SOURCE: The Smith & Wollensky Restaurant Group

May 19, 2005 16:05 ET

Smith & Wollensky Reports First Quarter 2005 Financial Results

NEW YORK, NY -- (MARKET WIRE) -- May 19, 2005 -- The Smith & Wollensky Restaurant Group, Inc. (NASDAQ: SWRG) today announced financial results for the first quarter of 2005, ended April 4, 2005.

Total consolidated restaurant sales for the quarter were $33.0 million, a 7.6% increase from the corresponding period in 2004. Comparable consolidated restaurant sales for the first quarter of 2005 were $28.8 million, a 0.2% increase over the fourth quarter of 2003.

Net income for the first quarter of 2005 was $447,000, or $0.05 per share on a diluted basis, compared to a restated loss of $229,000 for the first quarter of 2004. This restatement is related to lease accounting issues and to accounting for gift certificates.

Chairman and CEO Alan Stillman said, "The year has started off on a good note for our restaurants, supported by strong banquet sales and great response to our newest restaurant in Boston."

Conference Call

Alan Stillman, Chairman & CEO, and Alan Mandel, CFO, will conduct a conference call to review the Company's financial results for the first quarter ended April 4, 2005 at 5:00 p.m. ET on Thursday, May 19, 2005. Interested parties may listen to the live call over the Internet via http://www.smithandwollensky.com. To listen to the live call, please go to the website at least 15 minutes early to register and to download and install any necessary audio software. If you are unable to listen live, the conference call will also be archived on the website listed above. An audio recording of the conference call, which may contain material non-public information regarding the Company's results of operations or financial condition for the first quarter of 2005, is expected to be posted on the Company's website under the heading Investor Relations immediately following the conference call.

About Smith & Wollensky Restaurant Group

The Smith & Wollensky Restaurant Group develops and operates high-end, high-volume restaurants in major cities across the United States. The original Smith & Wollensky, a traditional New York steakhouse, opened in 1977 and is currently believed to be the largest-grossing a la carte restaurant in the country. Since its inception, the company has grown to include 16 restaurants, including Smith & Wollensky in New York, Miami Beach, Chicago, New Orleans, Las Vegas, Washington, D.C., Philadelphia, Columbus, Dallas, Houston, and Boston. SWRG also operates five other restaurants in New York, including Cité, Maloney & Porcelli, Manhattan Ocean Club, Park Avenue Café, and The Post House.

Except for historical information contained herein, the statements made in this press release regarding the Company's business, strategy and results of operations are forward-looking statements which are based on management's beliefs and information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are subject to a number of risks and uncertainties that could cause actual results to differ materially from such statements. Factors that may cause such differences include changes in economic conditions generally or in each of the markets in which the Company is located, unanticipated changes in labor or food costs, changes in consumer preferences, the level of competition in the high-end segment of the restaurant industry and the success of the Company's growth strategy. For a more detailed description of such factors, please see the Company's filings with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


                THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.
                           AND SUBSIDIARIES
              Unaudited Consolidated Statements of Operations
          (dollar amounts in thousands, except per share amounts)

                                              Three Months Ended
                                             April 4,    March 29,
                                               2005         2004
                                            ---------    ---------
                                                         Restated

Consolidated restaurant sales               $  32,994    $  30,652
                                            ---------    ---------

    Total cost of consolidated
     restaurant sales                          29,177       27,571
                                            ---------    ---------

Income from consolidated restaurant
 operations                                     3,817        3,081

Management fee income                             251          315
                                            ---------    ---------

Income from consolidated and managed
 restaurants                                    4,068        3,396

General and administrative expenses             2,324        2,622
Royalty expense                                   497          442
                                            ---------    ---------

Operating income                                1,247          332

Interest expense                                 (430)        (323)
Amortization of deferred debt
 financing costs                                  (32)         (18)
Interest income                                     1            -
                                            ---------    ---------
Interest expense, net                            (461)        (341)

Income (loss) before provision for
 income taxes                                     786           (9)

Provision for income taxes                         57           52
                                            ---------    ---------
Income (loss) before interest in (income)
 loss of consolidated variable
 interest entity                                  729          (61)

Interest in (income) loss of consolidated
 variable interest entity                        (282)        (168)
                                            ---------    ---------

Net income (loss)                           $     447    $    (229)
                                            =========    =========
Net income (loss) per common share:
  Basic                                     $    0.05    $   (0.02)
                                            =========    =========
  Diluted                                   $    0.05    $   (0.02)
                                            =========    =========
Weighted average common shares outstanding:
  Basic                                     9,378,415    9,376,249
                                            =========    =========
  Diluted                                   9,841,596    9,376,249
                                            =========    =========


              THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.
                            AND SUBSIDIARIES

                      Consolidated Balance Sheets
          (dollar amounts in thousands, except per share data)

                                             April 4,    January 3,
                 Assets                        2005         2005
                                            ---------    ---------
                                            Unaudited     Audited
Current assets:
  Cash and cash equivalents                 $     812    $   1,821
  Short-term investments                          207          195
  Accounts receivable, net                      2,673        2,366
  Merchandise inventory                         5,078        5,139
  Prepaid expenses and other current assets     1,567        1,103
                                            ---------    ---------
    Total current assets                       10,337       10,624

Property and equipment, net                    72,630       73,253
Goodwill, net                                   6,886        6,886
Licensing agreement, net                        3,595        3,637
Other assets                                    4,758        4,728
                                            ---------    ---------

    Total assets                            $  98,206    $  99,128
                                            =========    =========

    Liabilities and Stockholders' Equity

Current liabilities:
  Current portion of long-term debt         $   3,332    $   3,329
  Accounts payable and accrued expenses        14,410       15,738
                                            ---------    ---------
    Total current liabilities                  17,742       19,067

Obligations under capital lease                11,596       11,624
Long-term debt, net of current portion          9,414        9,611
Deferred rent                                   8,694        8,647
                                            ---------    ---------
    Total liabilities                          47,446       48,949

Interest in consolidated variable
 interest entity                                 (460)        (572)

Stockholders' equity:
  Common stock (par value $.01; authorized
   40,000,000 shares; 9,380,349 and
   9,378,349 shares issued and outstanding
   at April 4, 2005 and January 3, 2005,
   respectively)                                   94           94
  Additional paid-in capital                   70,012       70,002
  Accumulated deficit                         (18,980)     (19,427)
  Accumulated other comprehensive income           94           82
                                            ---------    ---------

                                               51,220       50,751
                                            ---------    ---------

    Total liabilities and
     stockholders' equity                   $  98,206    $  99,128
                                            =========    =========

Contact Information

  • Investor Contact:
    Allison Good
    The Smith & Wollensky Restaurant Group
    Phone: 212-838-2061 x2379
    Email: agood@swrg.com