Rubio's Restaurants Reports Fourth Quarter and Fiscal 2009 Results
Record Fiscal Year 2009 Revenues of $189 Million Up 5% Year-Over-Year; Record Fiscal Year 2009 Adjusted EBITDA of $13.1 Million or $1.30 per Share
Rubio's(R) Restaurants, Inc. (NASDAQ: RUBO) reported financial results for the fourth quarter and fiscal year ended December 27, 2009.
Fourth Quarter and Fiscal 2009 Financial Highlights
Revenues in the fourth quarter of 2009 totaled $45.4 million, an increase of 1% from $45.0 million reported in the same year-ago quarter. Revenue for the full year of 2009 totaled a record $188.9 million, up 5% from $179.3 million in the same year-ago period.
Net loss was $852,000 or $(0.08) per share in the fourth quarter of 2009 versus a net loss of $295,000 or $(0.03) per basic and diluted share in the same year-ago quarter. The fourth quarter of 2009 included an asset impairment charge of $683,000 or a tax-effected $(0.04) per share and non-recurring expenses associated with the ongoing evaluation of strategic alternatives of $211,000 or a tax-effected $(0.01) per share. Net loss before non-cash impairment charges and non-recurring expenses associated with the ongoing evaluation of strategic alternatives was $311,000 or $(0.03) in the fourth quarter of 2009, versus a net loss of $295,000 or $(0.03) per share in the same year-ago quarter, during which there were no impairment charges.
Fiscal 2009 net income was $392,000 or $0.04 per basic and diluted share versus net income of $84,000 or $0.01 per diluted share in the same year-ago period. Net income in the full year of 2009 included asset impairment charges of $1.1 million or a tax-effected $(0.06) per basic and diluted share and non-recurring expenses associated with the ongoing evaluation of strategic alternatives of $211,000 or a tax-effected $(0.02) per basic and diluted share, versus a store closure reversal credit of $46,000 or $0.00 per diluted share in 2008. Fiscal 2009 net income before non-cash impairment charges and non-recurring expenses associated with the ongoing evaluation of strategic alternatives was $1.2 million or $0.12 per basic and diluted share. The asset impairment charges in both the fourth quarter and full year 2009 relate to units targeted for closure upon lease expiration and units concentrated in areas particularly hard-hit by the economic downturn.
Adjusted EBITDA (a non-GAAP measure as defined below), was $2.4 million or $0.24 per basic and diluted share in the fourth quarter of 2009, versus $2.6 million or $0.26 per basic and diluted share in the same year-ago period. Excluding the above-mentioned $211,000 in non-recurring expenses in Q4 of 2009, adjusted EBITDA was $2.6 million or $0.26 per basic and diluted share in both the fourth quarter of 2009 and in the same year-ago period. For the full year of 2009, adjusted EBITDA was a record $13.1 million or $1.30 per diluted share, versus $11.6 million or $1.16 per diluted share in the same year-ago period. Excluding the aforementioned $211,000 in non-recurring expenses, adjusted EBITDA was a record $13.3 million or $1.32 per basic and diluted share, up 14% from $11.6 million or $1.16 per diluted share in the same year-ago period.
Cash and cash equivalents at December 27, 2009 totaled $9.5 million, up 29% from $7.4 million in the previous quarter and up 64% from $5.8 million at the end of fiscal 2008.
Fourth Quarter and Fiscal 2009 Operating Highlights
Comparable store sales (stores operating for more than 15 months) decreased 2.7% in the fourth quarter of 2009 versus a comparable store sales decrease of 0.2% in the same quarter last year. Comparable store sales for fiscal 2009 decreased 0.7% versus a comparable store sales decrease of 2.4% in 2008. In both the fourth quarter and full year 2009, the impact of decreased transaction volume more than offset an increase in the average check per customer.
Average unit volume was slightly less than $1.0 million, which was virtually unchanged from the same year-ago quarter.
Restaurant operating margin (a non-GAAP measure as defined below) was 17.1%, as compared to 15.3% in the same year-ago quarter. For fiscal 2009, restaurant operating margin was 16.4% as compared to 15.9% in 2008.
