Smith & Wollensky Reports Improved Fourth Quarter & 2003
Financial Results NEW YORK, March 11 /PRNewswire-FirstCall/ -- The
Smith & Wollensky Restaurant Group, Inc. today announced
financial results for the fourth quarter and year ended December
29, 2003. Total owned restaurant sales for the quarter ended
December 29, 2003 were $25.6 million, a 17.1% increase from the
corresponding period in 2002. Comparable owned restaurant sales for
the quarter rose 11.7% from a year ago. Comparable owned restaurant
sales include only units that have been open for 15 months or
longer. Net income for the fourth quarter of 2003 was $635,000, or
$0.06 per share on a diluted basis, a 38% increase from the net
income of $461,000, or $0.05 per share, for the fourth quarter of
2002. For the full year, total owned restaurant sales were $93.3
million, a 20.7% increase from 2002. Comparable owned restaurant
sales for 2003 were up 12.3% from the previous year. The net loss
for the year was $722,000, or $0.08 per share, substantially lower
than the net loss of $2.1 million, or $0.23 per share, in 2002.
Approximately one-third of the loss in 2002 was attributable to a
pre-tax charge of $722,000 related to the Company's investment in a
managed restaurant. Chairman and CEO Alan Stillman said, "We are
pleased with our improved financial results for both the fourth
quarter and 2003 as a whole. Our sales momentum, especially at
Smith & Wollensky restaurants outside New York, remained
excellent even as we began comparing against stronger year-ago
periods in the second half. This momentum clearly has carried over
into 2004, as comparable owned restaurant sales have risen
approximately 7% from a year ago in both January and February." Mr.
Stillman continued, "Extreme volatility in beef costs last year
pushed food costs higher as a percentage of sales. In response, the
Company increased prices selectively during the year. The company
estimates the impact of higher beef costs on cost of goods sold for
comparable restaurants for the year at approximately $1.5 million."
Mr. Stillman concluded, "We opened one new Smith & Wollensky
restaurant in 2003, in Dallas last March. Shortly after year-end,
we opened our second Texas unit in Houston, and we are very pleased
with the initial sales trends there. Our next new Smith &
Wollensky is scheduled to open in Boston this fall." 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 December 29, 2003 at 5:30
p.m. ET on March 11, 2004. 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 2003,
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, owns 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 17 restaurants, including Smith &
Wollensky in New York, Miami Beach,Chicago, New Orleans, Las Vegas,
Washington, D.C., Philadelphia, Columbus, Dallas and Houston. SWRG
also operates seven other restaurants in New York and Chicago,
including Cite, Maloney & Porcelli, Manhattan Ocean Club, Mrs.
Park's Tavern, ONEc.p.s., Park Avenue Cafe 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 differmaterially 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. (Financial
Tables Follow) THE SMITH & WOLLENSKY RESTAURANT GROUP, INC. AND
SUBSIDIARIES Consolidated Statements of Operations (dollar amounts
in thousands, except per share amounts) Three Months Ended Fiscal
Year Ended December December December December 29, 30, 29, 30, 2003
2002 2003 2002 Owned restaurant sales $25,582 21,855 93,326 77,310
Total cost of owned restaurant sales 22,433 19,295 83,518 70,158
Income from owned restaurant operations 3,149 2,560 9,808 7,152
Management fee income 839 643 2,182 2,407 Charge for investment in
managed restaurants - - - (722) Income from owned and managed
restaurants 3,988 3,203 11,990 8,837 General and administrative
expenses 2,699 2,300 10,137 9,573 Royalty expense 372 305 1,418
1,089 Goodwill impairment - 75 - 75 Operating income (loss) 917 523
435 (1,900) Interest expense (226) (93) (991) (242) Amortization of
deferred debt financing costs (20) (9) (59) (9) Interest income 10
52 99 193 Interest expense, net (236) (50) (951) (58) Income (loss)
before provision for income taxes 681 473 (516) (1,958) Provision
for income taxes 46 12 206 169 Net income (loss) $635 461 (722)
(2,127) Net income (loss) per common share: Basic $0.07 0.05 (0.08)
(0.23) Diluted $0.06 0.05 (0.08) (0.23) Weighted average common
shares outstanding: Basic 9,375,664 9,354,266 9,364,075 9,354,266
Diluted 10,071,452 9,669,058 9,364,075 9,354,266 THE SMITH &
WOLLENSKY RESTAURANT GROUP, INC. AND SUBSIDIARIES Consolidated
Balance Sheets (dollar amounts in thousands, except per share
amounts) December 29, December 30, Assets 2003 2002 Current assets:
Cash $1,898 4,158 Short-term investments 978 3,636 Accounts
receivable, net 3,098 2,261 Merchandise inventory 4,589 3,578
Prepaid expenses and other current assets 729 1,465 Total current
assets 11,292 15,098 Property andequipment, net 62,556 46,693
Goodwill, net 6,886 6,886 Licensing agreement, net 3,338 3,258
Management contract, net 729 829 Long-term investments - 1,684
Other assets 3,863 3,407 Total assets $88,664 77,855 Liabilities
and Stockholders' Equity Current liabilities: Current portion of
long-term debt $2,121 1,157 Accounts payable and accrued expenses
10,685 8,851 Total current liabilities 12,806 10,008 Obligations
under capital lease 9,991 - Long-term debt, net of current portion
6,099 8,232 Deferred rent 6,008 5,209 Total liabilities 34,904
23,449 Stockholders' equity: Common stock (par value $.01;
authorized 40,000,000 shares; 9,376,249 and 9,354,266 shares issued
and outstanding at December 29, 2003 and December 30, 2002,
respectively) 94 94 Additional paid-in capital 69,940 69,854
Accumulated deficit (16,213) (15,491) Accumulated other
comprehensive loss (61) (51) 53,760 54,406 Total liabilities and
stockholders' equity $88,664 77,855 DATASOURCE: Smith &
Wollensky Restaurant Group, Inc. CONTACT: Lauren Felice of RFBinder
Partners, +1-212-994-7541, or , for Smith & Wollensky
Restaurant Group, Inc. Web site: http://www.smithandwollensky.com/
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