Landry’s Restaurants, Inc. (NYSE: LNY; the “Company”), today announced its results for the first quarter ended March 31, 2009.
Revenues from continuing operations for the three months ended March 31, 2009, totaled $256.3 million, as compared to $292.3 million a year earlier. Revenues from the restaurant and hospitality group were $200.3 million and $222.5 million for the first quarter of 2009 and 2008, respectively and $56.0 million and $69.8 million for the same periods from the Golden Nugget properties. The prior year results included an additional day due to leap year. Income from continuing operations for the quarter was $7.1 million, compared to $2.5 million reported last year. On a pre-tax basis, results for the first quarter included $7.5 million in reduced rent expense from a lease termination payment received to exit one location, $3.5 million representing a gain on insurance proceeds in excess of the book value of the damaged assets, a gain on the sale of property of $0.6 million partially offset by a $4.0 million expense for call premiums arising from the Company’s successful refinancing in February 2009 and $0.8 million in costs associated with the terminated going private transaction. In addition, the first quarter included a $0.4 million non-cash pre-tax gain on the value of interest rate swaps not designated as hedges as compared to a loss of $4.7 million during the same period in 2008. Same store sales for the Company’s restaurants were negative 9 percent for the quarter. Earnings per share-diluted from continuing operations for the quarter were $0.44, compared to $0.15 reported last year.
Interest expense for the first quarter of 2009 was $24.6 million, compared to $20.8 million in the first quarter of 2008 primarily due to higher borrowings associated with construction of the new tower at the Golden Nugget and higher interest rates resulting from the refinancing in 2009.
Adjusted EBITDA for the first quarter of 2009 was $52.4 million comprised of $39.9 million for the restaurant and hospitality group and $12.5 million from gaming operations compared to $46.7 million in the comparable prior year period with $28.5 million from restaurant and hospitality and $18.2 million from gaming. Excluding the non recurring items described above, adjusted EBITDA for the quarter would have been $45.5 million, as compared to $46.7 million in the same period in the prior year. Restaurant and hospitality would have contributed $33.0 million, compared to $28.5 million in the prior year while gaming operations contributed $12.5 million in the first quarter 2009 versus $18.2 million in the first quarter of 2008.
Rick Liem, executive vice president and CFO says, “Operating income from the restaurants and hospitality group held up well in the face of declining sales in a very difficult economic environment. Results from the gaming operations reflect lower traffic compounded by heightened competitive pressure, particularly on room rates. We will continue to manage our cost structure as we weather the current recessionary period.”
As a result of our 2006 sale of the Joe’s Crab Shack concept and closure of certain additional locations, the results of operations for these restaurants are reflected as discontinued operations in our financial statements. The loss from discontinued operations, net of taxes, for the quarter ended March 31, 2009 was $0.1 million or $0.00 per share–diluted compared to a loss of $0.9 million or $0.06 per share–diluted in the prior year. Therefore, the consolidated net income for the quarter was $7.1 million or $0.44 per share–diluted, compared to net income of $1.5 million or $.09 per share–diluted in the comparable period in 2008.
The company’s continuing operations include restaurants primarily under the trade names Landry’s Seafood House, Chart House, Rainforest Cafe, Saltgrass Steak House, and the Signature Group, as well as other businesses including hotels, marinas, amusements, retail, and the Golden Nugget Hotels and Casinos in Las Vegas and Laughlin, Nevada.
Adjusted EBITDA is not a generally accepted accounting principles (“GAAP”) measurement. The company defines adjusted EBITDA as earnings before interest income and expense, taxes, depreciation, amortization, non-cash gain or loss on interest rate swaps not deemed hedges, and non-cash stock based compensation expenses, and is presented solely as a supplemental disclosure because the Company believes that it is a widely used measure of operating performance in the restaurant and gaming industry. Adjusted EBITDA is not intended to be viewed as a source of liquidity or as a cash flow measure as used in the statement of cash flows. Adjusted EBITDA is simply shown above as it is a commonly used non-GAAP valuation statistic.