O'Charley's Inc. (NASDAQ: CHUX) today reported operating results for the 12-week period ended July 10, 2011.
Financial and Operating Highlights
- The Company produced its first increase in quarterly revenue since the third quarter of 2007, up 1.2 percent to $193.3 million for the second quarter of 2011 from $190.9 million for the second quarter last year.
-
For the second consecutive quarter, comparable sales and guest counts
increased for all three restaurant concepts:
- O'Charley's comparable sales and guest counts for company-operated restaurants each increased 2.9 percent.
- Ninety Nine Restaurants' comparable sales and guest counts increased 3.3 percent and 3.6 percent, respectively.
- Stoney River Legendary Steaks' comparable sales and guest counts increased 6.3 percent and 8.4 percent, respectively.
- Restaurant-level margins declined to 12.5 percent of restaurant sales for the second quarter of 2011 from 14.5 percent for the same prior-year quarter, as food and beverage costs as a percentage of sales increased 210 basis points, primarily due to rising commodity costs.
- Income from operations was $0.7 million, or 0.4 percent of revenues, for the second quarter of 2011 compared with a loss from operations of $0.2 million, or 0.1 percent of revenue, for the second quarter of 2010. The second quarter of 2010 included severance and other charges of $2.4 million or 1.2 percent of revenues.
- Loss from continuing operations was $1.7 million, or $0.08 per diluted share, for the second quarter of 2011, down from a loss of $2.3 million, or $0.11 per diluted share, for the second quarter of 2010. Net loss was $1.8 million, or $0.09 per diluted share, for the second quarter of 2011, down from a net loss of $2.5 million, or $0.12 per diluted share, for the second quarter of 2010.
- Net cash provided by operating activities was $10.8 million for the first six months of 2011, and the Company had $34.6 million of cash and no drawings on its $45 million revolving credit facility at the quarter's end.
"Our strategies to return the Company to a path of consistent, profitable growth gained further traction in the second quarter, and we achieved an important milestone by producing increased total revenues for the quarter versus the same quarter in the previous year," commented David W. Head, president and chief executive officer of O'Charley's Inc. "This performance was driven by increased comparable sales at all three of our concepts. It is important to point out that our overall sales increased even with 12 fewer locations in operation in the second quarter this year versus last year.
"Our primary focus moving forward is to continue this momentum by building guest loyalty through high quality, great tasting food and superior service. Four consecutive quarters of increased comparable sales at Ninety Nine and Stoney River and two at O'Charley's, and continued significant increases in guest satisfaction scores at each concept, demonstrate that we can achieve this goal when we execute to the standards we have set for ourselves. Through successful execution, we can earn the opportunity to expand our focus to improving average check with menu alternatives and pricing.
"We do not underestimate the challenges to improving our performance given weak economic growth and high unemployment. We also continue to face rising commodity costs, which contributed to an increase in food and beverage cost for the second quarter. We are working hard to proactively address these pressures through menu development and engineering, labor management and other steps that will allow us to return to sustainable profitable growth. Through our company-wide commitment to exceeding our guests' expectations, we are confident we are revitalizing our prospects for growth and increased shareholder value into the future."
R. Jeffrey Williams Named Chief Financial Officer
The Company also today announced that it has named R. Jeffrey Williams as chief financial officer and treasurer. Mr. Williams, a certified public accountant, had been serving as interim chief financial officer and treasurer since December 2010, while also serving as chief accounting officer since February 2006 and corporate controller since February 2003. Mr. Williams also recently completed his Masters of Business Administration from Vanderbilt University's Owen Graduate School of Management. Prior to his position at O'Charley's, Mr. Williams served as corporate controller at The Krystal Company in Chattanooga, TN and various financial positions at Cracker Barrel Old Country Store in Lebanon, TN.
Mr. Head remarked, "Jeff has done a great job for us over the past eight months since assuming the responsibilities of CFO and treasurer on an interim basis. After conducting a comprehensive search of candidates, our Board determined that Jeff's 10-year record of accomplishments at O'Charley's, his intimate knowledge of the Company's operations, financials, people and growth strategies, and his long-term experience in a publicly traded restaurant company strongly differentiated his qualifications to handle his new position successfully. We look forward to his continuing contributions to the Company's long-term growth."
