P.F. Chang’s Reports Second Quarter 2010 Results
Consolidated revenues increased 3.8% to $312.8 million, including $1.3 million in revenues related to four international Bistro restaurants and a new line of premium frozen food entrées, all of which operate under licensing agreements.
P.F. Chang’s China Bistro, Inc. (NASDAQ: PFCB) today reported financial results for the second quarter ended July 4, 2010.
| (000 except per share data) | Q2 2010 | Q2 2009 | % Change | |||||||||||||||||||
| Revenues | $ | 312,838 | $ | 301,360 | 3.8 | % | ||||||||||||||||
| Income from continuing operations | $ | 18,158 | $ | 17,475 | 3.9 | % | ||||||||||||||||
| Net income | $ | 12,773 | $ | 11,605 | 10.1 | % | ||||||||||||||||
| Diluted income per share: | ||||||||||||||||||||||
| Income from continuing operations | $ | 0.55 | $ | 0.51 | 7.8 | % | ||||||||||||||||
| Net income | $ | 0.55 | $ | 0.49 | 12.2 | % | ||||||||||||||||
| Weighted average shares - diluted | 23,277 | 23,526 | -1.1 | % | ||||||||||||||||||
Highlights for the second quarter of 2010 compared to the prior year quarter include:
- Consolidated revenues increased 3.8% to $312.8 million, including $1.3 million in revenues related to four international Bistro restaurants and a new line of premium frozen food entrées, all of which operate under licensing agreements.
- Comparable store sales increased 0.1% at the Bistro and 3.0% at Pei Wei.
- Income from continuing operations increased 3.9% to $18.2 million.
- Net income increased 10.1% to $12.8 million.
- Income from continuing operations per diluted share increased 7.8% to $0.55.
- Net income per diluted share increased 12.2% to $0.55.
- The Company repaid total outstanding borrowings of $40.0 million under the senior credit facility during the second quarter of 2010.
Second quarter comparable store sales
| Fiscal 2010 | ||||||||||||||||||||||||||||
| April | May | June | Total Q2 | |||||||||||||||||||||||||
| Bistro | ||||||||||||||||||||||||||||
| Traffic effect | 3.3 | % | 2.0 | % | 2.4 | % | 2.6 | % | ||||||||||||||||||||
| Average ticket effect | -4.6 | % | -1.2 | % | -1.3 | % | -2.5 | % | ||||||||||||||||||||
| Total comparable store sales | -1.3 | % | 0.8 | % | 1.1 | % | 0.1 | % | ||||||||||||||||||||
| Pei Wei | ||||||||||||||||||||||||||||
| Traffic effect | 2.5 | % | 0.5 | % | 0.9 | % | 1.5 | % | ||||||||||||||||||||
| Average ticket effect | 1.4 | % | 1.7 | % | 1.5 | % | 1.5 | % | ||||||||||||||||||||
| Total comparable store sales | 3.9 | % | 2.2 | % | 2.4 | % | 3.0 | % | ||||||||||||||||||||
Bistro
The Bistro achieved positive same store sales in the second quarter of 2010 including the benefit of positive traffic throughout the entire quarter. Average ticket at the Bistro declined during the quarter but sequentially improved in May, primarily due to the benefit of a one to two percent menu price increase and year-over-year improvement in the amount of high-dollar tickets.
Pei Wei
Pei Wei achieved positive same store sales in the second quarter of 2010 including the benefit of positive traffic throughout the entire quarter. Average ticket at Pei Wei, which includes the benefit of an approximate one percent menu price increase that went into effect in April, was positive for the entire quarter.
Comparable store sales for the second quarter of fiscal 2010 reflect results from the 13 week operating period in the current year compared to the same 13 week operating period in the prior year.
2010 Expectations
The Company anticipates that fiscal 2010 consolidated revenues will increase slightly compared to fiscal 2009, including expectations of slightly higher average weekly sales at Pei Wei and slightly lower average weekly sales at the Bistro for the full year. The Company continues to expect fiscal 2010 restaurant operating margins to be consistent with fiscal 2009 and consolidated diluted earnings per share for fiscal 2010 to approximate $2.00.
The Company expects to open two new Bistro restaurants and one new Pei Wei restaurant during the second half of fiscal 2010. The Company also plans to repurchase approximately $40 million in common shares under its current share repurchase authorization during fiscal 2010.
Quarterly dividend
The Company’s Board of Directors has authorized a cash dividend payment of $0.25 per share on the Company’s outstanding common stock. The dividend is payable on August 23, 2010 to shareholders of record at the close of business on August 9, 2010. The amount of the cash dividend was computed based on 45% of the Company’s net income for the quarter ended July 4, 2010.
Global Brand Development
In July 2010, the Company signed a development and licensing agreement with International Restaurant Services, Inc., a leading casual dining restaurant operator in Puerto Rico, to develop four restaurants over the next six years. The first location in Puerto Rico is scheduled to open during the first half of fiscal 2012.
Definitions
The following definitions apply to these terms as used throughout this release:
- Income from continuing operations refers to income from continuing operations, net of tax, attributable to PFCB common stockholders.
- Net income refers to Net income attributable to PFCB common stockholders.
- Comparable store sales changes include company-operated restaurants and represent the change in period-over-period sales for the comparable restaurant base. A restaurant becomes comparable in its eighteenth month of operation.
About the Company
P.F. Chang’s China Bistro, Inc. owns and operates two restaurant concepts in the Asian niche. P.F. Chang’s China Bistro features a blend of high-quality, Chinese-inspired cuisine and American hospitality in a sophisticated, contemporary bistro setting. Pei Wei Asian Diner offers a modest menu of freshly prepared pan-Asian cuisine in a relaxed, warm environment offering attentive counter service and take-out flexibility.
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