McCormick & Schmick’s Seafood Restaurants, Inc. Reports Fourth Quarter and Fiscal Year 2009 Financial Results

McCormick & Schmick’s Seafood Restaurants, Inc. (Nasdaq: MSSR) today reported financial results for its fourth quarter and fiscal year ended December 26, 2009.

Financial results for the fourth quarter 2009 compared to the fourth quarter 2008:

* Revenues decreased 9.7% to $89.2 million from $98.8 million

* Comparable restaurant sales decreased 12.9%

* Comparable restaurant traffic decreased 7.0%

* Total restaurant operating costs were 86.1% of revenues compared to 86.7%

* In the fourth quarter of 2009, a significant non-cash item in operating loss included an impairment of $19.8 million related to long lived assets that included eight of our restaurants. In the fourth quarter of 2008, significant non-cash items in operating loss included a $54.4 million charge related to the impairment of trademarks and tradenames, a $26.2 million charge related to the impairment of goodwill, a $2.8 million charge related to the impairment of long lived assets of two restaurants, and a $0.4 million write-off of a portion of previously capitalized transaction costs related to the Company’s credit agreement

* Net loss of $16.1 million, or $1.09 per basic and diluted share, compared to net loss of $73.4 million, or $4.99 per basic and diluted share

* Pro forma net income of $2.8 million, or $0.19 per diluted share (see attached reconciliation to GAAP), compared to a pro forma net income of $2.4 million, or $0.16 per diluted share

Financial results for fiscal year 2009 compared to fiscal year 2008:

* Revenues decreased 7.8% to $360.1 million from $390.7 million

* Comparable restaurant sales decreased 15.7%

* Comparable restaurant traffic decreased 14.0%

* Total restaurant operating costs were 87.6% of revenues compared to 87.5%

* In fiscal 2009, significant non-cash items in operating loss included impairment, restructuring, and other charges of $20.4 million and includes the impairment of long-lived assets at eight restaurants in the fourth quarter and restructuring charges recorded in the first three quarters of 2009. In fiscal 2008, significant non-cash items in operating loss included impairment and restructuring charges of $83.9 million, the impairment of trademarks and tradenames, goodwill, long-lived assets at two restaurants, and the write-off of a portion of previously capitalized transaction costs related to the Company’s credit agreement

* Net loss of $14.7 million, or $1.00 per basic and diluted share, compared to net loss of $69.6 million, or $4.73 per basic and diluted share

* Pro forma net income of $4.8 million, or $0.32 per diluted share (see attached reconciliation to GAAP), compared to a pro forma net income of $6.7 million, or $0.45 per diluted share

Bill Freeman, Chief Executive Officer, said, “I am pleased with our team’s performance in the fourth quarter. In light of a continuing difficult economic environment, our team was able to deliver better than expected operating results while achieving further improvement on our overall guest satisfaction scores. I am also encouraged by the positive response from our guests to the new strategic initiatives that we launched in 2009. Our results for 2009 reflect accounting related non-cash impairment charges that include the impairment of long lived assets at eight of our restaurants. We are continuing to focus on proactively improving our business at all of our restaurants, and have no plans to close any of the impaired restaurants.”

Outlook and 2010 Financial Guidance

Based on the Company’s revenue in 2009 and expectations that the economy will continue to be challenged for 2010, the Company expects its annual revenue for 2010 to be between $355.0 million and $365.0 million, and estimates earnings of $0.40 to $0.45 per fully diluted share.

The Company expects its annualized effective tax rate to be between 5.0% and 10.0% due to its projection of modest taxable income for the year in certain taxing jurisdictions and an insignificant change in net deferred tax assets.

The Company also expects 2010 depreciation and amortization of approximately $16.0 million, and general and administrative expenses to be between $20.0 million and $21.0 million.

In 2010, the Company plans to open two restaurants, the first in West Palm Beach, Florida, which opened in February and the second in Houston, Texas which is planned to open in the second quarter. Based on capital availability and depending on economic conditions, the Company may open additional restaurants in 2010.

Reader Comments:

Be the first to leave a comment for this article