McCormick & Schmick's Seafood Restaurants, Inc. Reports Third Quarter 2009 Financial Results

McCormick & Schmick's Seafood Restaurants, Inc. (Nasdaq: MSSR) today reported financial results for its third quarter ended September 26, 2009.

Financial results for the third quarter 2009 compared to the third quarter 2008:

• Revenues decreased 13.6% to $86.3 million from $99.9 million

• Comparable restaurant sales decreased 18.8%

• Comparable restaurant traffic decreased 14.2%

• Total operating expenses were 87.1% of revenues compared to 87.5% last year

• Net income of $1.3 million, or $0.09 per diluted share, compared to net income of $1.4 million, or $0.09 per diluted share

Revenues for the third quarter of 2009 decreased 13.6% to $86.3 million from $99.9 million in the third quarter of 2008. The decrease in revenues is primarily attributable to the decline in comparable restaurant sales, partially offset by revenue from new restaurants not in the comparable restaurant base. The decrease in comparable restaurant sales of 18.8% was a result of a 14.2% decrease in traffic, which was coupled with a decrease in net pricing and product mix of 4.6%.

Bill Freeman, Chief Executive Officer, said, 'The third quarter continued to be a challenging economic environment. I am pleased with our team's ability to adapt to the ever-changing economic pressures while balancing our commitment to providing an exceptional guest experience with continued prudent cost management. We continue to focus our plans on delivering programs and choices that reflect our sensitivity to the financial pressures on our guests by offering great value on our menu every day coupled with the exceptional service our guests have come to expect.'

Outlook

Based upon the Company's revenue performance through the first nine months of 2009 and expectations for the fourth quarter, the Company has revised its annual revenue guidance to $360.0 million to $365.0 million, compared to its previous expectations of approximately $370.0 million. The Company has reaffirmed its annual earnings guidance of $0.25-$0.30 per fully diluted share.

The Company expects its annualized effective tax rate to be between 5% and 10% due to its projection of modest taxable income for the year in certain taxing jurisdictions and an insignificant change in net deferred tax assets.

The Company's 2009 guidance also includes capital expenditures of approximately $8.0 million, depreciation and amortization of approximately $17.0 million, and general and administrative expenses of approximately $21.0 million. The Company also anticipates a year-end balance on its credit facility of between $8.0 and $12.0 million.

The Company has completed its 2009 development schedule, and opened both of the 2009 planned restaurants earlier this year. In 2010, the Company expects to open a total of three restaurants: West Palm Beach, Florida in the first quarter; Houston, Texas in the second quarter; and Richmond, Virginia late in fiscal 2010.

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