Financial

Logan's Roadhouse, Inc. First Quarter 2015 Net Sales Down 1.2%

Comparable restaurant sales decreased 1.3%, average check increased by 4.7%, and customer traffic decreased by 5.7%.

Logan's Roadhouse

LRI Holdings, Inc., the parent company of Logan's Roadhouse, Inc., today announced financial results for the first quarter of fiscal year 2015 ended November 2, 2014.

Thirteen weeks ended

(In thousands)

November 2, 

2014

October 27, 

2013

Net sales

$

145,213

$

147,023

Net loss

(12,982)

(12,070)

Adjusted EBITDA

4,452

6,695

Selected Highlights for the First Quarter 2015 Compared to the First Quarter 2014:

  • Net sales decreased 1.2% to $145.2 million from $147.0 million. 
  • Comparable restaurant sales decreased 1.3%, average check increased by 4.7%, and customer traffic decreased by 5.7%. 
  • Net loss of $13.0 million compared to a net loss of $12.1 million. 
  • Adjusted EBITDA decreased 33.5% to $4.5 million from $6.7 million. (*)

Logan's Roadhouse is a casual dining steakhouse offering our guests wood-fire-grilled steaks, made-from-scratch recipes, fresh ingredients and southern-inspired signature dishes in a roadhouse atmosphere. Logan's opened its first restaurant in 1991 in Lexington, KY, and is headquartered in Nashville, TN. Logan's Roadhouse consists of 235 company-operated and 26 franchised restaurants in 23 states. LRI Holdings, Inc. is the parent company of Logan's Roadhouse.

LRI HOLDINGS, INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Thirteen weeks ended

(In thousands)

November 2, 

2014

October 27, 

2013

(unaudited)

(unaudited)

Revenues:

  Net sales 

$

145,213

$

147,023

  Franchise fees and royalties 

529

507

     Total revenues 

145,742

147,530

Costs and expenses:

  Restaurant operating costs:

     Cost of goods sold 

52,296

50,004

     Labor and other related expenses 

46,332

46,497

     Occupancy costs 

13,804

13,613

     Other restaurant operating expenses 

23,593

25,490

  Depreciation and amortization 

5,070

5,171

  Pre-opening expenses 

35

6

  General and administrative 

7,182

7,183

  Restaurant impairment and closing charges 

1,317

     Total costs and expenses 

148,312

149,281

     Operating loss

(2,570)

(1,751)

Interest expense, net 

10,412

10,319

    Loss before income taxes 

(12,982)

(12,070)

Income tax benefit

     Net loss

$

(12,982)

$

(12,070)

 

 

LRI HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

November 2, 2014

August 3, 2014

ASSETS

(unaudited)

Current assets:

  Cash and cash equivalents 

$

3,020

$

9,170

  Receivables 

12,216

9,734

  Inventories 

14,316

13,832

  Prepaid expenses and other current assets 

6,510

6,887

  Income taxes receivable 

117

115

     Total current assets 

36,179

39,738

Property and equipment, net 

207,710

209,078

Other assets 

12,565

13,273

Goodwill 

163,368

163,368

Tradename 

71,251

71,251

Other intangible assets, net 

16,669

17,190

     Total assets 

$

507,742

$

513,898

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:

  Accounts payable 

$

15,947

$

17,414

  Payable to RHI

2,384

2,721

  Other current liabilities and accrued expenses 

42,917

51,683

     Total current liabilities 

61,248

71,818

Long-term debt 

372,000

355,000

Deferred income taxes 

27,607

27,607

Other long-term obligations 

46,995

46,599

     Total liabilities 

507,850

501,024

Stockholder's equity:

  Common stock ($0.01 par value; 100 shares authorized; 1 share issued and outstanding)

  Additional paid-in capital 

230,000

230,000

  Retained deficit

(230,108)

(217,126)

     Total stockholder's equity 

(108)

12,874

     Total liabilities and stockholder's equity 

$

507,742

$

513,898

 

 

LRI HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Thirteen weeks ended

(In thousands)

November 2,

2014

October 27, 

2013

Cash flows from operating activities:

(unaudited)

(unaudited)

  Net loss

$

(12,982)

$

(12,070)

  Adjustments to reconcile net loss to net cash used in operating activities:

    Depreciation and amortization 

5,070

5,171

    Other amortization 

586

504

    Loss on sale/disposal of property and equipment 

868

500

    Amortization of deferred gain on sale and leaseback transactions

(13)

