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Revenues Increase 51.1%, Comparable Sales Up 5.4%
MINNEAPOLIS, May 12, 2006 - Granite City Food & Brewery Ltd. (Nasdaq Capital Market: GCFB) today reported the results of operations for the first quarter ended March 28, 2006.
For the quarter ended March 28, 2006, total revenue was $11,892,319 compared to $7,870,335 for the first quarter of 2005, an increase of 51.1%. Comparable restaurant sales increased 5.4% in the first quarter of 2006 over the first quarter of 2005. The Company reported a net loss of ($1,646,040), or ($0.12) per share, for the quarter ended March 28, 2006, compared to a net loss of ($382,654), or ($0.03) per share, for the first quarter of 2005. Restaurant-level EBITDA* for all restaurants was $1,835,384, or 15.4% of sales.
Commenting on comparable restaurant sales, Steve Wagenheim, Granite City Food & Brewery's President and Chief Executive Officer stated, "The first quarter of 2006 is an important milestone for our Company in terms of providing meaningful information on our comparable restaurant sales. In the first quarter of 2005 we had only three restaurants in our comparable restaurant base which consists of restaurants that have been open for at least eighteen months. With the first quarter of 2006, we now have eight restaurants in our comparable restaurant base and as such, we are very excited about the strong 5.4% increase in our comparable restaurant sales. We anticipate we will continue to build on this sales performance as we enter our patio season and enjoy the revenues that come with additional seating during the warmer months."
"Our net loss in the first quarter was due primarily to the pre-opening costs we incurred for the two additional restaurants we opened in the Kansas City market as we continued our restaurant expansion plans, as well as the increased general and administrative expenses we have incurred as a result of building our corporate infrastructure over the last year," said Wagenheim. "We will continue to incur significant pre-opening costs during the year as we pursue our growth plans which currently include opening an additional five restaurants this year. Additionally, we would expect our general and administrative expenses to decrease as a percentage of revenues as we grow our restaurant count and our sales increase,"added Wagenheim.
"We are pleased with the initial performance of the two restaurants we added in the Kansas City market during the first quarter," added Wagenheim. "These restaurants have opened up with solid sales and speak well for the portability of our concept to larger metropolitan markets. We look forward to the restaurant-level EBITDA* performance of these new restaurants to settle in at an attractive level in the next few months as the new management teams become familiar with their restaurants." Commenting on restaurant-level performance for those restaurants that are in the comparable restaurant base, Wagenheim stated, "We were also pleased with the 17.9% restaurant-level EBITDA performance from our mature prototype restaurants - restaurants 4 through 8 - which were built on our prototype model and represent the format that we are currently building."
Granite City Food & Brewery Ltd. currently operates 13 Granite City Food & Brewery casual dining restaurants featuring made-from-scratch food and handcrafted beers. Its broad menu offers traditional and regional foods served in generous portions at reasonable prices, affording guests an excellent value and great dining experience. Its first Granite City opened in St. Cloud, MN in June 1999. Subsequently, the company opened restaurants in Sioux Falls, SD, Fargo, ND, Des Moines, Cedar Rapids and Davenport, IA, Lincoln, NE, Maple Grove and Eagan, MN, Wichita, Kansas City and Olathe, KS, and Kansas City, MO.
*See Non-GAAP Reconciliations attached to this release.
Safe Harbor and Non-GAAP Financial Measurements
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, our ability to implement and execute Fermentus Interruptus and the risks and uncertainties described in our Annual Report on Form 10-KSB for the fiscal year ended December 27, 2005, filed with the Securities and Exchange Commission on March 27, 2006.
Finally, this press release contains certain non-GAAP financial measures, including references to company-wide EBITDA and restaurant-level EBITDA. As compared to the nearest GAAP measurement for our company, company-wide EBITDA represents net loss with the add-back of net interest expense, income tax expense and depreciation and amortization. As compared to the nearest GAAP measurement for our company, restaurant-level EBITDA represents net loss with the add-back of net interest expense, income tax expense, depreciation and amortization, general and administrative expenses, and pre-opening costs. Alternatively, restaurant-level EBITDA can be calculated as restaurant revenues less all restaurant-level cost of sales. We use company-wide and restaurant-level EBITDA, as well as EBITDA as a percentage of revenue, as internal measurements of both company-wide performance and restaurant-level operating performance. Company-wide EBITDA and restaurant-level EBITDA as we define them may not be comparable to similar measurements used by other companies and are not measures of performance or liquidity presented in accordance with GAAP. These non-GAAP measurements should not be used as a substitute for net loss, net cash provided by or used in operations or other financial data prepared in accordance with GAAP. A reconciliation of company-wide EBITDA and restaurant-level EBITDA to our net loss for the quarter ended March 28, 2006 is provided herein. Furthermore, 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 our early stage restaurants (meaning our first through third locations), mature restaurants open more than one year (meaning our fourth through eighth locations), and new restaurants open less than one year (meaning our ninth through thirteenth locations). Finally, comparable restaurants are those restaurants that have been open for 18 months or more. For the quarter ended March 28, 2006 our comparable restaurants consisted of our first eight locations, that is, our early stage and mature restaurants, while our non-comparable restaurants consisted of our ninth through thirteenth restaurants. The contributions of these groups of restaurants to company-wide performance are set forth herein.
