SOURCE: The Smith & Wollensky Restaurant Group

May 02, 2005 16:24 ET

Smith & Wollensky Reports Fourth Quarter & Full Year 2004 Financial Results

NEW YORK, NY -- (MARKET WIRE) -- May 2, 2005 -- The Smith & Wollensky Restaurant Group, Inc. (NASDAQ: SWRG) today announced financial results for the fourth quarter and year ended January 3, 2005.

Total consolidated restaurant sales for the quarter ended January 3, 2005 were $38.0 million, a 31.2% increase from the corresponding period in 2003. The results for 2004 and 2003 include the consolidation of the accounts and results of the entity that owns Maloney & Porcelli, a unit managed by the Company. The fourth quarter of 2004 includes fourteen weeks, while the 2003 period was thirteen weeks. Comparable consolidated restaurant sales for the fourteen week-quarter were $32.4 million, a 12.0% increase over the fourth quarter of 2003. On a weekly average basis, comparable consolidated restaurant sales increased by 4.0% in the fourth quarter. Comparable consolidated restaurant sales include only units that have been open for 15 months or longer. Net income for the fourth quarter of 2004 was $1,315,000, or $0.13 per share on a diluted basis, compared to a restated net income of $71,000, or $0.01 per share in the fourth quarter of 2003. This restatement is related to lease accounting issues and to accounting for gift certificates.

For the full year, a 53-week period, total consolidated restaurant sales were $123.1 million, a 19.0% increase from the 52 weeks of 2003. Comparable consolidated restaurant sales for the 53 weeks of 2004 were $107.3 million, an 8.0% increase from the previous year. On a weekly average basis, the increase for the year was 5.9%. The net loss for the year was $2.0 million, or $0.22 per share, compared to a restated net loss of $1.5 million, or $0.16 per share in 2003.

Chairman and CEO Alan Stillman said, "We are pleased with our improved financial results for the fourth quarter of 2004. During the year, we are proud to have added two restaurants to our portfolio, Houston and 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 fourth quarter and year ended January 3, 2005 at 5:00 p.m. ET on Monday, May 2, 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 fourth quarter of 2004, 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
                    Consolidated Statements of Operations
            (dollar amounts in thousands, except per share amounts)

                            Three Months Ended           Year Ended
                          January 3, December 29,   January 3, December 29,
                             2005     2003 (a)(b)      2005     2003 (a)(b)
                          ----------  ----------    ----------  ----------
                          (14 weeks)  (13 weeks)    (53 weeks)  (52 weeks)
                           (Audited)  (Pro Forma)    (Audited)  (Pro Forma)

Consolidated restaurant
 sales                    $   37,990  $   28,950    $  123,132  $  103,500
                          ----------  ----------    ----------  ----------
    Total cost of
     consolidated
     restaurant sales         31,800      25,119       110,862      92,635
                          ----------  ----------    ----------  ----------
Income from consolidated
 restaurant operations         6,190       3,831        12,270      10,865

Management fee income            301         551         1,192       1,210
                          ----------  ----------    ----------  ----------

Income from consolidated
 and managed restaurants       6,491       4,382        13,462      12,075

General and administrative
 expenses                      3,301       3,120        10,786      10,618
Royalty expense                  546         372         1,782       1,418
                          ----------  ----------    ----------  ----------
Operating income (loss)        2,644         890           894          39

Interest expense                (414)       (240)       (1,401)     (1,005)
Amortization of deferred
 debt financing costs            (36)        (20)         (112)        (59)
Interest income                    1           9             2          99
                          ----------  ----------    ----------  ----------
Interest expense, net           (449)       (251)       (1,511)       (965)

Income (loss) before
 provision for income taxes    2,195         639          (617)       (926)

Provision for income taxes        70          46           225         206
                          ----------  ----------    ----------  ----------
Income (loss) before
 interest in (income)
 loss of consolidated
 variable interest entity      2,125         593          (842)     (1,132)

Interest in (income) loss of
 consolidated variable
 interest entity                (810)       (522)       (1,198)       (368)
                          ----------  ----------    ----------  ----------

Net income (loss)         $    1,315  $       71    $   (2,040) $   (1,500)
                          ==========  ==========    ==========  ==========
Net income (loss) per
 common share:
    Basic                 $     0.14  $     0.01    $    (0.22) $    (0.16)
                          ==========  ==========    ==========  ==========
    Diluted               $     0.13  $     0.01    $    (0.22) $    (0.16)
                          ==========  ==========    ==========  ==========
Weighted average common
 shares outstanding:
    Basic                  9,378,349   9,375,664     9,377,223   9,364,075
                          ==========  ==========    ==========  ==========
    Diluted                9,846,945  10,071,452     9,377,223   9,364,075
                          ==========  ==========    ==========  ==========

(a) For comparability purposes, the accounts and results of Maloney &
    Porcelli for fiscal 2003 are being consolidated on a pro forma basis.
(b) Restated to reflect a correction of an error.

                  THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.
                              AND SUBSIDIARIES
                         Consolidated Balance Sheets
               (dollar amounts in thousands, except per share data)

                                                 January 3,    December 29,
             Assets                                2005        2003 (a)(b)
                                                -----------    -----------

Current assets:
    Cash and cash equivalents                   $     1,821    $     2,181
    Short-term investments                              195          1,055
    Accounts receivable, net                          2,366          3,055
    Merchandise inventory                             5,139          4,749
    Prepaid expenses and other current assets         1,103            845
                                                -----------    -----------
         Total current assets                        10,624         11,885

Property and equipment, net                          73,253         62,743
Goodwill, net                                         6,886          6,886
Licensing agreement, net                              3,637          3,338
Other assets                                          4,728          3,941
                                                -----------    -----------

         Total assets                           $    99,128    $    88,793
                                                ===========    ===========

        Liabilities and Stockholders' Equity

Current liabilities:
    Current portion of long-term debt           $     3,329    $     2,121
    Accounts payable and accrued expenses            15,738         12,577
                                                -----------    -----------
         Total current liabilities                   19,067         14,698

Obligations under capital lease                      11,624          9,991
Long-term debt, net of current portion                9,611          6,099
Deferred rent                                         8,647          6,277
                                                -----------    -----------
         Total liabilities                           48,949         37,065

Interest in consolidated variable interest entity      (572)          (930)

Stockholders' equity:
    Common stock (par value $.01; authorized
     40,000,000 shares; 9,378,349 and 9,376,249
     shares issued and outstanding at January 3,
     2005 and December 29, 2003, respectively)           94             94
    Additional paid-in capital                       70,002         69,940
    Accumulated deficit                             (19,427)       (17,392)
    Accumulated other comprehensive income               82             16
                                                -----------    -----------

                                                     50,751         52,658
                                                -----------    -----------

         Total liabilities and stockholders'
          equity                                $    99,128    $    88,793
                                                ===========    ===========

(a) For comparability purposes, the accounts and results of Maloney &
    Porcelli for fiscal 2003 are being consolidated on a pro forma basis.
(b) Restated to reflect a correction of an error.

Contact Information

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