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Ralph Rubio, chairman and CEO, stated, "I am very pleased with our financial performance for the quarter. Our improved profitability is a direct result of focusing resources in our core markets. Even more importantly, I am very excited with the direction we are headed. We have made significant progress on our concept repositioning initiatives and feel the time is right to begin rolling these initiatives out to our system. We will begin implementing our menu upgrade in San Diego at the end of the third quarter and our first restaurant opening with the new prototype design is scheduled to open in October of this year."
The company also announced net income of $1,128,000, or $0.12 per share for the 13 weeks ended June 30th compared to net income of $798,000 or $0.09 per share for the same period a year ago. The earnings per share (EPS) of $0.12 exceeded the company's previously announced guidance of $0.08 - $0.10. Year-to-date net income increased to $1.6 million or $0.17 per share compared to $644,000 or $0.07 per share last year.
The company had no new restaurant openings in the second quarter. On April 15th, the company sold its four locations in the Las Vegas market to a franchisee. In addition, the first franchise location in the Portland, Ore., market was opened on April 25th. The company currently has no plans for new restaurant openings in the third quarter, but plans to open three to four company-owned locations in the fourth quarter of this year.
Looking forward, the company currently expects third quarter EPS in the $0.09 - $0.10 range with comparable stores sales increasing up to 1.0%. The third quarter EPS guidance of $0.09 - $0.10 includes the negative effect of approximately $0.01 - $0.02 due to one-time expenses related to the menu upgrade. The company expects full-year 2002 EPS in the $0.24 - $0.27 range, an increase over previously announced guidance of $0.22 - $0.25 per share.
The third quarter and full-year EPS estimates do not include any adjustments to the reserve for closed stores that was established during the last half of fiscal 2001. There are likely to be adjustments to the reserve as we sublease or otherwise terminate the closed store leases. These adjustments could have a significant positive or negative impact on overall EPS.