Financial and Operating Highlights
Revenue for the third quarter of fiscal 2009 decreased $15.5 million or 7.4 percent to $194.1 million, from $209.6 million in the third quarter of fiscal 2008. Same-store sales for the third quarter of 2009 declined 7.6 percent at O'Charley's company-operated restaurants, 7.1 percent at Ninety Nine Restaurants, and 17.1 percent at Stoney River Legendary Steaks.
Restaurant-level margins, which the Company defines as restaurant sales less cost of food and beverage, payroll and benefits costs, and restaurant operating costs increased to 14.2 percent of restaurant sales from 13.6 percent in the prior year quarter. Declines in food and beverage costs, and reductions in restaurant operating costs, were partially offset by the deleveraging impact of reduced sales on payroll and benefits costs.
Income from operations in the quarter was $0.3 million, and loss before income taxes was $2.1 million. In comparison, loss from operations in the prior year quarter, which included a goodwill impairment charge of $48.0 million, was $48.6 million, and the loss before income taxes was $53.0 million.
Results for the third quarter include an income tax expense of $0.1 million, resulting in a net loss attributable to common shareholders of $2.1 million, or $0.10 per diluted share. The tax provision for the quarter reflects adjustments to the Company's full-year projections, and the impact of these adjustments on valuation reserves and discrete items. In comparison, net loss attributable to common shareholders in the prior year third quarter was $66.8 million, or $3.29 per share, and included the impact of the goodwill impairment charge and a valuation allowance on the Company's deferred tax assets.
For the 40-week period ended October 4, 2009, revenue was $692.0 million, income from operations was $17.5 million, and net earnings available to common shareholders were $7.7 million, or $0.36 per diluted share. In comparison, for the prior year period revenue was $728.3 million, loss from operations was $39.6 million, and net loss attributable to common shareholders was $64.3 million, or $3.06 per diluted share.
During the quarter, the Company completed the previously-announced transaction to outsource food and supply distribution for Ninety Nine Restaurants, and received cash proceeds of approximately $7 million. At the end of the quarter, the Company had cash balances of $18.1 million.
Although current economic conditions continue to limit its ability to project future sales performance, the Company affirmed its previously-issued forecast for the fourth quarter of 2009, and stated that it expects total revenue of between $190 million and $195 million in the fourth quarter of 2009, and a loss from operations of between $1 million and $4 million.
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