Industry News | August 8, 2008

Sbarro Revenues Rise Thanks to International Stores

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Revenues for Sbarro were $85.4 million for the quarter ended June 29, 2008, as compared to revenues of $82.6 million for the quarter ended July 1, 2007. The increase in revenues was generated by the new company owned and franchise stores that opened in 2007 and the first half of 2008. In addition, the company's comparable unit sales at its international franchise restaurants offset a slight decrease in comparable unit sales in our company owned and domestic franchise restaurants.

Net loss for the quarter ended June 29, 2008 was $5.0 million as compared to a net loss of $2.4 million for the quarter ended July 1, 2007.

EBITDA, as calculated in accordance with the terms of the company's bank credit agreement, was $5.5 million for the quarter ended June 29, 2008, as compared to $9.7 million for the quarter ended July 1, 2007. The decline in EBITDA is primarily a result of increased cost of products, in particular in the cost of cheese, flour, and pasta, as well as increased labor costs.

EBITDA, as calculated in accordance with the terms of the company's bank credit agreement, was $5.5 million for the quarter ended June 29, 2008, as compared to $9.7 million for the quarter ended July 1, 2007. The decline in EBITDA is primarily a result of the increased cost of products, in particular the cost of cheese, flour, and pasta, as well as increased labor costs.

EBITDA is a non-GAAP financial measure that management believes is an important metric for us to report to our investors, as we consider it a helpful additional indicator of our ability to meet future debt obligations and to comply with certain covenants in our borrowing agreements which are tied to this metric.