Benihana Inc – ‘8-K’ for 11/18/05 – EX-99.1

On:  Friday, 11/18/05, at 7:31am ET   ·   For:  11/18/05   ·   Accession #:  1157523-5-10312   ·   File #:  0-26396

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Benihana Incorporated 8K                               2     10K 
 2: EX-99.1     Miscellaneous Exhibit                                 10±    36K 

EX-99.1   —   Miscellaneous Exhibit

                                                                    Exhibit 99.1

Benihana Inc. Reports Increase of 71.3% in Net Income on 13.5%          
Rise in Total Revenues for Second Quarter           

MIAMI--(BUSINESS WIRE)--Nov. 18, 2005--Benihana Inc. (the               
"Company") (NASDAQ:BNHNA and BNHN), operator of the nation's largest            
chain of Japanese theme and sushi restaurants reported strong gains in          
operating results for the second fiscal quarter (twelve weeks) ended            
October 9, 2005, reflecting exceptional customer traffic increases at           
its teppanyaki and RA Sushi restaurants.                                        

--  Second fiscal quarter restaurant sales increased to $54.3           
million, $6.5 million, or 13.5%, greater than for the           
comparable fiscal quarter a year ago.                           

--  Gross profit for the quarter rose 14.5%, to $41.4 million,          
compared with $36.1 million a year ago, and gross margins       
advanced to 76.3%, from 75.6% a year ago.                       

--  During the second fiscal quarter, restaurant operating profit       
increased 24%, to $9.6 million, compared to $7.7 million a      
year ago, with ROP margins equaling 17.6%, compared to 16.2% a  
year ago. Favorable commodities costs were a contributing       
factor.                                                         

--  Comparable sales for the quarter, as previously reported,           
increased nearly 8%, lifting total sales by $3.7 million from   
the year ago fiscal quarter.                                    

--  Operating earnings for the quarter were $4.7 million and            
increased by 69.1% from the second fiscal quarter a year ago,   
while earnings before income taxes and minority interest        
increased 74.4%, to $4.7 million.                               

--  Fiscal second quarter net income increased to $2.8 million,         
from $1.7 million in the corresponding year-ago fiscal          
quarter, a gain of 71.3%                                        

--  Diluted earnings per share for the quarter amounted to $0.21        
per share, compared with $0.16 last year, a 31.3% gain.         

