Morton's Restaurant Group, Inc. Reports Results For First Quarter 2009

Morton's Restaurant Group, Inc. (NYSE:MRT) today reported unaudited financial results for its fiscal 2009 first quarter ended April 5, 2009.

The three month period ended April 5, 2009 as compared to the three month period ended March 30, 2008 (13 weeks to 13 weeks)

- Revenues decreased 19.7% to $75.9 million.

- Comparable restaurant revenues for Morton's steakhouses decreased 24.1% for the first quarter of fiscal 2009 ended April 5, 2009.

- The decrease in revenues is primarily attributable to the decrease in comparable restaurant revenues. A portion of the decrease was offset by an increase in revenues from four new Morton's steakhouses which opened during fiscal 2008 and one new Morton's steakhouse which opened during the first quarter of fiscal 2009.

- The first quarter of fiscal 2009 included two unusual items:

- The Company incurred a charge of $0.2 million pre-tax and $0.1 million after-tax, or $0.01 per diluted share, for the partial write-off of deferred financing costs related to the amendment of the Company's senior revolving credit facility that was executed on March 4, 2009, pursuant to which the credit facility was reduced from $115.0 million to $75.0 million, with a further reduction to $70.0 million effective December 31, 2009.

- The Company's effective tax rate for the first quarter of fiscal 2009 was negatively impacted by a non-cash charge of $0.7 million, or $0.04 per diluted share, related to the tax treatment of the vesting of certain restricted stock awards as a result of SFAS No. 123R, compared to a non-cash charge of $0.3 million, or $0.02 per diluted share, incurred in the first quarter of fiscal 2008.

- Including these unusual items, the Company's GAAP net loss was $(1.8) million, or $(0.11) per diluted share, for the three month period ended April 5, 2009 compared to net income of $2.4 million, or $0.14 per diluted share, for the three month period ended March 30, 2008.

- Excluding these unusual items, the Company's adjusted net loss was $(1.0) million, or $(0.06) per diluted share, for the three month period ended April 5, 2009 compared to an adjusted net income of $2.6 million, or $0.16 per diluted share, for the three month period ended March 30, 2008. (Please refer to the reconciliation of adjusted net (loss) income to GAAP net (loss) income in the financial tables that follow.)

As previously reported, Morton's revenues and results have been pressured by the continuing global recession, which has impacted guest traffic throughout the industry. Negative comparable restaurant revenues adversely impacted earnings due to the deleveraging on the fixed cost base.

"The economic slowdown in the United States and around the world represents a challenging environment for the entire hospitality industry. The recession affects convention business, hotel occupancy and air travel, which all have a direct correlation on our business at Morton's," said Thomas J. Baldwin, Chairman and Chief Executive Officer of Morton's Restaurant Group, Inc. "While we are operating in this challenging environment for the hospitality industry due to the continuing global recession, we believe that Morton's, with our uncompromising commitment to quality and our strong Morton's brand, is well positioned for long-term growth when the economy improves. Difficult economic cycles are a fact of life, and we have managed through several over the past few decades. Our Company is working to meet the current challenge head on. For the long term, we believe the best is yet to come as Morton's offers 'The Best Steak Anywhere,' the best service and the best people in the fine dining steakhouse segment."

Restaurant Development

On March 3, 2009, the Company opened a Morton's steakhouse in Mexico City, Mexico (through a joint venture). The Company has entered into leases to open new Morton's steakhouses in Dallas, TX, Indian Wells, CA, and Miami Beach, FL.

Second Quarter Fiscal 2009 and Revised Full Year Fiscal 2009 Financial Guidance

The current economic environment significantly increases the inherent uncertainty of guidance. Actual results could differ materially from the guidance provided herein as a result of numerous factors, many of which are beyond the Company's control and are highly dependent upon overall economic conditions. In particular, a further decrease in consumer and/or business spending in one or more of the geographic areas in which the Company operates could cause actual results to differ materially from the Company's guidance. Refer to "Cautionary Note on Forward-Looking Statements" later in this press release.

The Company currently expects second quarter of fiscal 2009 revenues to range between $74.0 million and $76.0 million, including decreases in comparable restaurant revenues for Morton's steakhouses of approximately 20% to 22% as compared to the second quarter of fiscal 2008. Second quarter diluted net income per share is expected to approximate $0.04 to $0.07. This range assumes an expected effective income tax rate for the second quarter of fiscal 2009 not exceeding 14%.

The Company revised its fiscal 2009 guidance and now expects fiscal year 2009 revenues to range between $316.0 million and $325.0 million, which reflect a decrease in comparable restaurant revenues for Morton's steakhouses of approximately 13% to 16% as compared to fiscal 2008. The Company's guidance has been revised to reflect the belief that it is not likely that the current adverse economic conditions, and their effect on the restaurant industry, will improve significantly in the near term. The Company's revenue guidance takes into account a 52 week year for fiscal 2009 compared to a 53 week year for fiscal 2008. Furthermore, fiscal 2009 will include revenue from one New Year's Eve (December 31, 2009) whereas fiscal 2008 included revenue from two New Year's Eves (December 31, 2007 in the first quarter and December 31, 2008 in the fourth quarter). Diluted net income per share for fiscal 2009 is expected to approximate $0.14 to $0.19. This range includes the full year impact of the additional interest expense of approximately $0.7 million, or $0.04 per diluted share, and the partial write-off of deferred financing costs of $0.2 million recorded during the first quarter of fiscal 2009, both of which relate to the amendment of the Company's senior revolving credit facility that was executed on March 4, 2009. This range also assumes an expected effective income tax rate not exceeding 14% and the negative impact of the fiscal 2009 first quarter non-cash charge of $0.7 million, or $0.04 per diluted share, related to the tax treatment of the vesting of certain restricted stock awards. During fiscal 2009, the Company opened a Morton's steakhouse in Mexico City and expects to open one additional Morton's steakhouse, which will include a Bar 12-21 and a new temperature controlled display wine room. In addition, during fiscal 2009, the Company has retrofit one Morton's steakhouse to include Bar 12-21.

Logos, product and company names mentioned are the property of their respective owners.

Reader Comments:

Be the first to leave a comment for this article

Tweet