Financial Guidance
For the third quarter of 2011, which is a 12-week quarter, the Company's guidance includes: total revenues of between $185 million and $190 million; loss/income from operations of between a loss of $3 million and break-even; and adjusted EBITDA of between $6 million and $9 million. Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of adjusted EBITDA to income from operations is included with the supplementary information to this release. The Company also anticipates capital expenditures during 2011 of between $16 million and $18 million.
Conference Call
The Company will hold a conference call to discuss this release today at 9:00 a.m. Eastern Time. The number to call for this interactive teleconference is (480) 629-9692, and the confirmation pass code is 4459801. Please dial in 10 minutes prior to the beginning of the call. A telephonic replay of the conference call will be available through August 25, 2011, by dialing (303) 590-3030 and entering pass code 4459801. A live broadcast of the conference call will also be available online at the Company's web site, www.ocharleysinc.com, at the following link: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=82565&eventID=4164364 and will also be available at www.streetevents.com and www.earnings.com. An on-line replay of the call will be available at the same sites through August 25, 2011.
Safe Harbor Provisions
The forward looking statements in this press release and statements made by or on behalf of the Company relating hereto, including those containing words like "forecast," "expect," "project," "believe," "may," "could," "anticipate," and "estimate," are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.These forward-looking statements are subject to the finalization of the Company's second quarter financial and accounting procedures, and may be affected by certain risks and uncertainties, including, but not limited to, the deterioration in the United States economy and the related adverse effect on the Company's sales of decreased consumer spending; the Company's ability to achieve its internal forecasts of sales and profitability; the Company's ability to comply with the terms and conditions of its financing agreements; the Company's ability to maintain or increase operating margins and comparable sales at its restaurants; the effect that increases in food, labor, energy, interest costs and other expenses have on our results; the effect of increased competition; the Company's ability to sell or sublease closed restaurants and other surplus assets; and the other risks described in the Company's filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking statements included herein, you should not regard the inclusion of such information as a representation by us that our objectives, plans and projected results of operations will be achieved and the Company's actual results could differ materially from such forward-looking statements. The Company does not undertake any obligation to publicly release any revisions to the forward-looking statements contained herein to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.
About O'Charley's Inc.
O'Charley's Inc., headquartered in Nashville, Tennessee, is a multi-concept restaurant company that operates or franchises a total of 343 restaurants under three brands: O'Charley's, Ninety Nine Restaurant, and Stoney River Legendary Steaks. The O'Charley's concept includes 227 restaurants in 18 states in the Southeast and Midwest, including 221 company-owned and operated O'Charley's restaurants, and 6 restaurants operated by franchisees. The menu, with an emphasis on fresh preparation, features several specialty items, such as hand-cut and aged USDA choice steaks, a variety of seafood and chicken, freshly baked yeast rolls, fresh salads with special-recipe salad dressings and signature caramel pie. The Ninety Nine concept includes 106 restaurants throughout New England and upstate New York. Ninety Nine has earned a strong reputation as a friendly, comfortable place to gather and enjoy great American food and drink at a terrific price. The menu features a wide selection of appetizers, salads, sandwiches, burgers, entrees and desserts. The Stoney River Legendary Steaks concept includes 10 restaurants in six states in the Southeast and Midwest. This steakhouse concept appeals to both upscale casual-dining and fine-dining guests by offering high-quality food and attentive customer service typical of high-end steakhouses, but at more moderate prices.