"Several factors contributed to our continuing strong                   
performance," said Joel A. Schwartz, CEO and President. "The                    
impressive gain in comparable sales represents increased customer               
traffic and is among the highest in the casual dining segment.                  
Although recently we have seen lackluster consumer confidence                   
statistics, consumers are seeking quality Asian food in a fun                   
environment. Each of our restaurant concepts offers what our customers          
want when they dine out. Commodity costs remained favorable, and                
leverage on fixed costs benefited from both increased labor                     
productivity and greater sales volume. These factors combined to                
result in a significant profit gain for the quarter. With our                   
expansion program, and especially the accelerated unit growth for RA            
Sushi units, we believe the outlook for this year and beyond is                 
exceedingly favorable."                                                         
As a percentage of restaurant sales, marketing, general and             
administrative expenses improved to 9.3%, compared with 10.4% a year            
ago. Total operating expenses, similarly amounted to 92.0% and 94.8%            
respectively, an improvement of 280 basis points. Operating earnings            
for the quarter rose 69.1%, to $4.7 million, and earnings before                
income taxes and minority interest advanced 74.4%, to $4.7 million.             
Hurricanes Katrina and Rita caused 22 days of lost revenue during       
the quarter. Hurricane Wilma, which resulted in power outages and               
limited water supplies, affected four Benihana teppanyaki restaurants           
in late October for a total of 28 days, during the third fiscal                 
quarter. The corporate offices were closed for three days.                      
Comparable sales for the second fiscal quarter reflected an             
increase of 6.4% at the Benihana teppanyaki restaurants, where traffic          
gained 3%; a rise of 29.8% at RA Sushi, which experienced a traffic             
increase of 27%; and a 1.7% increase at Haru, where traffic was off             
3%.                                                                             
The consolidated sales gains this year reflected a $3.7 million         
increase from comparable sales, $2.4 million from new and acquired (in          
Alaska) units, minus approximately $1.1 million from closed units and           
those temporarily closed, offset by $1.6 million from last year's               
temporary closures. Operating profits reflected a write-down of assets          
of Short Hills, NJ, as a direct result of the remodeling underway at            
that restaurant.                                                                
For the year to date, restaurant sales totaled $127.9 million,          
compared to $112.7 million in the corresponding first half of last              
year, a gain of 13.4%. Gross profit increased to $97.0 million, from            
$83.8 million, up 15.8%, with restaurant operating profits rising to            
$23.0 million, 34.3% greater than a year ago. First fiscal half net             
income increased 105.5%, to $7.3 million, or $0.66 per fully diluted            
share, compared with $3.6 million, or $0.35 per diluted share a year            
ago.                                                                            
As previously announced, the Company completed the second and           
final tranche involving $10 million aggregate principal amount of its           
Series B Convertible Preferred Stock (the "Preferred Stock") sold to            
BFC Financial Corporation, on August 4, 2005. The proceeds from the             
sale provide funding necessary to execute the business plan consisting          
of the remodeling, acquisition and development of our restaurants.              
Since the Preferred Stock is convertible into Common Stock at a                 
conversion price of $19.00 per share and the Common Stock was trading           
at $20.00 per share on the closing date, a deemed dividend was                  
recognized on the beneficial conversion feature totaling $0.5 million           
for accounting purposes. The impact of the beneficial conversion                
feature on diluted earnings per share amounted to $0.05 during the              
quarter ended October 9, 2005.                                                  
Benihana Inc. currently has under development eight restaurants         
consisting of two Benihana teppanyaki restaurants in Coral Gables and           
Miramar, Florida, and six RA Sushi restaurants in Houston, Texas;               
Lombard and Glenview, Illinois; Palm Beach Gardens, Florida;                    
Huntington Beach, California and Tustin, California.                            

Fiscal 2006 Third Quarter Outlook                                       

There will be more units temporarily closed for renovations in the      
third fiscal quarter this year, than in the preceding quarter and the           
year-ago period, including Short Hills and Cleveland. The temporary             
closures will be partially offset by sales at our recently acquired             
teppanyaki restaurant in Tucson, Arizona.                                       
With approximately 8% increase in average shares outstanding, per       
fully diluted share net income for the fiscal 2006 third quarter is             
expected to approximate $0.25. This would compare to $0.20 per fully            
diluted share in the corresponding year-ago period, when the Company            
incurred approximately $1.2 million, or $0.08 per share, from                   
BOT-related litigation expenses and proxy contest costs.                        

About Benihana                                                          

Benihana, now in its 41st year operates 73 restaurants nationwide,      
including 57 Benihana teppanyaki restaurants, seven Haru sushi                  
restaurants, eight RA Sushi Bar Restaurants and one Doraku restaurant.          
Under development at present are eight restaurants - two Benihana               
teppanyaki restaurants and six RA Sushi restaurants. In addition, a             
total of 23 franchised Benihana teppanyaki restaurants are now open or          
under development in the U.S. and Latin America.                                

Statements in this press release concerning the Company's business      
outlook or future economic performance, anticipated profitability,              
revenues, expenses or other financial items, together with other                
statements that are not historical facts, are "forward-looking                  
statements" as that term is defined under Federal Securities Laws.              
"Forward-looking statements" are subject to risks, uncertainties and            
other factors that could cause actual results to differ materially              
from those stated in such statements. Such risks, uncertainties and             
factors include, but are not limited to, changes in customers' tastes           
and preferences, acceptance of the Company's concepts in new                    
locations, obtaining qualified personnel, industry cyclicality,                 
fluctuations in customer demand, the seasonal nature of the business,           
fluctuations of commodities costs, the ability to complete                      
construction of new units in a timely manner, obtaining governmental            
permits on a reasonably timely basis, and general economic conditions,          
as well as other risks detailed in the Company's filings with the               
Securities and Exchange Commission. The Company disclaims any                   
obligations to update any forward-looking statement as a result of              
developments occurring after the date of this press release, including          
the litigation commenced by Benihana of Tokyo, Inc.                             