In the fourth quarter of 2009, as a percentage of restaurant sales, restaurant labor cost increased by 90 basis points and restaurant occupancy and other costs rose by 60 basis points versus the same quarter last year, while cost of sales decreased by 330 basis points. The increase in restaurant labor cost as a percentage of sales was primarily attributable to deleveraging manager salaries caused by decreased comp sales. The increase in restaurant occupancy and other costs was primarily due to higher rent and common area maintenance charges. The decrease in cost of sales as a percentage of sales was driven primarily by the impact of menu price increases that the company was able to leverage in combination with favorable supply agreements and product reformulation efforts.
General and administrative expenses for the fourth quarter of 2009 were $5.8 million, as compared to $4.4 million in the same year-ago quarter. As a percentage of sales, general and administrative expenses increased to 12.7% from 9.7% for the same period last year. The quarter-over-quarter increase was due to increased incentive compensation resulting from the record annual adjusted EBITDA performance, professional fees associated with the ongoing process of evaluating strategic alternatives and increased bad debt expense. As a percentage of sales, general and administrative expenses before non-recurring expenses mentioned above were 9.9% for the full year of 2009 as compared to 10.0% for 2008.
Rubio's opened one restaurant in the fourth quarter of 2009, as compared to five in the same period a year-ago, increasing the total to ten units opened during 2009. Pre-opening expenses in the fourth quarter of 2009 were $14,000, a decrease of 93% from $201,000 in the same quarter last year.
Management Commentary
"Despite a still challenging economy, we have continued to drive both sales and cash generation, closing the fiscal year with record annual revenues and adjusted EBITDA," said Dan Pittard, Rubio's president and CEO. "I'm particularly pleased that we were able to improve restaurant level operating margin from 15.3% in Q4 2008 to 17.1% in Q4 2009, which resulted in flat quarter-over-quarter adjusted EBITDA despite the decrease in comparable store sales. We attribute our success to extremely tight cost control and our continued focus on implementing our winning strategy for the Fast Casual restaurant segment -- still the fastest growing segment of the restaurant industry.
"Our market research confirms our guests understand our value proposition, and it resonates particularly well with our customers in this economy. They appreciate that we provide an attractive casual ambiance along with a menu selection priced significantly below casual dining price points. We believe we are very well-positioned to build our customer base as the economy improves.
"Our fourth quarter performance reflected its typical seasonality, which has been traditionally the low water mark for the year. However, Q4 also continued the tradition of surpassing the revenue of the previous year's fourth quarter, making Q4 2009 another record revenue fourth quarter. As the first quarter of 2010 approaches its close, we are seeing the traditional seasonal sales increase following the fourth quarter."
Rubio's CFO Frank Henigman commented: "Our balance sheet remains strong, ending fiscal year 2009 with $9.5 million in cash and no debt. We generated $11.3 million in operating cash flow for the year, which provided the opportunity to build cash during the year while pursuing expansion plans that were tempered due to the economic environment."