O'Charley's Inc. and Subsidiaries | |||||||||||||||||||
Consolidated Statements of Operations (unaudited) | |||||||||||||||||||
12 Weeks Ended July 10, 2011 and July 11, 2010 | |||||||||||||||||||
All percentages shown as a percentage of total revenue unless indicated otherwise | |||||||||||||||||||
2011 | 2010 (2) | ||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||
Revenues: | |||||||||||||||||||
Restaurant sales | $ | 193,069 | 99.9 | % | $ | 190,679 | 99.9 | % | |||||||||||
Franchise and other revenue | 224 | 0.1 | % | 239 | 0.1 | % | |||||||||||||
193,293 | 100.0 | % | 190,918 | 100.0 | % | ||||||||||||||
Costs and expenses: | |||||||||||||||||||
Cost of food and beverage | 61,425 | 31.8 | % | 56,561 | 29.7 | % | |||||||||||||
Payroll and benefits | 67,475 | 34.9 | % | 67,103 | 35.2 | % | |||||||||||||
Restaurant operating costs | 39,946 | 20.7 | % | 39,446 | 20.7 | % | |||||||||||||
Cost of restaurant sales (1), excluding depreciation and amortization shown below | 168,846 | 87.5 | % | 163,110 | 85.5 | % | |||||||||||||
Advertising and marketing expenses | 8,119 | 4.2 | % | 7,869 | 4.1 | % | |||||||||||||
General and administrative expenses | 7,589 | 3.9 | % | 10,190 | 5.3 | % | |||||||||||||
Depreciation and amortization of property and equipment | 8,559 | 4.4 | % | 9,860 | 5.2 | % | |||||||||||||
Impairment and disposal charges, net | (523 | ) | -0.3 | % | 126 | 0.1 | % | ||||||||||||
192,590 | 99.6 | % | 191,155 | 100.1 | % | ||||||||||||||
Income (loss) from operations | 703 | 0.4 | % | (237 | ) | -0.1 | % | ||||||||||||
Other expense (income): | |||||||||||||||||||
Interest expense, net | 2,576 | 1.3 | % | 2,874 | 1.5 | % | |||||||||||||
Other, net | (1 | ) | 0.0 | % | (1 | ) | 0.0 | % | |||||||||||
2,575 | 1.3 | % | 2,873 | 1.5 | % | ||||||||||||||
Loss from continuing operations before income taxes | (1,872 | ) | -1.0 | % | (3,110 | ) | -1.6 | % | |||||||||||
Income tax benefit | (174 | ) | -0.1 | % | (852 | ) | -0.4 | % | |||||||||||
Loss from continuing operations | (1,698 | ) | -0.9 | % | (2,258 | ) | -1.2 | % | |||||||||||
Loss from discontinued operations, net | (145 | ) | -0.1 | % | (266 | ) | -0.1 | % | |||||||||||
Net loss | $ | (1,843 | ) | -1.0 | % | $ | (2,524 | ) | -1.3 | % | |||||||||
Net loss per share - basic and diluted | |||||||||||||||||||
Loss from continuing operations | $ | (0.08 | ) | $ | (0.11 | ) | |||||||||||||
Loss from discontinued operations, net | $ | (0.01 | ) | $ | (0.01 | ) | |||||||||||||
Net loss | $ | (0.09 | ) | $ | (0.12 | ) | |||||||||||||
Weighted-average common shares outstanding | 21,547 | 21,230 | |||||||||||||||||
(1) Percentages calculated as a percentage of restaurant sales. | |||||||||||||||||||
(2) Prior year results have been adjusted to reflect results from discontinued operations. |
O'Charley's Inc. and Subsidiaries | |||||||||||||||||||
Consolidated Statements of Operations (unaudited) | |||||||||||||||||||
28 Weeks Ended July 10, 2011 and July 11, 2010 | |||||||||||||||||||
All percentages shown as a percentage of total revenue unless indicated otherwise | |||||||||||||||||||
2011 | 2010 (2) | ||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||
Revenues: | |||||||||||||||||||
Restaurant sales | $ | 457,794 | 99.9 | % | $ | 457,446 | 99.9 | % | |||||||||||
Franchise and other revenue | 545 | 0.1 | % | 572 | 0.1 | % | |||||||||||||
458,339 | 100.0 | % | 458,018 | 100.0 | % | ||||||||||||||
Costs and expenses: | |||||||||||||||||||
Cost of food and beverage | 143,952 | 31.4 | % | 134,709 | 29.4 | % | |||||||||||||
Payroll and benefits | 158,341 | 34.6 | % | 159,940 | 35.0 | % | |||||||||||||
Restaurant operating costs | 92,416 | 20.2 | % | 93,130 | 20.4 | % | |||||||||||||