Benihana Inc. and Subsidiaries                                                  
Condensed Consolidated Statements of Earnings                                   
(Unaudited)                                                                     
(in thousands except per share data)                                            

       Three Periods Ended
       -------------------

                        9-Oct-05 10-Oct-04 $ Change % Change
                        ------------------------------------

Revenues                                                                        
Restaurant sales                   $54,274   $47,801  $6,473     13.5%          
Franchise fees and royalties           348       309      39     12.6%          
                        ------------------------------------
Total revenues                      54,622    48,110   6,512     13.5%          
                        ------------------------------------

Costs and Expenses                                                              
Cost of food and beverage sales     12,890    11,652   1,238     10.6%          
Restaurant operating expenses       31,810    28,425   3,385     11.9%          
Restaurant opening costs               190       299    -109    -36.5%          
Marketing, general and                                                          
administrative expenses             5,022     4,949      73      1.5%         
                        ------------------------------------
Total operating expenses            49,912    45,325   4,587     10.1%          
                        ------------------------------------

Earnings from operations             4,710     2,785   1,925     69.1%          
Interest (income) expense, net         -21        72     -93   -129.2%          
                        ------------------------------------

Earnings before income taxes and                                                
minority interest                   4,731     2,713   2,018     74.4%         
Income tax provision                 1,760       902     858     95.1%          
                        ------------------------------------

Earnings before minority interest    2,971     1,811   1,160     64.1%          
Minority interest                      126       150     -24    -16.0%          
                        ------------------------------------

Net income                           2,845     1,661   1,184     71.3%          
Less: accretion of issuance costs                                               
and preferred stock dividends         752       132     620    469.7%         
                        ------------------------------------

Net income attributable to common                                               
stockholders                       $2,093    $1,529    $564     36.9%         
                        ====================================

Earnings Per Share                                                              
Basic earnings per common share      $0.22     $0.17   $0.05     29.4%          
                        ====================================
Diluted earnings per common share    $0.21     $0.16   $0.05     31.3%          
                        ====================================

Weighted Average Shares                                                         
Outstanding                                                                   
Basic                                9,319     9,154     165      1.8%          
                        ====================================
Diluted                             10,478    10,266     212      2.1%          
                        ====================================

Benihana Inc. and Subsidiaries                                                  
Condensed Consolidated Statements of Earnings                                   
(Unaudited)                                                                     
(in thousands except per share data)                                            

       Seven Periods Ended
       -------------------

                        9-Oct-05 10-Oct-04 $ Change % Change
                        ------------------------------------

Revenues                                                                        
Restaurant sales                  $127,891  $112,735 $15,156     13.4%          
Franchise fees and royalties           796       766      30      3.9%          
                        ------------------------------------
Total revenues                     128,687   113,501  15,186     13.4%          
                        ------------------------------------

Costs and Expenses                                                              
Cost of food and beverage sales     30,846    28,931   1,915      6.6%          
Restaurant operating expenses       74,081    66,708   7,373     11.1%          
Restaurant opening costs               479       553     -74    -13.4%          
Marketing, general and                                                          
administrative expenses            11,278    11,280      -2      0.0%         
                        ------------------------------------
Total operating expenses           116,684   107,472   9,212      8.6%          
                        ------------------------------------

Earnings from operations            12,003     6,029   5,974     99.1%          
Interest expense, net                   96       186     -90    -48.4%          
                        ------------------------------------

Earnings before income taxes and                                                
minority interest                  11,907     5,843   6,064    103.8%         
Income tax provision                 4,260     1,908   2,352    123.3%          
                        ------------------------------------

Earnings before minority interest    7,647     3,935   3,712     94.3%          
Minority interest                      304       362     -58    -16.0%          
                        ------------------------------------

Net income                           7,343     3,573   3,770    105.5%          
Less: accretion of issuance costs                                               
and preferred stock dividends         929       158     771    488.0%         
                        ------------------------------------

Net income attributable to common                                               
stockholders                       $6,414    $3,415  $2,999     87.8%         
                        ====================================

Earnings Per Share                                                              
Basic earnings per common share      $0.69     $0.37   $0.32     86.5%          
                        ====================================
Diluted earnings per common share    $0.66     $0.35   $0.31     88.6%          
                        ====================================

