SOURCE: The Smith & Wollensky Restaurant Group

August 17, 2005 16:18 ET

Smith & Wollensky Reports Second Quarter Financial Results

NEW YORK, NY -- (MARKET WIRE) -- August 17, 2005 -- The Smith & Wollensky Restaurant Group, Inc. (NASDAQ: SWRG) today announced financial results for the second quarter and six months ended July 4, 2005.

Total consolidated restaurant sales for the second quarter of 2005 were $32.0 million, a 6.5% increase from the corresponding period a year ago. Comparable consolidated restaurant sales for the quarter increased 0.6%. Net income for the second quarter of 2005 was $104,000, or $0.01 per diluted share, compared with a restated net income of $106,000, or $0.01 per diluted share, in the comparable quarter last year.

For the first six months of 2005, total consolidated restaurant sales were $65.0 million, a 7.1% increase from the first six months of 2004. Comparable consolidated restaurant sales for the first half rose 0.4%. Net income for the six-month period was $551,000, or $0.06 per diluted share, compared with a restated net loss of $123,000, or $0.01 per share, for the first half of 2004.

Chairman and CEO Alan Stillman commented, "Overall, we are pleased with the bottom line performance for the first half of 2005. In addition, our balance sheet was strengthened by our ability to eliminate approximately $9.2 million of indebtedness during the second quarter of 2005."

Conference Call

Alan Stillman, Chairman & CEO, and Sam Goldfinger, CFO, will conduct a conference call to review the Company's financial results for the second quarter of 2005 and six months ended July 4, 2005 at 5:00 p.m. ET on August 17, 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 second quarter of 2005, is expected to be posted on the Company's website under the heading Investor Relations 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 one of the largest-grossing à la carte restaurants 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  Six Months Ended
                                 July 4,    June 28, July 4,  June 28,
                                    2005       2004     2005      2004
                                 -------    -------  -------   -------
                                           Restated             Restated


Consolidated restaurant sales  $   31,971 $  30,010   $ 64,965  $ 60,662
                               ---------- ---------   --------  --------
    Total cost of consolidated
     restaurant sales              28,943    26,675     58,120    54,246
                               ---------- ---------   --------  --------
Income from consolidated
 restaurant operations              3,028     3,335      6,845     6,416

Management fee income                 248       316        499       632
                               ---------- ---------   --------  --------
Income from consolidated and
 managed restaurants                3,276     3,651      7,344     7,048

General and administrative
 expenses                           2,143     2,442      4,467     5,068
Royalty expense                       479       432        976       871
                               ---------- ---------   --------  --------
Operating income                      654       777      1,901     1,109

Interest expense                     (338)     (333)      (768)     (656)
Amortization of deferred debt
 financing costs                      (23)      (26)       (55)      (44)
Interest income                        21         -         22         -
                               ---------- ---------   --------  --------
Interest expense, net                (340)     (359)      (801)     (700)

Income before provision for
 income taxes                         314       418      1,100       409

Provision for income taxes            118        51        175       103
                               ---------- ---------   --------  --------
Income before interest in
 (income) loss of consolidated
 variable interest entity             196       367        925       306

Interest in (income) loss of
 consolidated variable
 interest entity                      (92)     (261)      (374)     (429)
                               ---------- ---------   --------  --------

Net income (loss)              $      104 $     106   $    551  $   (123)
                               ========== =========   ========  ========
Net income (loss)
 per common share:
        Basic and diluted      $     0.01 $    0.01   $   0.06  $  (0.01)
                               ========== =========  =========  ========
Weighted average common shares
 outstanding:
        Basic                   9,375,371  9,376,249  9,376,893 9,376,249
                               ========== ==========  ========= =========
        Diluted                10,007,183 10,131,915  9,908,739 9,376,249
                               ========== ==========  ========= =========



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

                                                     July 4,     January 3,
                    Assets                             2005          2005
                                                     -------       -------
                                                    Unaudited      Audited
Current assets:
  Cash and cash equivalents                          $ 2,355       $ 1,821
  Short-term investments                                 239           195
  Accounts receivable, net                             3,380         2,366
  Merchandise inventory                                4,883         5,139
  Prepaid expenses and other current assets            1,260         1,103
                                                     -------       -------
     Total current assets                             12,117        10,624

Property and equipment, net                           62,503        73,253
Goodwill, net                                          6,886         6,886
Licensing agreement, net                               3,554         3,637
Long-term investments                                  8,174             -
Other assets                                           4,306         4,728
                                                     -------       -------

     Total assets                                    $97,540       $99,128
                                                     =======       =======
        Liabilities and Stockholders' Equity

Current liabilities:
  Current portion of long-term debt                  $   196       $ 3,329
  Current portion of obligations under capital
   lease                                                 133             -
  Current portion of deferred gain                       367             -
  Accounts payable and accrued expenses               13,127        15,738
                                                     -------       -------
      Total current liabilities                       13,823        19,067

Obligations under capital lease, net of current
 portion                                               7,820        11,624
Deferred gain on sale leaseback, net of current
 portion                                              13,210
Long-term debt, net of current portion                 3,214         9,611
Deferred rent                                          8,742         8,647
                                                     -------       -------
      Total liabilities                               46,809        48,949

Interest in consolidated variable interest entity       (538)         (572)

Stockholders' equity:
  Common stock (par value $.01; authorized
   40,000,000 shares; 9,367,052 and 9,378,349
   shares issued and outstanding at July 4, 2005
   and January 3, 2005, respectively)                     94            94
  Additional paid-in capital                          70,024        70,002
  Accumulated deficit                                (18,876)      (19,427)
  Accumulated other comprehensive income                 126            82
  Treasury stock, 16,647 shares at July 4, 2005,
   at cost                                               (99)            -
                                                     -------       -------
                                                      51,269        50,751
                                                     -------       -------
      Total liabilities and stockholders' equity     $97,540       $99,128
                                                     =======       =======

Contact Information

  • Investor Contact:
    Allison Good
    The Smith & Wollensky Restaurant Group
    Phone: 212-838-2061
    Email: Email Contact