Cost of restaurant sales (1), excluding depreciation and amortization shown below | 394,709 | 86.2 | % | 387,779 | 84.8 | % | |||||||||||||
Advertising and marketing expenses | 19,224 | 4.2 | % | 19,542 | 4.3 | % | |||||||||||||
General and administrative expenses | 18,638 | 4.1 | % | 21,138 | 4.6 | % | |||||||||||||
Depreciation and amortization of property and equipment | 20,161 | 4.4 | % | 23,303 | 5.1 | % | |||||||||||||
Impairment and disposal charges, net | (361 | ) | -0.1 | % | 3,255 | 0.7 | % | ||||||||||||
Pre-opening costs | 0 | 0.0 | % | 7 | 0.0 | % | |||||||||||||
452,371 | 98.7 | % | 455,024 | 99.3 | % | ||||||||||||||
Income from operations | 5,968 | 1.3 | % | 2,994 | 0.7 | % | |||||||||||||
Other expense: | |||||||||||||||||||
Interest expense, net | 5,914 | 1.3 | % | 6,918 | 1.5 | % | |||||||||||||
Other, net | 3 | 0.0 | % | 1 | 0.0 | % | |||||||||||||
5,917 | 1.3 | % | 6,919 | 1.5 | % | ||||||||||||||
Income (loss) from continuing operations and before income taxes | 51 | 0.0 | % | (3,925 | ) | -0.9 | % | ||||||||||||
Income tax benefit | (136 | ) | 0.0 | % | (78 | ) | 0.0 | % | |||||||||||
Income (loss) from continuing operations | 187 | 0.0 | % | (3,847 | ) | -0.8 | % | ||||||||||||
Loss from discontinued operations, net | (248 | ) | -0.1 | % | (3,021 | ) | -0.7 | % | |||||||||||
Net loss | $ | (61 | ) | 0.0 | % | $ | (6,868 | ) | -1.5 | % | |||||||||
Net earnings (loss) per share - basic and diluted | |||||||||||||||||||
Earnings (loss) from continuing operations | $ | 0.01 | $ | (0.18 | ) | ||||||||||||||
Loss from discontinued operations | $ | (0.01 | ) | $ | (0.14 | ) | |||||||||||||
Net loss | $ | 0.00 | $ | (0.32 | ) | ||||||||||||||
Weighted-average common shares outstanding | 21,461 | 21,136 | |||||||||||||||||
(1) Percentages calculated as a percentage of restaurant sales. | |||||||||||||||||||
(2) Prior year results have been adjusted to reflect results from discontinued operations. |
O'Charley's Inc. | |||||||||||
Condensed Consolidated Balance Sheets (unaudited) | |||||||||||
At July 10, 2011 and December 26, 2010 | |||||||||||
2011 | 2010 | ||||||||||
(in thousands) | |||||||||||
Cash | $ | 34,595 | $ | 29,693 | |||||||
Other current assets | 34,808 | 33,050 | |||||||||
Property and equipment, net | 305,382 | 320,011 | |||||||||
Trade names and other intangible assets | 25,946 | 25,946 | |||||||||
Other assets | 11,426 | 14,041 | |||||||||
Total assets | $ | 412,157 | $ | 422,741 | |||||||
Current portion of long-term debt and capital leases | $ | 789 | $ | 1,710 | |||||||
Other current liabilities | 68,936 | 74,746 | |||||||||
Long-term debt and capitalized lease obligations, net of current portion | 116,841 | 117,164 | |||||||||
Other liabilities | 45,670 | 50,887 | |||||||||
Shareholders' equity | 179,921 | 178,234 | |||||||||
Total liabilities and shareholders' equity | $ | 412,157 | $ | 422,741 |
O'Charley's Inc. and Subsidiaries | |||||||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) | |||||||||||||
28 Weeks Ended July 10, 2011 and July 11, 2010 | |||||||||||||
2011 | 2010 | ||||||||||||
(In thousands) | |||||||||||||
Cash flows from operating activities | |||||||||||||
Net loss | $ | (61 | ) | $ | (6,868 | ) | |||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||
Depreciation and amortization | 20,161 | 23,566 | |||||||||||
Impairment and disposal charges, net | (686 | ) | 5,678 | ||||||||||
Share-based compensation | 1,562 | 2,211 | |||||||||||
Changes in assets and liabilities and other, net | (10,162 | ) | (1,403 | ) | |||||||||
Net cash provided by operating activities (1) | 10,814 | 23,184 | |||||||||||
Cash flows from investing activities | |||||||||||||
