Big Buck Brewery & Steakhouse, Inc., (Nasdaq: BBUC), today announced results for the second quarter and six months ended July 2, 2000. Results reflect all three of the Company’s Michigan locations in operation for the full periods. The reporting period end dates differ so as to include comparable weekends, when restaurants typically experience peak sales.
Summary of Second Quarter Financial Highlights
(unaudited; dollars in thousands except per share amounts)
Three Months Ended Six Months Ended
July 2, July 4, Change July 2, July 4, Change
2000 1999 2000 1999
Total Revenue $3,489 $3,255 + $7,130 $6,542 +
Restaurant Sales $3,397 $3,128 + $6,956 $6,294 +
Restaurant
Operating Income $221 $324 - $667 $721 +
Income (Loss)
From Operations $(172) $(176) - $(124) $(438) -
Net Loss $(669) $(377) + $(1,022) $(852) -
Net Loss Per
Common Share* $(0.12) $(0.07) + $(0.19) $(0.16) +
Wtd. Avg.
Shares
Outstanding 5,405,481 5,335,170 + 5,405,481 5,320,085 +
KEY DEVELOPMENTS
— Revenue increased 7.2 percent in 2Q 2000 and 9.0 percent for first six months of 2000.
— General and administrative expenses decreased 13.4 percent in 2Q 2000 and 20.2 percent for the first six months of 2000.
— Grapevine unit’s Grand Opening scheduled for September 2000.
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Second Quarter 2000 Results
Revenue increased 7.2 percent to $3,489,034 in second quarter 2000 from $3,255,414 in second quarter 1999 and increased 9.0 percent to $7,129,807 for the first six months of 2000 from $6,542,085 for the first six months of 1999. These increases reflect enhanced marketing efforts and unit level promotions during the first and second quarters of 2000.
Cost of sales, which consists of food, merchandise, and brewery supplies, increased 8.1 percent to $1,165,479 in second quarter 2000 compared to second quarter 1999, and increased 9.3 percent to $2,346,456 for the first six months of 2000 compared to the first six months of 1999. These increases were due principally to higher revenue. As a percentage of revenue, costs of sales increased to 33.4 percent in second quarter 2000 compared to 33.1 percent in second quarter 1999, an increase of 32.9 percent for the first six months of 2000 compared to 32.8 percent for the same period in 1999. As a percentage of revenue, the increases were the result of a higher percentage of the sales mix coming from food, which has a higher cost than beer and wine.
Restaurant salaries and benefits increased 9.6 percent to $1,117,884 in second quarter 2000 compared to second quarter 1999, and increased 8.0 percent to $2,170,888 for the first six months of 2000 compared to the first six months of 1999. The increases were due to higher staffing needs for hourly employees in existing units as a result of a higher sales volume.
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By GlobalDataOperating expenses, which include supplies, utilities, maintenance, and promotional costs (such as the Company’s successful Birthday Club, which provides customers a free steak dinner on their birthday), increased 26.0 percent to $794,303 in second quarter 2000 compared to second quarter 1999, and increased 24.1 percent to $1,565,864 for the first six months of 2000 compared to the first six months of 1999. As a percentage of revenue, operating expenses increased to 22.8 percent in second quarter 2000 as compared to 19.4 percent for second quarter 1999, and increased to 22.0 percent for the first six months of 2000 compared to 19.3 percent for the same period in 1999. The increases were due to the additional expenses of unit level promotions and marketing for the purposes of increasing revenue and building customer loyalty.
General and administrative expenses decreased 13.4 percent to $347,547 in second quarter 2000 compared to second quarter 1999, and decreased 20.2 percent to $744,459 for the first six months of 2000 compared to the first six months of 1999. As a percentage of revenue, these expenses decreased to 10.0 percent in second quarter 2000 compared to 12.3 percent for second quarter 1999, and decreased 10.4 percent for the first six months of 2000 compared to 14.3 percent for the same period in 1999. The decrease reflected management’s focus on reducing corporate overhead costs, including the elimination of certain corporate positions and the implementation of a salary reduction for corporate staff, as well as decreased professional fees and a higher sales volume.