GRANITE CITY FOOD & BREWERY LTD. CONDENSED STATEMENTS OF OPERATIONS
| |
Thirteen Weeks Ended |
| |
March 28, 2006 |
|
March 29, 2005 |
| Restaurant Revenues |
$11,892,319 |
100.0% |
|
$7,870,335 |
100.0% |
| |
| Cost of Sales: |
|
Food, beverage,
& retail |
3,514,935 |
29.6% |
|
2,355,388 |
29.9% |
| Labor |
4,161,563 |
35.0% |
|
2,713,753 |
34.5% |
| Direct restaurant operating |
1,698,782 |
14.3% |
|
1,046,637 |
13.3% |
| Occupancy |
681,655 |
5.7% |
|
436,178 |
5.5% |
Total Cost
of Sales |
10,056,935 |
84.6% |
|
6,551,956 |
83.2% |
| |
| Pre-opening |
811,802 |
6.8% |
|
7,713 |
0.1% |
| General & Administrative |
1,455,060 |
12.2% |
|
952,353 |
12.1% |
| Depreciation & amortization |
752,456 |
6.3% |
|
444,396 |
5.6% |
| |
| Operating loss |
(1,183,934) |
-10.0% |
|
(86,083) |
-1.1% |
| |
| Interest: |
|
| Income |
32,050 |
0.3% |
|
38,261 |
0.5% |
| Expense |
(498,029) |
-4.2% |
|
(323,989) |
-4.1% |
| Other income (expense), net |
3,873 |
0.0% |
|
(10,843) |
-0.1% |
| Net Other Expense |
(462,106) |
-3.9% |
|
(296,571) |
-3.8% |
| |
| Net loss |
$(1,646,040) |
-13.8% |
|
$(382,654) |
-4.9% |
| Loss per common share, basic and diluted |
$(0.12) |
- |
|
$(0.03) |
- |
| Weighted average shares outstanding, basic and diluted |
$13,226,526 |
- |
|
$11,614,276 |
- |
BALANCE SHEET DATA At:
| |
March 28, 2006 |
|
December 27, 2005 |
| Cash |
$6,312,647 |
|
$9,836,231 |
| Current assets including cash |
$6,786,500 |
|
$10,298,371 |
| Total assets |
$48,989,411 |
|
$44,482,590 |
| Current liabilities |
$6,253,770 |
|
$5,161,814 |
| Total liabilities |
$33,106,023 |
|
$27,129,082 |
| Shareholders' equity |
$15,883,388 |
|
$17,353,508 |
GRANITE CITY FOOD & BREWERY LTD. NON-GAAP RECONCILIATIONS 2006 Q1 RESULTS
| |
Early Stage Restaurants (#s 1-3) |
% of sales |
Mature Restaurants (#s 4-8) |
% of sales |
Subtotal for Comparable Restaurants (#s 1-8) |
% of sales |
New Units |
% of sales |
Mature Units |
% of sales |
| Restaurant Revenues |
$2,831,765 |
100% |
$5,462,604 |
100% |
8,294,369 |
100% |
$3,597,950 |
100% |
$11,892,319 |
100% |
| |
| Cost of Sales: |
|
Food, beverage,
& retail |
832,62 |
29.4% |
1,599,976 |
29.3% |
2,432,597 |
29.3% |
1,082,338 |
30.1% |
3,514,935 |
29.6% |
| Labor |
972,762 |
34.4% |
1,855,105 |
34.0% |
2,827,867 |
34.1% |
1,333,696 |
37.1% |
4,161,563 |
35.0% |
| Direct Restaurant Operating Expenses |
455,640 |
16.1% |
737,490 |
13.5% |
1,193,130 |
14.4% |
505,652 |
14.1% |
1,698,782 |
14.3% |
| Occupancy |
164,216 |
5.8% |
294,153 |
5.4% |
458,369 |
5.5% |
223,286 |
6.2% |
681,655 |
5.7% |
| Total Cost |
2,425,239 |
85.6% |
4,486,724 |
82.1% |
6,911,963 |
83.3% |
3,144,972 |
87.4% |
10,056,935 |
84.6% |
| |
| Restaurant EBITDA* |
$406,526 |
14.4% |
$975,880 |
17.9% |
$1,382.406 |
16.7% |
$452,978 |
12.6% |
$1,835,384 |
15.4% |
| Pre-opening |
|
|
|
|
|
|
|
|
811,802 |
|
| General & Administrative |
|
|
|
|
|
|
|
|
1,455,060 |
|
| |
| Company-wide EBITDA* |
|
|
|
|
|
|
|
|
(431,478) |
|
| |
| Depretiation and amortization |
|
|
|
|
|
|
|
|
752,456 |
|
| |
| Operating Loss |
|
|
|
|
|
|
|
|
(1,183,934) |
|
| Interest: |
|
| Income |
|
|
|
|
|
|
|
|
32,050 |
|
| Expense |
|
|
|
|
|
|
|
|
(498,029) |
|
| Other expense, net |
|
|
|
|
|
|
|
|
3,873 |
|
| Net Other Expense |
|
|
|
|
|
|
|
|
(462,106) |
|
| |
| Net loss as reported under GAAP |
|
|
|
|
|
|
|
|
(1,646,040) |
|
|
|
|
|
|
|
