RUBIO'S RESTAURANTS, INC. 
By
Third Quarter Results
-- Revenues rose 6.9% to $47.0 million, from $44.0 million for the same
quarter last year.
-- Comparable store sales decreased 2.1%, versus a comparable store sales
increase of 7.1% for the same quarter last year. Transactions decreased
6.7% and check average increased 4.9% from the same quarter last year.
-- Net income increased 7.8% to $789,000 from $732,000 for the same
quarter last year.
-- Earnings per share were $0.08 per diluted share as compared to $0.07
per diluted share for the same quarter last year.
-- Restaurant operating margins (see definition below) increased 90 basis
points to 17.7%, from 16.8% for the same quarter last year. As a
percentage of restaurant sales, restaurant labor decreased by 80 basis
points and cost of sales decreased by 60 basis points, while restaurant
occupancy and other increased by 60 basis points.
-- Adjusted EBITDA (see table below) was $4.3 million as compared to $3.8
million for the same quarter last year, an increase of 11.1%.
-- Average unit volume for restaurants in our comp base for the trailing
52 weeks was $1,010,000.
Year-to-Date Results
-- Revenues rose 4.9% to $134.3 million, from $128.0 million for the same
three quarters last year.
-- Comparable store sales decreased 3.1%, versus a comparable store sales
increase of 7.7% for the same three quarters last year. Transactions
decreased 5.9% and check average increased 3.0% from the same three
quarters last year.
-- Net income was $379,000 as compared to net income of $1.4 million for
the same three quarters last year.
-- Earnings per share were $0.04 per diluted share as compared to $0.14
per diluted share for the same three quarters last year.
-- Restaurant operating margins (see definition below) decreased 20 basis
points to 16.2% from 16.4% for the comparable period last year. As a
percentage of restaurant sales, restaurant labor decreased by 70 basis
points and cost of sales remained consistent, while restaurant
occupancy and other increased by 90 basis points.
-- Adjusted EBITDA (see table below) was $9.0 million as compared to $9.8
million for the same three quarters of last year, a decrease of 8.1%.
"We are encouraged by our third quarter results, which were highlighted by
increased quarter-over-quarter EPS, restaurant operating margins and adjusted
EBITDA, despite the continued macro-economic challenges. The enhanced menu we
introduced in July, which includes our new Grilled Gourmet Tacos, demonstrates
our commitment to delivering a wide variety of unique and delicious menu items
and an extraordinary guest experience. We believe Rubio's food is priced to
provide exceptional value for the quality of the ingredients. As I stated
last quarter, we believe we have made adjustments in our strategy to respond
to the challenges of the weak economy and have positioned Rubio's well for
when the economy improves," said
"On the Development front, we've now opened 16 restaurants in 2008 and have another unit under construction, which puts us right at our revised growth target. While we have more than 30 sites identified for next year, we are mindful of the challenges our economy faces. Consequently, we will take a disciplined approach and limit the number of binding lease agreements we sign each quarter to limit our exposure in this difficult economy. We are targeting 20 new units in 2009 as we continue to focus exclusively on mature trade areas that have not been as hard-hit by the sub-prime mortgage crisis and we're opportunistically looking for attractive opportunities in existing buildings given in the softening real estate market, rather than focusing on new developments."
Non-GAAP Term Definitions
Regulation G, "Disclosure of Non-GAAP Financial Measures," and other provisions of the Securities Exchange Act of 1934, as amended, define and prescribe the conditions for use of certain non-GAAP financial information. We provide two Non-GAAP financial measures: "restaurant operating margins" and "Adjusted EBITDA."
We use restaurant operating margins to evaluate the performance of our restaurants. We calculate restaurant operating margins by dividing restaurant sales less cost of sales, restaurant labor and restaurant occupancy and other by restaurant sales.
We also provide Adjusted EBITDA, which is not a recognized term under GAAP and does not purport to be an alternative to income from operations or net income or a measure of liquidity. We use Adjusted EBITDA in our evaluation of funding requirements for future development and other needs. We calculate Adjusted EBITDA as net income plus income tax expense, less other income, plus loss on disposal/sale of property, plus store closure reserve, plus depreciation and amortization and plus share-based compensation expense.
The differences between Adjusted EBITDA and GAAP net income for the third quarter and year-to-date are as follows:
13 weeks 13 weeks 39 weeks 39 weeks
ended ended ended ended
9/28/08 9/30/07 9/28/08 9/30/07
(in thousands) (in thousands)
Net income $789 $732 $379 $1,430
Income tax expense 413 608 160 1,088
Other expense (income) 42 (90) 73 (289)
Loss on disposal/sale of
property 57 66 219 116
Store closure reversal -- (19) (46) (19)
Depreciation and
amortization 2,420 2,212 7,011 6,619
Share-based compensation 529 315 1,239 889
Adjusted EBITDA $4,250 $3,824 $9,035 $9,834
Conference Call
The Company will host a conference call on
About Rubio's(R) Restaurants, Inc. (NASDAQ: RUBO)
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Safe Harbor Disclosure
Some of the information in this press release or the related conference
call may contain forward-looking statements regarding future events or the
future financial performance of the Company. Please note that any statements
that may be considered forward-looking are based on projections; that any
projections involve judgment, and that individual judgments may vary.