The differences between adjusted EBITDA and GAAP net income for the 13-week quarters and 52-weeks of 2008 and 2009 are indicated as follows:
For the Thirteen Weeks Ended
Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2008 Q2 2008 Q3 2008 Q4 2008
------- ------- ------- ------ ------ ------- ------- ------
Net income
(loss) 245 512 487 (852) (745) 335 789 (295)
Income tax
expense
(benefit) 150 214 151 (451) (497) 244 413 (165)
Interest
expense
(income)
and
investment
(income),
net 33 38 21 37 (1) 32 42 60
Loss on
disposal/
sale of
property 85 99 75 110 104 58 57 76
Asset
impairment
and store
closure
expense
(reversal) - 359 26 683 (91) 45 - -
Depreciation
and
amortization 2,496 2,449 2,480 2,482 2,259 2,332 2,420 2,641
Share-based
compensation 226 247 264 422 349 361 529 279
------- ------- ------- ------ ------ ------- ------- ------
ADJUSTED
EBITDA $ 3,235 $ 3,918 $ 3,504 $2,431 $1,378 $ 3,407 $ 4,250 $2,596
======= ======= ======= ====== ====== ======= ======= ======
For the Fifty-Two
Weeks Ended
------------------
Q4 2009 Q4 2008
--------- --------
Net income 392 84
Income tax expense (benefit) 64 (5)
Interest expense (income) and investment (income), net 129 133
Loss on disposal/sale of property 369 295
Asset impairment and store closure expense (reversal) 1,068 (46)
Depreciation and amortization 9,907 9,652
Share-based compensation 1,159 1,518
--------- --------
ADJUSTED EBITDA $ 13,088 $ 11,631
========= ========
The differences between adjusted EBITDA including costs incurred for the evaluation of strategic alternatives and GAAP net income for the 13-week quarter and 52-weeks ended December 27, 2009 are indicated as follows:
For the For the
Thirteen Fifty-Two
Weeks Weeks
Ended Ended
-------- ---------
Q4 2009 Q4 2009
-------- ---------
Net (loss) income (852) 392
Income tax expense (benefit) (451) 64
Interest expense (income) and investment (income), net 37 129
Loss on disposal/sale of property 110 369
Asset impairment charge 683 1,068
Depreciation and amortization 2,482 9,907
Share-based compensation 422 1,159
Costs for evaluation of strategic alternatives 211 211
-------- ---------
ADJUSTED EBITDA $ 2,642 $ 13,299
======== =========
The differences between net (loss) income including asset impairment charges and costs incurred for the evaluation of strategic alternatives, and their respective tax effects, and GAAP net income for the 13-week quarter and 52-weeks ended December 27, 2009 are indicated as follows:
For the For the
Thirteen Fifty-Two
Weeks Weeks
Ended Ended
--------- ---------
Q4 2009 Q4 2009
--------- ---------
Net (loss) income (852) 392
Asset impairment charge 683 1,068
Income tax effect of asset impairment charge (270) (422)
Costs for evaluation of strategic alternatives 211 211
Income tax effect of costs for evaluation of
strategic alternatives (83) (83)
--------- ---------
Net (loss) income before charges $ (311) $ 1,166
========= =========
RUBIO'S RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
For the Thirteen For the Fifty-Two
Weeks Ended Weeks Ended
-------------------------- --------------------------
December 27, December 28, December 27, December 28,
2009 2008 2009 2008
------------ ------------ ------------ ------------
RESTAURANT SALES $ 45,417 $ 44,963 $ 188,749 $ 179,130
FRANCHISE AND
LICENSING REVENUES 26 21 129 174
------------ ------------ ------------ ------------
TOTAL REVENUES 45,443 44,984 188,878 179,304
COST OF SALES 11,451 12,824 49,688 51,348
RESTAURANT LABOR 14,884 14,323 61,215 56,621
RESTAURANT
OCCUPANCY AND
OTHER 11,331 10,938 46,863 42,591
GENERAL AND
ADMINISTRATIVE
EXPENSES 5,754 4,381 18,830 17,942
DEPRECIATION AND
AMORTIZATION 2,482 2,641 9,907 9,652
PRE-OPENING
EXPENSES 14 201 353 689
ASSET IMPAIRMENT
AND STORE CLOSURE
EXPENSE (REVERSAL) 683 - 1,068 (46)
LOSS ON
DISPOSAL/SALE OF
PROPERTY 110 76 369 295
------------ ------------ ------------ ------------
OPERATING (LOSS)
INCOME (1,266) (400) 585 212
INTEREST (EXPENSE)
INCOME AND
INVESTMENT INCOME,
NET (37) (60) (129) (133)
------------ ------------ ------------ ------------
(LOSS) INCOME
BEFORE INCOME
TAXES (1,303) (460) 456 79
INCOME TAX
(BENEFIT) EXPENSE (451) (165) 64 (5)
------------ ------------ ------------ ------------
NET (LOSS) INCOME $ (852) $ (295) $ 392 $ 84
============ ============ ============ ============
BASIC EARNINGS DATA
EPS $ (0.08) $ (0.03) $ 0.04 $ 0.01
============ ============ ============ ============
AVERAGE SHARES
OUTSTANDING 10,035 9,951 9,993 9,951
============ ============ ============ ============
DILUTED EARNINGS
DATA
EPS $ (0.08) $ (0.03) $ 0.04 $ 0.01
============ ============ ============ ============
AVERAGE SHARES
OUTSTANDING 10,035 9,951 10,072 10,014
============ ============ ============ ============
RUBIO'S RESTAURANTS, INC.
