The Steak n Shake Company Reports Fiscal First Quarter 2009 Results

The Steak n Shake Company (NYSE:SNS) announced its results for its first fiscal quarter 2009, which ended December 17, 2008.

Selected Results from Fiscal First Quarter:

-- Total revenues of $131.7 million

-- General and administrative expense reduction of 15.3% from prior year

-- Cash and cash equivalents at end of first quarter of $25.6 million

Fiscal First Quarter 2009 Results

In the first quarter of fiscal year 2009, total revenues decreased 3.5% to $131.7 million as compared to $136.4 million in the first quarter of fiscal year 2008. Net sales decreased 3.5% from $135.5 million to $130.7 million in the current quarter in part because Steak n Shake operated 20 fewer company- owned restaurants following the closure and refranchising of certain units after the same period in the previous year. In addition, same store sales decreased 1.4% compared with sales recorded during the same quarter in the prior year. The reduction in same store sales was caused in part by a decline in guest traffic of 0.9% as well as by a 0.5% contraction in the average guest check. The net loss for the first quarter of fiscal year 2009 was ($3.4 million), or ($0.12) per diluted share, contrasted to a net loss of ($1.2 million), or ($0.04) per diluted share in the first quarter of fiscal year 2008. During the first quarter of fiscal year 2009, we reduced general and administrative expenses by approximately $1.5 million as compared to the same period in the previous year. We anticipate significant additional savings throughout fiscal year 2009. As a corollary, management's intention is to strengthen further the company's balance sheet in fiscal year 2009. Cash and cash equivalents increased by $18.8 million in 2009's first quarter, of which approximately $11 million stems from income tax refunds. We own the land and buildings for 146 operating Steak n Shake restaurants and have an additional 33 properties for sale. We amended our debt facilities during the quarter, including an extension of our Revolving Credit Facility to January 30, 2010, revised financial covenants, and generated relief on the requirement to provide collateral under our Senior Note Agreement. In the current quarter, we closed one company-owned restaurant and refranchised seven company-owned restaurants to franchisees, bringing the total number of company-owned restaurants to 415 and the total number of franchised units to 75.

Management's plan is to maximize free cash flows and maintain a strong balance sheet. We are in the early stages of a turnaround. While we are pleased with our progress thus far, we will remain dissatisfied with our performance until, at a satisfactory rate, we generate increased customer traffic, and ultimately the per-share intrinsic value of the company.

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