Moreover, these projections are based only on limited information available to
us now, which is subject to change. Although those projections and the factors
influencing them will likely change, we are under no obligation to inform you
if they do. Actual results may differ substantially from any such forward
looking statements as a result of various factors, many of which are beyond
our control, including, among others, our comparable store sales results and
revenues, our product, labor expenses and other restaurant costs, the success
of our promotions, new product offerings and marketing strategies, our ability
to recruit and retain qualified personnel, adverse effects of weather, the
adequacy of our reserves related to closed stores or stores to be sold,
increased depreciation or asset write downs, our ability to manage ongoing and
unanticipated costs, such as costs to comply with regulatory initiatives and
litigation costs, our ability to implement a franchise strategy, our ability
to open additional or maintain existing restaurants in the coming periods, our
ability to finalize our settlement of the wage and hour class action lawsuits
filed in
Contact:
Frank Henigman,
Chief Financial Officer
760-929-8226
RUBIO'S RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
For the Thirteen For the Thirty-Nine
Weeks Ended Weeks Ended
September 28, September 30, September 28, September 30,
2008 2007 2008 2007
RESTAURANT SALES $46,938 $43,906 $134,167 $127,853
FRANCHISE AND
LICENSING REVENUES 74 87 153 168
TOTAL REVENUES 47,012 43,993 134,320 128,021
COST OF SALES 13,262 12,706 38,524 36,724
RESTAURANT LABOR 14,330 13,756 42,298 41,117
RESTAURANT OCCUPANCY
AND OTHER 11,056 10,082 31,653 29,067
GENERAL AND
ADMINISTRATIVE
EXPENSES 4,513 3,762 13,561 11,840
DEPRECIATION AND
AMORTIZATION 2,420 2,212 7,011 6,619
PRE-OPENING EXPENSES 130 178 488 328
STORE CLOSURE REVERSAL 0 (19) (46) (19)
LOSS ON DISPOSAL/SALE
OF PROPERTY 57 66 219 116
OPERATING INCOME 1,244 1,250 612 2,229
OTHER (EXPENSE)
INCOME (42) 90 (73) 289
INCOME BEFORE INCOME
TAXES 1,202 1,340 539 2,518
INCOME TAX EXPENSE 413 608 160 1,088
NET INCOME $789 $732 $379 $1,430
BASIC EPS DATA
EPS $0.08 $0.07 $0.04 $0.14
AVERAGE SHARES
OUTSTANDING 9,951 9,937 9,951 9,868
DILUTED EPS DATA
EPS $0.08 $0.07 $0.04 $0.14
AVERAGE SHARES
OUTSTANDING 9,951 10,019 9,951 9,958
Percentage of Total Percentage of Total
Revenues Revenues
For the Thirteen For the Thirty-Nine
Weeks Ended Weeks Ended
September 28, September 30, September 28, September 30,
2008 2007 2008 2007
TOTAL REVENUES 100.0% 100.0% 100.0% 100.0%
COST OF SALES(1) 28.3% 28.9% 28.7% 28.7%
RESTAURANT LABOR(1) 30.5% 31.3% 31.5% 32.2%
RESTAURANT
OCCUPANCY AND
OTHER(1) 23.6% 23.0% 23.6% 22.7%
GENERAL AND
ADMINISTRATIVE
EXPENSES 9.6% 8.6% 10.1% 9.2%
DEPRECIATION AND
AMORTIZATION 5.1% 5.0% 5.2% 5.2%
PRE-OPENING EXPENSES 0.3% 0.4% 0.4% 0.3%
STORE CLOSURE
REVERSAL 0.0% 0.0% 0.0% 0.0%
LOSS ON DISPOSAL/
SALE OF PROPERTY 0.1% 0.2% 0.2% 0.1%
OPERATING INCOME 2.6% 2.8% 0.5% 1.7%
OTHER (EXPENSE)
INCOME 0.0% 0.2% -0.1% 0.2%
INCOME BEFORE
INCOME TAXES 2.6% 3.0% 0.4% 2.0%
INCOME TAX EXPENSE 0.9% 1.4% 0.1% 0.8%
NET INCOME 1.7% 1.7% 0.3% 1.1%
(1) As a percentage of restaurant sales
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 28, 2008 December 31, 2007
(unaudited)
CASH AND SHORT-TERM INVESTMENTS $6,069 $3,562
OTHER CURRENT ASSETS 10,347 11,663
PROPERTY - NET 44,632 40,916
LONG-TERM INVESTMENTS -- 3,069
OTHER ASSETS 10,772 11,858
TOTAL ASSETS $71,820 $71,068
CURRENT LIABILITIES $17,502 $18,199
OTHER LIABILITIES 8,638 8,794
STOCKHOLDERS' EQUITY 45,680 44,075
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $71,820 $71,068
SOURCE Rubio's Restaurants, Inc.
