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May 17, 2002

USA: Benihana reports Q4 increase in net income

Miami-based Benihana Inc, operator of one of the largest chains of Asian restaurants in the US, has posted improved net income for the Q4 ended 31 March 2002, up 27.2% year on year to US$3.7m. Earnings per diluted share amounted to US$0.46 in the Q4 2002, based on 8 million shares and equivalents outstanding, which includes the public sale in December 2001 of 1 million Class A Common shares, and US$0.45 per diluted share on 6.4 million shares and equivalents in the year-earlier Q4. Q4 revenues amounted to US$42.9m, compared with US$42.2m in the corresponding year-earlier period, an increase of 1.6%. The Q4 a year ago included an additional week, which represented restaurant sales of US$3.2m.

Miami-based Benihana Inc, operator of one of the largest chains of Asian restaurants in the US, has posted improved net income for the Q4 ended 31 March 2002, up 27.2% year on year to US$3.7m.

Earnings per diluted share amounted to US$0.46 in the Q4 2002, based on 8 million shares and equivalents outstanding, which includes the public sale in December 2001 of 1 million Class A Common shares, and US$0.45 per diluted share on 6.4 million shares and equivalents in the year-earlier Q4. Q4 revenues amounted to US$42.9m, compared with US$42.2m in the corresponding year-earlier period, an increase of 1.6%. The Q4 a year ago included an additional week, which represented restaurant sales of US$3.2m.

Q4 2002 gross profit rose to US$32.2m, from US$31.1m in the year earlier period, with gross profit margins advancing to 75.6%, from 74.3%. Comparable restaurant sales rose 4.1%, compared with 2.1% in the preceding quarter, which was adversely impacted by 11 September. Restaurant operating profit for the Q4 was US$7.9m, compared with US$8m a year ago, due largely to a rise in labour and related costs, occupancy expenses, and higher depreciation and amortisation charges due to new restaurant openings and refurbishments.

Pre-tax profits advanced by 13.8%, rising to US$5.4m, from US$4.8m in the year-earlier period. Taxes were accrued at a 32.3% rate in the Q4 2002, versus 39.4% year on year. Restaurant profit margins decreased to 18.7%, compared with 19.1% a year ago. About US$3.5m in Q4 sales derived from five new restaurants opened this past year.

For the FY 2002, restaurant revenues amounted to US$171.5m, compared with US$163.2m in the previous 53-week fiscal year, an increase of 5.1%. Gross profit margins improved to 74.9% in FY 2002, up from 73.3% in FY 2001. FY restaurant operating profit was US$27.6m, compared with US$29.1m, reflecting a 10.7% increase in labour and related expenses due to new restaurant units and to the retention of employees following the 11 September slowdown. Net income amounted to US$8.8m, or US$1.28/diluted share, based on 6.9 million average shares and equivalents outstanding, compared with US$9.1m, or US$1.38/diluted share, on 6.6 million average shares and equivalents outstanding, in 2001.

In the Q1 this year, the company elected to effect early adoption of the provisions of SFAS 142, relating to elimination of amortisation of goodwill. In FY 2001 goodwill amortisation amounted to about US$0.9m, equal to US$0.13/diluted share, and for the Q4 2001 goodwill amortisation was US$0.2m, or US$0.03/diluted share; as a result of the adoption of the new accounting principle there was no goodwill amortisation in FY 2002.

Sequentially, Q4 sales increased 6.6%, net income increased 56.5% and diluted earnings per share increased 35.3% from the company’s Q3 2002 ended 6 January 2002.

“We are pleased with Benihana’s continued progress given the challenges faced during the 2002 fiscal year,” said president Joel A. Schwartz: “The Q4 results were in keeping with the fundamental growth trends of our business. Though this past year was a challenging one, our company dealt with it in an exemplary manner. We also successfully raised new equity capital, which, in addition to increasing market liquidity for our shares, helped to further enhance our already strong financial position. The outlook is very encouraging.”

Benihana now operates 61 restaurants nationwide, including 54 Benihana teppanyaki restaurants, five Haru sushi restaurants and two Doraku by Benihana restaurants. In addition, Benihana has 19 franchised teppanyaki restaurants operating and two additional franchised restaurants under development.

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