Weighted Average Shares                                                         
Outstanding                                                                   
Basic                                9,265     9,151     114      1.2%          
                        ====================================
Diluted                             10,244    10,073     171      1.7%          
                        ====================================

Benihana Inc. and Subsidiaries                                                  
Sales by Concept                                                                
(Unaudited)                                                                     
(in thousands)                                                                  

     Three Periods Ended
      --------------------

                        9-Oct-05 10-Oct-04 $ Change % Change
                       -------------------------------------

Total restaurant sales by                                                       
concept:                                                                      
Benihana                        $41,915   $38,616  $3,299      8.5%       
Haru                              6,497     5,222   1,275     24.4%       
RA Sushi                          5,404     3,633   1,771     48.7%       
Sushi Doraku                        458       330     128     38.8%       
                       -------------------------------------
Total restaurant sales             $54,274   $47,801  $6,473     13.5%          
                       =====================================

Comparable restaurant sales by                                                  
concept:                                                                      
Benihana                        $39,883   $37,479  $2,404      6.4%       
Haru                              5,310     5,222      88      1.7%       
RA Sushi                          4,716     3,633   1,083     29.8%       
Sushi Doraku                        458       330     128     38.8%       
                       -------------------------------------
Total comparable restaurant sales  $50,367   $46,664  $3,703      7.9%          
                       =====================================

     Seven Periods Ended
      --------------------

                        9-Oct-05 10-Oct-04 $ Change % Change
                       -------------------------------------

Total restaurant sales by                                                       
concept:                                                                      
Benihana                        $99,704   $91,097  $8,607      9.4%       
Haru                             14,731    12,322   2,409     19.6%       
RA Sushi                         12,441     8,534   3,907     45.8%       
Sushi Doraku                       1015       782     233     29.8%       
                       -------------------------------------
Total restaurant sales            $127,891  $112,735 $15,156     13.4%          
                       =====================================

Comparable restaurant sales by                                                  
concept:                                                                      
Benihana                        $95,327   $88,568  $6,759      7.6%       
Haru                             12,442    12,322     120      1.0%       
RA Sushi                         10,842     8,534   2,308     27.0%       
Sushi Doraku                       1015       782     233     29.8%       
                       -------------------------------------
Total comparable restaurant sales $119,626  $110,206  $9,420      8.5%          
                       =====================================

Benihana Inc. and Subsidiaries                                                  
Restaurant Operating Profit                                                     
(Unaudited)                                                                     
(in thousands)                                                                  

       Three Periods Ended
       -------------------

                        9-Oct-05 10-Oct-04 $ Change % Change
                        ------------------------------------

Restaurant sales                   $54,274   $47,801  $6,473     13.5%          
Cost of food & beverage sales       12,890    11,652   1,238     10.6%          
                        ------------------------------------
Gross profit                        41,384    36,149   5,235     14.5%          
                        ------------------------------------

Restaurant operating expenses:                                                  
Labor and related costs             18,317    16,994   1,323      7.8%          
Restaurant supplies                  1,129       920     209     22.7%          
Credit card discounts                  991       855     136     15.9%          
Utilities                            1,531     1,279     252     19.7%          
Occupancy costs                      3,327     2,860     467     16.3%          
Depreciation and amortization        2,439     2,132     307     14.4%          
Other restaurant operating                                                      
expenses                            4,076     3,385     691     20.4%         
                        ------------------------------------
Total restaurant operating                                                      
expenses                           31,810    28,425   3,385     11.9%         
                        ------------------------------------

Restaurant operating profit         $9,574    $7,724  $1,850     24.0%          
                        ====================================

       Seven Periods Ended
       -------------------

                        9-Oct-05 10-Oct-04 $ Change % Change
                        ------------------------------------

Restaurant sales                  $127,891  $112,735 $15,156     13.4%          
Cost of food & beverage sales       30,846    28,931   1,915      6.6%          
                        ------------------------------------
Gross profit                        97,045    83,804  13,241     15.8%          
                        ------------------------------------

