Category: Restaurants

The Steak n Shake Company Reports Fiscal Second Quarter 2009 Results

The Steak n Shake Company (NYSE: SNS) today announced its results for its second fiscal quarter 2009, which ended April 8, 2009.

Fiscal Second Quarter 2009 Results

Net earnings for the second quarter of fiscal year 2009 were $2.3 million, or $0.08 per diluted share, contrasted to a net loss of ($2.8 million), or ($0.10) per diluted share in the second quarter of fiscal year 2008. Quarterly same-store sales increased 2.4% due to an increase in guest traffic of 7.8%, offset by a 5.4% contraction in the average guest check.

Net sales decreased 0.7% from $189.3 million to $188.0 million in the current quarter because Steak n Shake operated 21 fewer company-owned restaurants following the closure and refranchising of certain units after the same period in the previous year.

 

At the end of the second quarter, cash and cash equivalents stood at $35.0 million. The revolving line of credit and senior note balances totaled $29.0 million at the end of the quarter. Steak n Shake owns the land and buildings for 145 operating Steak n Shake restaurants and has an additional 31 properties for sale. In the current quarter, Steak n Shake operated 415 company-owned restaurants and a franchisee closed one restaurant, bringing the total number of franchised units to 74.

Management's long-term goal is to sustain increases in customer traffic along with maximizing free cash flow -- to attain its ultimate objective, maximizing the per-share intrinsic value of the company.

Fiscal Year 2009 Results (Year-to-date)

Year-to-date net loss through the second quarter of fiscal year 2009 was ($1.2 million), or $(0.04) per diluted share, contrasted to a net loss of ($4.0 million), or ($0.14) per diluted share for the same period a year ago. Year-to-date same-store sales increased 0.9%. Net sales decreased 1.9% from $324.8 million to $318.7 million in the current year because Steak n Shake operated fewer company-owned restaurants following the closure and refranchising of certain units after the same period in the previous year.

Annual Meeting of Shareholders

 

The company plans to communicate the aforementioned information with shareholders today at its Annual Meeting of Shareholders at 1:30 p.m. E.S.T. The meeting will take place in the Vienna Ballroom at the Conrad Hotel, 50 West Washington Street, Indianapolis, Indiana.

 

About Steak n Shake

 

Steak n Shake, founded in 1934, is a classic American brand, serving premium burgers and milkshakes through its chain of 489 restaurants.

 

Risks Associated with Forward-Looking Statements

 

This news release may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These statements which may concern anticipated future results are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ markedly from those projected or discussed here. Steak n Shake cautions readers not to place undue reliance upon any such forward-looking statements, for actual results may differ materially from expectations. Steak n Shake does not undertake to publicly update or revise any forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Further information on the types of factors that could affect Steak n Shake and its business can be found in the company's filings with the SEC.

 

 

    Condensed Consolidated Statements of Operations
    -----------------------------------------------
    The Steak n Shake Company
    (Amounts in $000s except share and per share data)

                             Sixteen Weeks Ended     Twenty-Eight Weeks Ended
                             -------------------     ------------------------
                            April 8,     April 9,     April 8,     April 9,
                              2009         2008         2009         2008
                           (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)
                           -----------  -----------  -----------  -----------
    Revenues:
    Net sales                $187,975     $189,272     $318,694     $324,768
    Franchise fees              1,054        1,215        2,012        2,115
                                -----        -----        -----        -----
    Total revenues            189,029      190,487      320,706      326,883

    Costs and Expenses:
    Cost of sales              45,611       47,447       77,642       80,131
    Restaurant operating
     costs                    101,526      104,039      176,208      179,849
    General and
     administrative            10,799       14,072       19,444       24,490
    Depreciation and
     amortization               9,537       10,455       16,929       18,113
    Marketing                   9,873       10,376       17,416       16,377
    Interest                    4,049        4,240        7,651        7,553
    Rent                        4,659        4,520        8,224        7,728
    Pre-opening costs               -          677            -        1,131
    Asset impairments
     and provision for
     restaurant closing           741            -          917            -
    Loss (gain) on
     disposal of property          47          297          (12)          13
    Other income, net            (419)        (524)        (338)        (975)
                                 ----         ----         ----         ----
    Total costs and
     expenses                 186,423      195,599      324,081      334,410
                              -------      -------      -------      -------

    Earnings (Loss)
     Before Income Taxes        2,606       (5,112)      (3,375)      (7,527)

    Income Taxes                  353       (2,302)      (2,188)      (3,530)

                               ------      -------      -------      -------
    Net Earnings (Loss)        $2,253      $(2,810)     $(1,187)     $(3,997)
                               ======      =======      =======      =======


    Basic Earnings
     (Loss) Per Common
     and Common Equivalent
     Share                      $0.08       $(0.10)      $(0.04)      $(0.14)