Additions to property and equipment | (6,503 | ) | (7,661 | ) | |||||||||
Proceeds from sale of assets and other, net | 1,391 | 1,132 | |||||||||||
Net cash used in investing activities (1) | (5,112 | ) | (6,529 | ) | |||||||||
Cash flows from financing activities | |||||||||||||
Payments on long-term debt and capitalized lease obligations | (961 | ) | (1,168 | ) | |||||||||
Repurchase of senior notes | - | (9,993 | ) | ||||||||||
Debt issuance costs | (25 | ) | (1,640 | ) | |||||||||
Proceeds from the exercise of stock options and issuances under CHUX Ownership Plan | 335 | 388 | |||||||||||
Shares tendered and retired for minimum tax withholdings | (165 | ) | (271 | ) | |||||||||
Other, net | 16 | 4 | |||||||||||
Net cash used in financing activities (1) | (800 | ) | (12,680 | ) | |||||||||
Increase in cash and cash equivalents | 4,902 | 3,975 | |||||||||||
Cash and cash equivalents at beginning of period | 29,693 | 21,880 | |||||||||||
Cash and cash equivalents at end of period | $ | 34,595 | $ | 25,855 | |||||||||
(1) Includes cash flows associated with discontinued operations. |
O'Charley's Inc. and Subsidiaries | ||||||||||||||||||||||
Financial and Other Information (unaudited) | ||||||||||||||||||||||
28 Weeks Ended July 10, 2011 and July 11, 2010 | ||||||||||||||||||||||
All percentages shown as percentage of restaurant sales | ||||||||||||||||||||||
12 weeks ended | 28 weeks ended | |||||||||||||||||||||
O'Charley's Concept: | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||||
Number of restaurants open at period end (1) | 221 | 234 | 221 | 234 | ||||||||||||||||||
Average check per guest (1) | $ | 12.72 | $ | 12.68 | $ | 12.54 | $ | 12.54 | ||||||||||||||
Average weekly sales per restaurant (1) | $ | 45,997 | $ | 43,640 | $ | 47,168 | $ | 45,424 | ||||||||||||||
Restaurant sales (millions) | $ | 122.0 | $ | 121.0 | $ | 291.9 | $ | 294.4 | ||||||||||||||
Costs and expenses: | ||||||||||||||||||||||
Cost of food and beverage | 32.1 | % | 29.5 | % | 31.9 | % | 29.4 | % | ||||||||||||||
Payroll and benefits | 34.8 | % | 35.3 | % | 34.4 | % | 34.8 | % | ||||||||||||||
Restaurant operating costs (2) | 20.8 | % | 20.4 | % | 19.7 | % | 19.7 | % | ||||||||||||||
Cost of restaurant sales | 87.7 | % | 85.2 | % | 86.0 | % | 83.9 | % | ||||||||||||||
Ninety Nine Concept: | ||||||||||||||||||||||
Number of restaurants open at period end | 106 | 113 | 106 | 113 | ||||||||||||||||||
Average check per guest | $ | 14.46 | $ | 14.49 | $ | 14.73 | $ | 14.55 | ||||||||||||||
Average weekly sales per restaurant | $ | 50,079 | $ | 47,355 | $ | 49,768 | $ | 47,077 | ||||||||||||||
Restaurant sales (millions) | $ | 63.7 | $ | 62.3 | $ | 147.7 | $ | 145.1 | ||||||||||||||
Costs and expenses: | ||||||||||||||||||||||
Cost of food and beverage | 30.8 | % | 29.3 | % | 29.9 | % | 28.8 | % | ||||||||||||||
Payroll and benefits | 36.0 | % | 35.8 | % | 35.8 | % | 36.3 | % | ||||||||||||||
Restaurant operating costs (2) | 20.4 | % | 21.2 | % | 21.3 | % | 21.7 | % | ||||||||||||||
Cost of restaurant sales | 87.2 | % | 86.3 | % | 87.0 | % | 86.8 | % | ||||||||||||||
Stoney River Concept: | ||||||||||||||||||||||
Number of restaurants open at period end | 10 | 11 | 10 | 11 | ||||||||||||||||||
Average check per guest | $ | 35.39 | $ | 36.13 | $ | 35.55 | $ | 36.94 | ||||||||||||||
Average weekly sales per restaurant | $ | 61,519 | $ | 55,720 | $ | 64,785 | $ | 58,162 | ||||||||||||||
Restaurant sales (millions) | $ | 7.4 | $ | 7.4 | $ | 18.2 | $ | 17.9 | ||||||||||||||
Costs and expenses: | ||||||||||||||||||||||
Cost of food and beverage | 36.7 | % | 36.3 | % | 36.5 | % | 35.7 | % | ||||||||||||||
Payroll and benefits | 27.4 | % | 27.3 | % | 27.4 | % | 26.6 | % | ||||||||||||||
