in net earnings reflects strong company-wide comparable sales and lower commodity prices, particularly for beef and shrimp. Sales benefited from an average of 2.5% to 3% menu price increase instituted in the second fiscal quarter last year at the teppanyaki restaurants, which account for approximately 78.5% of total revenues. The teppanyaki restaurants experienced an 8.5% increase in comparable sales with a 4.7% increase in comparable restaurant guest count, while RA Sushi comparable sales increased by 25.0%, on a 22.2% increase in comparable restaurant traffic. Haru comparable sales rose 0.5% while comparable guest count for Haru restaurants decreased 3.2%. Total guest count at the teppanyaki restaurants increased by 6.4% to 2.4 million customers, Haru's total guest count increased by 15.7% to 183,000, and RA Sushi's total guest count increased by 41.0% to 350,000. Restaurant operating profits ("ROP") increased by 42.9%, to $13.4 million, with ROP margins advancing to 18.2%, compared with 14.4% in the corresponding year-ago first fiscal quarter, a 380 basis point improvement. Gross profit increased by 16.8%, to $55.7 million, representing a gross profit margin on restaurant food and beverage sales of 75.6%, compared to 73.4% in the corresponding year-ago first fiscal quarter. Restaurant operating expenses expressed as a percentage of restaurant sales declined to 57.4%, from 59.0% a year ago, as productivity (measured as a percentage of customers per labor hour) increased at both the teppanyaki and RA Sushi chains. "We are obviously pleased with the results for the first fiscal quarter," said Joel A. Schwartz, President and CEO. "The increases in guest counts in all of our restaurant concepts underscore the strength of our Company's brands and the popularity of our four restaurant concepts. We anticipate fiscal 2006 will be a strong, highly satisfactory year of growth." In the first fiscal quarter, the Company opened its newest Haru location in the Old Town area of Philadelphia, marking the chain's first restaurant outside of New York City. Under development, and expected to be opened this fiscal year, are new Benihana teppanyaki restaurants in Coral Gables and Miramar, Florida, the first to incorporate a new prototype design. New RA Sushi units in Palm Beach Gardens, Florida; Huntington Beach, California; Glenview, Illinois, a suburb of Chicago; Houston, Texas and Tustin, California, near Newport Beach, California are also under development. Fiscal 2006 Second Quarter Outlook Comparable sales in the fiscal 2006 second quarter, which are anticipated to increase 4% to 5% compared to the corresponding year-ago quarter, will be affected by the menu price increases made in the second quarter of fiscal 2005. Total sales are expected to increase by a similar percentage with eight to eleven store weeks lost to remodeling projects during the quarter. The Short Hills, New Jersey Benihana restaurant will begin a remodeling project during the second fiscal 2006 quarter incorporating most of the design elements of our new prototype and is expected to remain closed until late in the fiscal year. Per diluted share, net income is currently estimated to be $0.20 to $0.22 per share after considering the dilutive effect that the issuance of the convertible preferred stock and the impact that the recent increase in the stock price have had on common shares and equivalents outstanding. About Benihana Benihana, now in its 41st year and operator of the nation's largest chain of Japanese and sushi theme restaurants, currently operates 72 restaurants nationwide, including 56 Benihana teppanyaki restaurants, seven Haru sushi restaurants, eight RA Sushi Bar Restaurants and one Doraku restaurant. Under development at present are seven restaurants - two Benihana teppanyaki restaurants and five RA Sushi restaurants. In addition, a total of 21 franchised Benihana teppanyaki restaurants are now open or under development in the U.S. and Latin America. Statements in this press release concerning the Company's business outlook or future economic performance, anticipated profitability, revenues, expenses or other financial items, together with other statements that are not historical facts, are "forward-looking statements" as that term is defined under Federal Securities Laws. "Forward-looking statements" are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. Such risks, uncertainties and factors include, but are not limited to, changes in customers' tastes and preferences, acceptance of the Company's concepts in new locations, obtaining qualified personnel, industry cyclicality, fluctuations in customer demand, the seasonal nature of the business, fluctuations of commodities costs, the ability to complete construction of new units in a timely manner, obtaining governmental permits on a reasonably timely basis, the outcome of litigation including the litigation commenced by Benihana of Tokyo, Inc. and general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission. The Company disclaims any obligations to update any forward-looking statement as a result of developments occurring after the date of this press release, including the litigation commenced by Benihana of Tokyo, Inc. Conference Call Scheduled A conference call conducted by Benihana Inc. management will take place on Monday, August 22, 2005, at 11:00 A.M (ET). You may listen over the Internet at http://www.benihana.com. To listen to the live call on the Internet, please go to the web site at least 15 minutes early to register, download and install any necessary audio software. A replay will be available two hours after the end of the live