RUBIO'S RESTAURANTS, INC. 
By
First Quarter Results
-- Revenues rose 2.9% to $42.2 million from $41.0 million for the 13-week
quarter in 2007.
-- Comparable store sales decreased 3.3%.
-- Net loss was $(745,000) as compared to net income of $196,000 for the
same quarter last year.
-- Earnings per share was a loss of $(0.07) per share as compared to
earnings per share of $0.02 for the same quarter last year.
-- Restaurant operating margins (see definition below) were 13.7% as
compared to 15.3% for the same quarter last year. As a percentage of
restaurant sales, restaurant labor decreased by 30 basis points;
however, cost of sales increased by 50 basis points and restaurant
occupancy and other costs rose by 140 basis points, due to higher
advertising, rent and utilities costs.
-- Pre-opening expense increased to $219,000 as compared to zero for the
same quarter last year, due to the opening of 7 restaurants thus far in
2008 as compared to none during the first five months of 2007.
-- General and administrative expenses were $4.6 million in the first
quarter of 2008 compared to $3.8 million in the first quarter of 2007.
The increase in the 2008 quarter is primarily due to the addition of
senior executives, legal costs and $139,000 in costs associated with
our decision to cancel our plans to build restaurants on sites that
included four in developing trade areas in Northern California. These
sites were located in trade areas that were experiencing rapid growth
prior to the sub-prime mortgage crisis, however, that growth has been
severely curtailed by the slow down in housing.
-- Adjusted EBITDA (see table below) decreased 50.1% to $1.4 million from
$2.8 million for the same quarter last year.
-- Average unit volumes for the trailing 52 weeks were $1,026,000 as
compared to $1,002,000 for the same quarter last year.
"Our first quarter results are indicative of the overall challenging
macroeconomic environment, and in particular, higher gasoline prices and the
weak housing markets in
"We continue to focus on mature trade areas and look for attractive long-term opportunities in the softening real estate market. We've opened 7 restaurants in 2008 and currently have 3 more under construction, which puts us well on our way to meeting our 2008 growth target. While these economic times are tough, I remain optimistic about Rubio's longer term success and will be seeking to gain share with new units."
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 as a measure of operating performance and in our evaluation of funding requirements for future development and other needs. We calculate Adjusted EBITDA as net income (loss) plus (less) income tax expense (benefit), less other income, plus loss on disposal/sale of property, plus store closure expense or less store closure reversal, plus depreciation and amortization, plus stock compensation expense.
The differences between Adjusted EBITDA and GAAP net income (loss) for the first quarter of 2008 and 2007 are as follows:
13 weeks 13 weeks
ended ended
3/30/08 4/1/07
(in thousands)
Net income (loss) $(745) $196
Income tax expense (benefit) (497) 143
Other income (1) (103)
Loss on disposal/sale of property 104 18
Store closure reversal (91) 0
Depreciation and amortization 2,259 2,207
Share-based compensation expense 347 297
Adjusted EBITDA $1,376 $2,758
We believe these non-GAAP financial measures provide important supplemental information to investors. These measures should be used in addition to, and in conjunction with, results presented in accordance with GAAP. These measures should not be relied upon to the exclusion of our GAAP financial measures. We strongly encourage investors to review our financial statements in their entirety and to not rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
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, comparable store sales growth and
revenues, increased product costs, labor expenses and other restaurant costs,
the success of our promotions and marketing strategies, our ability to recruit
and retain qualified personnel, adverse effects of weather, adequacy of
reserves related to closed stores or stores to be sold, increased
depreciation, asset write downs, or implementation costs related to the
Rubio's marketing and concept positioning initiatives, our ability to manage
ongoing and unanticipated costs, such as costs to comply with the
Sarbanes-Oxley Act and other regulatory initiatives, litigation costs,
fluctuations in earnings growth on a quarterly basis, 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
RUBIO'S RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
For the Thirteen Weeks Ended
March 30, 2008 April 1, 2007
RESTAURANT SALES $42,121 $40,946
FRANCHISE AND LICENSING REVENUES 40 33
TOTAL REVENUES 42,161 40,979
COST OF SALES 12,286 11,761
RESTAURANT LABOR 13,868 13,583
RESTAURANT OCCUPANCY AND OTHER 10,202 9,325
GENERAL AND ADMINISTRATIVE EXPENSES 4,557 3,849
DEPRECIATION AND AMORTIZATION 2,259 2,207
PRE-OPENING EXPENSES 219 0
ASSET IMPAIRMENT AND STORE CLOSURE
REVERSAL (91) 0
LOSS ON DISPOSAL/SALE OF PROPERTY 104 18
OPERATING INCOME (LOSS) (1,243) 236
OTHER INCOME, NET 1 103
INCOME (LOSS) BEFORE INCOME TAXES (1,242) 339
INCOME TAX BENEFIT (EXPENSE) 497 (143)
NET INCOME (LOSS) $(745) $196
BASIC EPS DATA
EPS $(0.07) $0.02
AVERAGE SHARES OUTSTANDING 9,950 9,793
DILUTED EPS DATA
EPS $(0.07) $0.02
AVERAGE SHARES OUTSTANDING 9,950 9,833
Percentage of Total Revenues
For the Thirteen Weeks Ended
March 30, 2008 April 1, 2007
TOTAL REVENUES 100.0% 100.0%
COST OF SALES (1) 29.2% 28.7%
RESTAURANT LABOR (1) 32.9% 33.2%
RESTAURANT OCCUPANCY AND OTHER (1) 24.2% 22.8%
GENERAL AND ADMINISTRATIVE EXPENSES 10.8% 9.4%
DEPRECIATION AND AMORTIZATION 5.4% 5.4%
PRE-OPENING EXPENSES 0.5% 0.0%
ASSET IMPAIRMENT AND STORE CLOSURE
REVERSAL -0.2% 0.0%
LOSS ON DISPOSAL/SALE OF PROPERTY 0.2% 0.0%
OPERATING INCOME (LOSS) -2.9% 0.6%
OTHER INCOME, NET 0.0% 0.3%
INCOME (LOSS) BEFORE INCOME TAXES -2.9% 0.8%
INCOME TAX BENEFIT (EXPENSE) -1.2% 0.3%
NET INCOME (LOSS) -1.8% 0.5%
(1) As a percentage of restaurant sales
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 30, 2008 December 30, 2007
(unaudited)
CASH AND CASH EQUIVALENTS $1,589 $3,562
OTHER CURRENT ASSETS 11,108 11,663
PROPERTY - NET 42,708 40,916
LONG-TERM INVESTMENTS 3,143 3,069
OTHER ASSETS 12,606 11,858
TOTAL ASSETS $71,154 $71,068
CURRENT LIABILITIES $18,633 $18,199
OTHER LIABILITIES 8,844 8,794
STOCKHOLDERS' EQUITY 43,677 44,075
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $71,154 $71,068
Contact:
Frank Henigman,
Chief Financial Officer
760-929-8226
SOURCE Rubio's Restaurants, Inc.