(12)

    Impairment charges for long-lived assets 

1,317

    Share-based compensation expense 

(330)

396

    Deferred income taxes

  Changes in operating assets and liabilities:

    Receivables 

(2,482)

259

    Inventories 

(484)

(526)

    Prepaid expenses and other current assets 

377

(1,136)

    Other non-current assets and intangibles 

(40)

(138)

    Accounts payable 

(1,355)

1,504

    Payable to RHI

(7)

(56)

    Income taxes payable/receivable 

(2)

    Other current liabilities and accrued expenses 

(8,766)

(14,589)

    Other long-term obligations 

708

919

       Net cash used in operating activities 

(18,852)

(17,957)

Cash flows from investing activities:

  Purchase of property and equipment 

(4,298)

(3,105)

       Net cash used in investing activities 

(4,298)

(3,105)

Cash flows from financing activities:

  Payments on revolving credit facility 

(3,900)

(600)

  Borrowings on revolving credit facility 

20,900

1,600

       Net cash provided by financing activities 

17,000

1,000

       Decrease in cash and cash equivalents 

(6,150)

(20,062)

Cash and cash equivalents, beginning of period 

9,170

23,708

Cash and cash equivalents, end of period 

$

3,020

$

3,646

 

Non-GAAP Financial Measures

This press release also contains non-GAAP financial measures such as EBITDA, Adjusted EBITDA, and Adjusted EBITDAR. The Company believes that these measures, together with reconciliations to the most comparable GAAP measure, are helpful to both management and investors in understanding and analyzing financial performance. However, the Company's non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures used by other companies. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for GAAP financial measures.

To the extent we discuss any non-GAAP financial measures on the earnings call, a reconciliation of each measure to the most directly comparable GAAP measure is available in this press release. In addition, the Current Report on Form 8-K furnished to the SEC concurrent with the issuance of this press release includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.

 

 

EBITDA, Adjusted EBITDA and Adjusted EBITDAR

The following table sets forth a reconciliation of net (loss) income, the most directly comparable GAAP financial measure to EBITDA, Adjusted EBITDA and Adjusted EBITDAR.

Thirteen weeks ended

(In thousands)

November 2, 

2014

October 27, 

2013

Net loss

$

(12,982)

$

(12,070)

Interest expense, net 

10,412

10,319

Income tax benefit

Depreciation and amortization 

5,070

5,171

      EBITDA 

2,500

3,420

Adjustments

Sponsor management fees(a) 

250

250

Non-cash asset write-offs:

  Restaurant impairment(b) 

1,317

  Loss on disposal of property and equipment(c) 

868

498

Restructuring costs(d) 

494

(460)

Pre-opening expenses (excluding rent)(e) 

15

2

Losses on sales of property(f) 

1

4

Non-cash rent adjustment(g) 

653

801

Non-cash stock-based compensation(h) 

(330)

396

Other adjustments(i) 

1

467

     Adjusted EBITDA

4,452

6,695

Cash rent expense(j) 

10,621

10,420

     Adjusted EBITDAR

$

15,073

$

17,115

(a)

Sponsor management fees consist of fees payable to certain affiliates of Kelso & Company, L.P. ("Kelso") under an advisory agreement.

(b)

Restaurant impairment charges were recorded in connection with the determination that the carrying value of certain of our restaurants exceeded their estimated fair value.

(c)

Loss on disposal of property and equipment consists of the loss on disposal or retirement of assets that are not fully depreciated.

(d)

Restructuring costs include severance, hiring replacement costs and other related charges, including the reversal of any such charges.

(e)

Pre-opening expenses (excluding rent) include expenses directly associated with the opening of a new restaurant. 

(f)

We recognize losses in connection with the sale and leaseback of restaurants when the fair value of the property being sold is less than the undepreciated cost of the property.

(g)

Non-cash rent adjustments represent the non-cash rent expense calculated as the difference between GAAP rent expense and amounts payable in cash under the leases during such time period. In measuring our operational performance, we focus on our cash rent payments. 

(h)

Non-cash stock-based compensation represents compensation expense recognized for time-based stock options issued by Roadhouse Holding Inc.

(i)

Other adjustments include non-recurring expenses and professional fees and ongoing expenses of closed restaurants.

(j)

Cash rent expense represents actual cash payments required under our leases.

 

 

 



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