call, through midnight September 5, 2005. For replay, dial 877-519-4471 and use PIN number 6354072. Benihana Inc. and Subsidiaries Condensed Consolidated Statements of Earnings (Unaudited) (in thousands except per share data) Four Periods Ended ----------------- July 17, July 18, 2005 2004 $Change % Change -------- -------- -------- --------- Revenues Restaurant sales $73,617 $64,934 $8,683 13.4% Franchise fees and royalties 448 457 (9) (2.0) -------- -------- -------- --------- Total revenues 74,065 65,391 8,674 13.3 -------- -------- -------- --------- Costs and Expenses Cost of food and beverage sales 17,956 17,279 677 3.9 Restaurant operating expenses 42,271 38,283 3,988 10.4 Restaurant opening costs 289 254 35 13.8 Marketing, general and administrative expenses 6,256 6,331 (75) (1.2) -------- -------- -------- --------- Total operating expenses 66,772 62,147 4,625 7.4 -------- -------- -------- --------- Earnings from operations 7,293 3,244 4,049 124.8 Interest expense, net 117 114 3 2.6 -------- -------- -------- --------- Earnings before income taxes and minority interest 7,176 3,130 4,046 129.3 Income tax provision 2,500 1,006 1,494 148.5 -------- -------- -------- --------- Earnings before minority interest 4,676 2,124 2,552 120.2 Minority interest 178 212 (34) (16.0) -------- -------- -------- --------- Net income 4,498 1,912 2,586 135.3 Less: accretion of issuance costs and preferred stock dividends 177 26 151 580.8 -------- -------- -------- --------- Net income attributable to common stockholders $4,321 $1,886 $2,435 129.1% ======== ======== ======== ========= Earnings Per Share Basic earnings per share $0.47 $0.21 $0.26 123.8% ======== ======== ======== ========= Diluted earnings per share $0.44 $0.20 $0.24 120.0% ======== ======== ======== ========= Weighted Average Shares Outstanding Basic 9,224 9,133 91 1.0% ======== ======== ======== ========= Diluted 10,319 9,775 544 5.6% ======== ======== ======== ========= Benihana Inc. and Subsidiaries Sales by Concept (Unaudited) (in thousands) Four Periods Ended ----------------- July 17, July 18, 2005 2004 $Change % Change -------- -------- -------- --------- Total restaurant sales by concept: Benihana $57,789 $52,481 $5,308 10.1% Haru 8,234 7,100 1,134 16.0 RA Sushi 7,037 4,901 2,136 43.6 Sushi Doraku 557 452 105 23.2 -------- -------- -------- --------- Total restaurant sales $73,617 $64,934 $8,683 13.4% ======== ======== ======== ========= Comparable restaurant sales by concept: Benihana $55,444 $51,089 $4,355 8.5% Haru 7,132 7,100 32 0.5 RA Sushi 6,126 4,901 1,225 25.0 Sushi Doraku 557 452 105 23.2 -------- -------- -------- --------- Total comparable restaurant sales $69,259 $63,542 $5,717 9.0% ======== ======== ======== ========= Benihana Inc. and Subsidiaries Restaurant Operating Profit (Unaudited) (in thousands) Four Periods Ended ----------------- July 17, July 18, 2005 2004 $Change % Change -------- -------- -------- --------- Restaurant sales $73,617 $64,934 $8,683 13.4% Cost of food & beverage sales 17,956 17,279 677 3.9 -------- -------- -------- --------- Gross profit 55,661 47,655 8,006 16.8 -------- -------- -------- --------- Restaurant operating expenses: Labor and related costs 25,294 23,150 2,144 9.3 Restaurant supplies 1,448 1,249 199 15.9 Credit card discounts 1,336 1,153 183 15.9 Utilities 1,772 1,558 214 13.7 Occupancy costs 4,384 3,850 534 13.9 Depreciation and amortization 3,148 2,782 366 13.2 Other restaurant operating expenses 4,889 4,541 348 7.7 -------- -------- -------- --------- Total restaurant operating expenses 42,271 38,283 3,988 10.4 -------- -------- -------- --------- Restaurant operating profit $13,390 $9,372 $4,018 42.9% ======== ======== ======== ========= Benihana Inc. and Subsidiaries Restaurant Operating Margins (Unaudited) Four Periods Ended ------------------------------- July 17, 2005 July 18, 2004 --------------- --------------- Restaurant sales 100.00% 100.00% Cost of food and beverage sales 24.39 26.61 --------------- --------------- Gross profit margin 75.61 73.39 --------------- --------------- Restaurant operating expenses: Labor and related costs 34.36 35.65 Restaurant supplies 1.97 1.92 Credit card discounts 1.81 1.78 Utilities 2.41 2.40 Occupancy costs 5.96 5.93 Depreciation and amortization 4.28 4.28 Other restaurant operating expenses 6.63 7.00 --------------- --------------- Total restaurant operating expenses 57.42 58.96 --------------- --------------- Restaurant operating profit margin 18.19% 14.43% =============== =============== Benihana Inc. and Subsidiaries Balance Sheet Data (Unaudited) (in thousands) July 17, 2005 March 27, 2005 -------------- -------------- Assets Cash and cash equivalents $6,095 $3,278 Other current assets 9,795 9,625 -------------- -------------- Total current assets 15,890 12,903 Property and equipment, net 109,926 108,132 Goodwill 28,131 28,131 Other assets 5,130 5,088 -------------- -------------- $159,077 $154,254 ============== ============== Liabilities and Stockholders' Equity Current maturity of bank debt $3,333 $3,333 Current maturity of capital leases 2 26 Other current liabilities 23,716 23,082 -------------- -------------- Total current liabilities 27,051 26,441 Long-term debt--bank 5,000 6,667 Other liabilities 7,086 6,635 -------------- -------------- Total liabilities 39,137 39,743 Minority interest 2,177 1,999 Convertible preferred stock 9,328 9,305 Total stockholders' equity 108,435 103,207 -------------- -------------- $159,077 $154,254 ============== ============== CONTACT: Benihana Inc. Joel A. Schwartz or Michael R. Burris, 305-593-0770 or Corporate Relations: Anreder & Company Steven Anreder, 212-532-3232