Restaurant operating expenses:                                                  
Labor and related costs             43,611    40,144   3,467      8.6%          
Restaurant supplies                  2,577     2,169     408     18.8%          
Credit card discounts                2,327     2,008     319     15.9%          
Utilities                            3,303     2,837     466     16.4%          
Occupancy costs                      7,711     6,710   1,001     14.9%          
Depreciation and amortization        5,587     4,914     673     13.7%          
Other restaurant operating                                                      
expenses                            8,965     7,926   1,039     13.1%         
                        ------------------------------------
Total restaurant operating                                                      
expenses                           74,081    66,708   7,373     11.1%         
                        ------------------------------------

Restaurant operating profit        $22,964   $17,096  $5,868     34.3%          
                        ====================================

Benihana Inc. and Subsidiaries                                                  
Restaurant Operating Margins                                                    
(Unaudited)                                                                     

                                         Three Periods Ended
                                         -------------------
                                        9-Oct-05 10-Oct-04
                                         -------------------

Restaurant sales                                     100.00%   100.00%          
Cost of food and beverage sales                       23.75%    24.38%          
                                         -------------------
Gross profit margin                                   76.25%    75.62%          
                                         -------------------

Restaurant operating expenses:                                                  
Labor and related costs                               33.75%    35.55%          
Restaurant supplies                                    2.08%     1.92%          
Credit card discounts                                  1.83%     1.79%          
Utilities                                              2.82%     2.68%          
Occupancy costs                                        6.13%     5.98%          
Depreciation and amortization                          4.49%     4.46%          
Other restaurant operating expenses                    7.51%     7.08%          
                                         -------------------
Total restaurant operating expenses                   58.61%    59.46%          
                                         -------------------

Restaurant operating profit margin                    17.64%    16.16%          
                                         ===================

                                         Seven Periods Ended
                                         -------------------
                                        9-Oct-05 10-Oct-04
                                         -------------------

Restaurant sales                                     100.00%   100.00%          
Cost of food and beverage sales                       24.12%    25.66%          
                                         -------------------
Gross profit margin                                   75.88%    74.34%          
                                         -------------------

Restaurant operating expenses:                                                  
Labor and related costs                               34.10%    35.61%          
Restaurant supplies                                    2.01%     1.92%          
Credit card discounts                                  1.82%     1.78%          
Utilities                                              2.58%     2.52%          
Occupancy costs                                        6.03%     5.95%          
Depreciation and amortization                          4.37%     4.36%          
Other restaurant operating expenses                    7.01%     7.03%          
                                         -------------------
Total restaurant operating expenses                   57.92%    59.17%          
                                         -------------------

Restaurant operating profit margin                    17.96%    15.17%          
                                         ===================

Benihana Inc. and Subsidiaries                                                  
Balance Sheet Data                                                              
(Unaudited)                                                                     

(in thousands)                                                                  

                                          9-Oct-05 27-Mar-05
                                          ------------------

Assets                                                                          
Cash and cash equivalents                            $16,833   $3,278           
Other current assets                                   9,635    9,625           
                                          ------------------
Total current assets                                  26,468   12,903           

Property and equipment, net                          110,445  108,132           
Goodwill                                              28,131   28,131           
Other assets                                           5,372    5,088           
                                          ------------------

                                         $170,416 $154,254
                                          ==================

Liabilities and Stockholders' Equity                                            
Current maturity of bank debt                         $3,333   $3,333           
Current maturity of capital leases                         0       26           
Other current liabilities                             21,693   23,082           
                                          ------------------
Total current liabilities                             25,026   26,441           

Long-term debt--bank                                   4,167    6,667           
Other liabilities                                      7,625    6,635           
                                          ------------------
Total liabilities                                     36,818   39,743           

Minority interest                                      2,303    1,999           
Convertible preferred stock                           19,233    9,305           
Total stockholders' equity                           112,062  103,207           
                                          ------------------

                                         $170,416 $154,254
                                          ==================

CONTACT: Benihana Inc.                                                  
Joel A. Schwartz/Michael R. Burris, 305-593-0770      
OR                                                  
Corporate Relations:                                  
Anreder & Company                                     
Steven Anreder, 212-532-3232                          

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘8-K’ Filing		Date		Other Filings
Filed on / For Period End:		11/18/05		10-Q,  4
		10/9/05		10-Q
		8/4/05		4,  8-K
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