    Diluted Earnings
     (Loss) Per Common and
     Common Equivalent
     Share                      $0.08       $(0.10)      $(0.04)      $(0.14)

    Weighted Average
     Shares and
     Equivalents:
    Basic                  28,478,365   28,269,538   28,402,685   28,221,692
    Diluted                28,554,395   28,269,538   28,402,685   28,221,692



    Condensed Consolidated Statements of Financial Position
    ----------------------------------------------
    The Steak n Shake Company
    (Amounts in $000s except share and per share data)

                                        April 8,          September 24,
                                          2009                2008
                                      (Unaudited)          (Unaudited)
                                       -----------         -----------
    Assets:
    Current Assets
    Cash and cash equivalents           $35,010             $6,855
    Receivables, net                      6,110             15,622
    Inventories                           7,302              6,795
    Deferred income taxes                 2,902              3,260
    Assets held for sale                 21,055             25,395
    Other current assets                  4,581             3,009
                                          -----              -----
    Total current assets                 76,960             60,936
    Net property and equipment          413,045            432,690
    Goodwill                             14,503             14,503
    Other intangible assets, net          1,660              1,765
    Other assets                          7,673             10,242
                                          -----             ------
    Total assets                       $513,841           $520,136
                                       ========           ========

    Liabilities and Shareholders' Equity:
    Current Liabilities
    Accounts payable                    $22,667            $25,302
    Accrued expenses                     31,515             31,685
    Current portion of long-term debt     5,732                733
    Line of credit                       17,000             14,180
    Current portion of obligations under
     leases                               4,452              4,417
                                          -----              -----
    Total current liabilities            81,366             76,317
    Deferred income taxes                 3,599              2,209
    Other long-term liabilities           6,657              7,439
    Obligations under leases            131,634            134,809
    Long-term debt                        6,302             15,783

    Commitments and Contingencies
    Shareholders' Equity:
    Common stock - $0.50 stated value,
     50,000,000 shares authorized -
     shares issued: 30,332,839           15,166             15,166
    Additional paid-in capital          128,779            128,526
    Retained earnings                   160,546            161,733
    Treasury stock - at cost:
     1,549,517 shares as of April 8,
     2009; 1,760,531 shares as of
     September 24, 2008                 (20,208)           (21,846)
                                        -------            -------
    Total shareholders' equity          284,283            283,579
                                        -------            -------
    Total liabilities and shareholders'
     equity                            $513,841           $520,136
                                       ========           ========



    Condensed Consolidated Statements of Cash Flows
    ------------------------------------------------
    The Steak n Shake Company
    (Amounts in $000s)
                                             Twenty-Eight Weeks Ended
                                             ------------------------
                                             April 8,          April 9,
                                               2009              2008
                                            (Unaudited)       (Unaudited)
                                            -----------       -----------
    Operating Activities:
    Net loss                                 $(1,187)          $(3,997)
    Adjustments to reconcile net loss to
     net cash provided by operating
     activities:
    Depreciation and amortization             16,929            18,113
    Provision for deferred income taxes        1,748               257
    Asset impairments and provision for
     restaurant closing                          917                 -
    Non-cash expense for stock-based
     compensation and deferred rent            1,942             1,584
    (Gain) loss on disposal of property          (12)               13
    Changes in receivables and inventories     9,312             1,515
    Changes in other assets                   (2,098)           (2,354)
    Changes in accounts payable and accrued
     expenses                                 (1,748)           (1,244)
                                              ------            ------
    Net cash provided by operating
    activities                                25,803            13,887
                                              ------            ------

    Investing Activities:
    Additions of property and equipment       (2,612)          (23,858)
    Proceeds from property and equipment
     disposals                                 6,590             9,872
                                               -----             -----
    Net cash provided by (used in) investing
     activities                                3,978           (13,986)
                                               -----           -------

    Financing Activities:
    Net proceeds from line of credit facility  2,820             2,355
    Principal payments on long-term debt      (4,482)           (1,055)
    Proceeds from equipment and property
     sale-leasebacks                           2,005                 -
    Principal payments on direct financing
     lease obligations                        (2,407)           (2,272)
    Proceeds from exercise of stock options        -               140
    Excess tax benefits from stock-based
     awards                                        -                10
    Repurchase of employee shares for tax
     withholding                                (128)                -
    Proceeds from employee stock purchase
     plan                                        566             1,004
                                                 ---             -----
    Net cash (used in) provided by financing
     activities                               (1,626)              182
                                              ------               ---

    Increase in Cash and Cash Equivalents     28,155                83
    Cash and Cash Equivalents at Beginning
     of Period                                 6,855             1,497
                                               -----             -----
    Cash and Cash Equivalents at End of
     Period                                  $35,010            $1,580
                                             =======            ======