Restaurant operating costs (2) | 20.9 | % | 21.0 | % | 19.7 | % | 20.6 | % | ||||||||||||||
Cost of restaurant sales | 85.0 | % | 84.6 | % | 83.6 | % | 82.9 | % | ||||||||||||||
(1) Excludes franchised restaurants, of which 6 were open in 2011 and 9 were open in 2010. | ||||||||||||||||||||||
(2) Includes rent: 100% of the Ninety Nine restaurant locations are leased (land or land and building) as compared to 57% for O'Charley's and 70% for Stoney River. |
O'Charley's Inc. and Subsidiaries | |||||||||||||||||||||
Calculation of Adjusted EBITDA (unaudited) (1) | |||||||||||||||||||||
A Non-GAAP Financial Measure | |||||||||||||||||||||
12 and 28 Weeks Ended July 10, 2011 and July 11, 2010 | |||||||||||||||||||||
(in thousands) | 12 Weeks | 28 Weeks | |||||||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||||||
Income (loss) from Operations | $ | 703 | $ | (237 | ) | $ | 5,968 | $ | 2,994 | ||||||||||||
Add: | |||||||||||||||||||||
Depreciation and amortization | 8,559 | 9,860 | 20,161 | 23,303 | |||||||||||||||||
Impairment and disposal charges, net (2) | (523 | ) | 126 | (361 | ) | 3,255 | |||||||||||||||
Share-based compensation expense (3) | 660 | 777 | 1,562 | 2,211 | |||||||||||||||||
Severance, recruiting and relocation expense (4) | - | 2,395 | 373 | 2,395 | |||||||||||||||||
Changes in deferred compensation balances (5) | 63 | (280 | ) | 264 | - | ||||||||||||||||
Adjusted EBITDA | $ | 9,462 | $ | 12,641 | $ | 27,967 | $ | 34,158 | |||||||||||||
Notes: | |||||||||||||||||||||
(1) | We present Adjusted EBITDA as a supplemental measure which we believe is indicative of our ongoing performance. We define Adjusted EBITDA as Income (Loss) from Operations plus (i) depreciation and amortization, (ii) impairment and disposal charges, net, (iii) share-based compensation expense, (iv) severance, recruiting and relocation expense for management changes and (v) changes in deferred compensation balances. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that it is reasonable to expect we will incur expenses that are the same as or similar to some of the adjustments in this presentation, but the amounts recognized can vary significantly from period to period, may not directly relate to the ongoing operations of our restaurants and complicate period comparisons of our results of operations and operations comparisons to other restaurant companies. | ||||||||||||||||||||
We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Also, our credit agreement uses measures similar to Adjusted EBITDA to measure our compliance with certain covenants. | |||||||||||||||||||||
(2) | Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Charges include the non-cash write-down of assets to their estimated recovery value as well as certain cash expenses related to the holding and disposition of assets no longer in service. Adjustments to expected lease obligations, net of sublease income, are also included and may result in the recognition of a gain or loss. | ||||||||||||||||||||
(3) | Includes charges relating to the discount on the Company's employee stock purchase plan and share-based compensation plans. | ||||||||||||||||||||
(4) | Includes cash and non-cash charges relating to significant organizational changes. | ||||||||||||||||||||
(5) | The Company sponsors a deferred compensation plan for certain management employees, which is fully funded with a "Rabbi Trust." Changes in the value of the employee's self-directed balances are reported in compensation expense, with an offsetting amount in interest expense, net. |
O?Charley?s Inc.
R. Jeffrey Williams, 615-782-8982
Chief
Financial Officer
or
Corporate Communications Inc.
Scott
Brittain, 615-254-3376, ext. 308