OPERATING RESULTS AS A PERCENTAGE OF TOTAL REVENUES
(unaudited)
Percentage of Total Percentage of Total
Revenues For the Thirteen Revenues For the Fifty-Two
Weeks Ended Weeks Ended
-------------------------- --------------------------
December 27, December 28, December 27, December 28,
2009 2008 2009 2008
------------ ------------ ------------ ------------
TOTAL REVENUES 100.0% 100.0% 100.0% 100.0%
COST OF SALES (1) 25.2% 28.5% 26.3% 28.7%
RESTAURANT LABOR
(1) 32.8% 31.9% 32.4% 31.6%
RESTAURANT
OCCUPANCY AND
OTHER (1) 24.9% 24.3% 24.8% 23.8%
GENERAL AND
ADMINISTRATIVE
EXPENSES 12.7% 9.7% 10.0% 10.0%
DEPRECIATION AND
AMORTIZATION 5.5% 5.9% 5.2% 5.4%
PRE-OPENING
EXPENSES 0.0% 0.4% 0.2% 0.4%
ASSET IMPAIRMENT
AND STORE CLOSURE
EXPENSE (REVERSAL) 1.5% 0.0% 0.6% 0.0%
LOSS ON
DISPOSAL/SALE OF
PROPERTY 0.2% 0.2% 0.2% 0.2%
OPERATING (LOSS)
INCOME -2.8% -0.9% 0.3% 0.1%
INTEREST (EXPENSE)
INCOME AND
INVESTMENT INCOME,
NET -0.1% -0.1% -0.1% -0.1%
(LOSS) INCOME
BEFORE INCOME
TAXES -2.9% -1.0% 0.2% 0.0%
INCOME TAX
(BENEFIT) EXPENSE -1.0% -0.4% 0.0% 0.0%
NET (LOSS) INCOME -1.9% -0.7% 0.2% 0.0%
(1) As a percentage of restaurant sales
RUBIO'S RESTAURANTS, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December 27, 2009 December 28, 2008
----------------- -----------------
CASH AND SHORT-TERM INVESTMENTS $ 9,544 $ 5,816
OTHER CURRENT ASSETS 9,505 10,913
PROPERTY - NET 43,086 45,947
OTHER ASSETS 12,566 10,473
----------------- -----------------
TOTAL ASSETS $ 74,701 $ 73,149
================= =================
CURRENT LIABILITIES $ 20,947 $ 19,172
OTHER LIABILITIES 6,599 8,591
STOCKHOLDERS' EQUITY 47,155 45,386
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 74,701 $ 73,149
================= =================
Logos, product and company names mentioned are the property of their respective owners.
- Rubio's Restaurants Appoints Marc Simon to Position of Chief Executive Officer
- Rubio's Restaurants Reports Second Quarter 2010 Results
- Robbins Umeda LLP Announces an Investigation of the Acquisition of Rubio's Restaurants, Inc. by Mill Road Capital, L.P.
- Mill Road Capital to Acquire Rubio's Restaurants & Rubio's Restaurants Reports First Quarter 2010 Results
- Rubio's Fresh Mexican Grill(R) Is First Restaurant to Use Bottle Box(TM) Food Containers Made From 100 Percent Recycled Materials
- Tootie Pie Company January Same Store Sales Up 23%
- Panera Bread Company Reports Fourth Quarter and Full Year Fiscal 2011 Diluted EPS of $1.42 and $4.65, Both Before One-Time Charge, Up 17% and 28% Over Fiscal 2010
- Chick-fil-A Achieves Record Annual Sales of $4 Billion
- Benihana Inc. Reports Results for Fiscal Third Quarter 2012
- Buffalo Wild Wings, Inc. Fourth Quarter Revenues Up 34.5%
