Grill Concepts Reports Higher Revenues for 2004 First Quarter; Same
Store Sales Increase 7.8% - Earnings Impacted by Expensing of
Options - LOS ANGELES, May 26 /PRNewswire-FirstCall/ -- Grill
Concepts, Inc. (NASDAQ:GRIL) today reported growth of 11.2 percent
in consolidated revenues with a 7.8 percent increase in same store
sales for the three-month period ended March 28, 2004 as compared
to the first quarter of 2003. Consolidated revenues, including
management and license fees advanced to $13.3 million in the first
quarter of 2004 from $11.9 million in the year-earlier period.
Total systemwide sales, including all restaurants, owned, operated,
managed and licensed, rose 13.9 percent in the quarter to $19.7
million from $17.3 million in 2003. Management believes total
systemwide sales is a key measurement for assessing the current
strength of The Grill on the Alley and Daily Grill restaurant
brands against historical performance. Grill Concepts previously
announced that as a result of a recent review of its stock option
plan, a determination was made that grants under the plan require
variable accounting treatment. This accounting treatment reflects
the difference between the current market price of the company's
stock and the option's exercise price and results in an associated
non-cash charge to compensation expense. As a result of the change
in accounting treatment, the company filed an amended Form 10-K for
the period ended December 28, 2003 restating the financial results
for the 2003 full year to reflect the expensing of employee stock
options. For the 2004 first quarter, the company achieved net
income of $87,000, or $0.01 per diluted share, which includes stock
option compensation expense of $187,000. This compares with
restated net income of $342,000, or $0.06 per diluted share, a year
earlier, including stock option compensation expense of $5,000.
"From an operating perspective, we are off to a strong start in
2004," said Robert Spivak, president and chief executive officer of
Grill Concepts. "The strong revenue growth demonstrates continued
appreciation for our brand and reinforces our confidence as the
year unfolds." Same store sales for the Daily Grill restaurants
were 8.7 percent higher compared with a year ago, and The Grill on
the Alley restaurants achieved an increase of 6.1 percent in
comparable sales over the first quarter of 2003. Spivak said first
quarter revenues reflected another period of improved check
averages and increased guest counts, leading to higher weighted
average weekly sales of 6.1 percent at The Grill restaurants and
2.8 percent at Daily Grill restaurants. During the first quarter,
the company opened its fourth Daily Grill in the greater
Washington, D.C. area in the 390-room Hyatt Regency at One Bethesda
Metro Center. Recently, Grill Concepts announced plans to open a
Daily Grill restaurant in the heart of Santa Monica's entertainment
hub in the Colorado Center, a property leased and managed by
Tishman Speyer Properties, formerly known as MGM Plaza, and now
home to tenants Metro-Goldwyn-Mayer Studios, CBS Enterprises and
HBO. About Grill Concepts, Inc. Grill Concepts owns and manages
upscale casual and fine dining, full service restaurants under two
core brand names: The Grill on the Alley and Daily Grill. The
company operates 23 restaurants including four The Grill on the
Alley-branded restaurants in Beverly Hills, Hollywood, San Jose,
California, and Chicago, as well as 19 Daily Grill restaurants in
Southern and Northern California, the Washington, D.C. metropolitan
region, Houston, Texas, Portland, Oregon and Skokie, Illinois. This
news release contains forward-looking statements, which are based
on current operations, plans and expectations. Such statements
include, but are not limited to, the company's ability to continue
expanding its restaurant network, among other factors. Actual
results may differ materially from these statements due to risks
and uncertainties beyond the company's control, which are detailed
from time to time in the company's filings with the United States
Securities and Exchange Commission. GRILL CONCEPTS, INC. AND
SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited) Three Months Ended March 28, March 30, 2004 2003
(restated) Revenues: Sales $12,958,000 $11,667,000 Management and
license fees 296,000 255,000 Total revenues 13,254,000 11,922,000
Cost of sales 3,630,000 3,174,000 Gross profit 9,624,000 8,748,000
Costs and expenses: Restaurant operating expenses 7,776,000
6,997,000 Gain on disposal of assets -- (12,000) General and
administrative 1,227,000 910,000 Depreciation and amortization
386,000 432,000 Pre-opening costs 147,000 187,000 Total operating
expenses 9,536,000 8,514,000 Income from operations 88,000 234,000
Interest expense, net (34,000) (48,000) Income before provision for
income taxes, equity in loss of joint venture and minority interest
54,000 186,000 Provision for income taxes (23,000) (55,000)
Minority interest in loss of subsidiaries 60,000 216,000 Equity in
loss of joint venture (4,000) (5,000) Net income $87,000 $342,000
Preferred dividends accrued or paid (13,000) (13,000) Net income
applicable to common stockholders $74,000 $329,000 Net income per
share Basic $0.01 $0.06 Diluted $0.01 $0.06 Weighted average shares
outstanding Basic 5,545,864 5,537,071 Diluted 6,192,910 5,537,071
Note: The consolidated financial statement for the three months
ended March 30, 2003 have been restated from those originally
issued by the company to reflect the accounting for employee stock
options using variable accounting treatment. GRILL CONCEPTS, INC.
AND SUBSIDIARIES RECONCILIATION OF NON-U.S. GAAP MEASURES TO U.S.
GAAP (unaudited) Systemwide Sales The following table reconciles
Grill Concepts' total consolidated revenues, prepared on the basis
of GAAP, to total systemwide sales for the periods presented: Three
Months Ended March 28, March 30, 2004 2003 Total consolidated
revenues $13,254,000 $11,922,000 Managed restaurants sales
4,572,000 3,302,000 Licensed restaurants sales 2,142,000 2,295,000
Less management and license fees (296,000) (255,000) Total
systemwide sales $19,672,000 $17,264,000 DATASOURCE: Grill
Concepts, Inc. CONTACT: Daryl E. Ansel, Chief Financial Officer of
Grill Concepts, Inc., +1-310-820-5559; or Roger S. Pondel or Angie
H. Yang of PondelWilkinson Inc., +1-323-866-6004, , for Grill
Concepts, Inc. Web site: http://www.pondel.com/
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