Big Buck CEO Bill Rolinski Comments
Big Buck CEO Bill Rolinski remarked: “As our second quarter results show, Big Buck’s operating efficiency has continued to improve with the aid of the systems and procedures we’ve established to help better serve our large and growing customer base and leverage costs across multiple units. We continue to look at every element of our business and take active steps to improve our financial performance. These include management salary reductions, staff reductions and implementation of cost control initiatives when and where appropriate.”
Rolinski added, “A longstanding corporate goal has been to expand the Big Buck concept beyond Michigan in the year 2000. This ambitious objective is about to become an exciting reality in September, when we celebrate the grand opening of our 20,500-square-foot Grapevine, Texas unit, which is a key component in our quest to become a leader in the thriving domestic brewpub industry. The strength of our concept, loyalty of our customers, and dedication of our employees has proven to be a winning combination throughout our Michigan units and, we are confident, will continue to be an equally effective combination at Grapevine.”
About the Company
Big Buck Brewery & Steakhouse, Inc. develops and operates microbrewery restaurants. The Company currently operates Big Buck Brewery & Steakhouse restaurants in Gaylord, Grand Rapids and Auburn Hills, Michigan, offering casual dining featuring a high quality, moderately priced menu and a variety of award-winning craft-brewed beers. The Company’s common shares are listed on the Nasdaq SmallCap Market under the symbol “BBUC.”
Forward-Looking Statements
Some of the information contained in this news release includes forward- looking statements. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including the general economic climate; competition within the markets in which the Company’s restaurants operate; the availability of financing for expansion, operations and repayment of debt; the cost of property acquisition, construction and materials and other risks associated with the operation of restaurants, including risk that sales levels may be lower than projected or that operating costs may be greater than anticipated; joint ventures that are pursued by the Company may not be consummated for a variety of reasons, including the failure to reach agreement with other parties or the failure to obtain adequate financing; and the other risk factors set forth in the Company’s filings with the Securities and Exchange Commission.
For more information on Big Buck toll-free via fax, simply dial 1-800-PRO-INFO, follow the voice menu prompts and enter the symbol BBUC on any touch tone phone, or visit the Big Buck page on FRB’s web site at www.frbinc.com
Visit Big Buck at www.bigbuck.com
BIG BUCK BREWERY & STEAKHOUSE, INC.
Statement of Operations
(Unaudited)
Three Months Ended Six Months Ended
July 2,2000 July 4,1999 July 2,2000 July 4,1999
REVENUE:
Restaurant sales $3,396,724 $3,128,104 $6,956,256 $6,293,531
Wholesale beer and
gift shop sales 92,310 127,311 173,542 248,554
Total revenue 3,489,034 3,255,415 7,129,807 6,542,085
COSTS AND EXPENSES:
Cost of Sales 1,165,479 1,078,486 2,346,456 2,146,068
Restaurant salaries
and benefits 1,117,884 1,020,323 2,170,888 2,009,694
Operating expenses 794,303 630,156 1,565,864 1,261,323
Depreciation and
amortization 189,969 202,089 379,977 404,178
Total costs and
expenses 3,267,635 2,931,054 6,463,185 5,821,263
Restaurant operating
income 221,399 324,361 666,622 720,822
Preopening expenses 46,332 98,892 46,332 226,043
General and
administrative
expenses 347,547 401,507 744,459 932,644
Income (loss) from
operations (172,480) (176,038) (124,169) (437,865)
OTHER INCOME (EXPENSE):
Interest expense (372,488) (206,881) (734,187) (422,493)
Interest income and
other (133,390) 5,191 (172,658) 5,549
Other income
(expense), net (505,878) (201,690) (906,845) (416,944)
Minority interest
share of joint
venture 9,175 5 9,175 3,295
NET LOSS $(669,183) $(377,723) (1,021,839) (851,514)
BASIC AND DILUTED
NET LOSS PER
COMMON SHARE $(0.12) $(0.07) $(0.19) $(0.16)
WEIGHTED AVERAGE
SHARES OUTSTANDING 5,405,481 5,335,170 5,405,481 5,305,085
The accompanying notes are an integral part of these financial statements
BIG BUCK BREWERY & STEAKHOUSE, INC.
Balance Sheets
(Unaudited)
July 2, 2000 January 2, 2000
ASSETS
CURRENT ASSETS:
Cash $ 349,892 $ 369,228
Short-term investments 1,000,000 —
Accounts receivable 154,887 233,273
Inventories 230,549 235,671
Prepaids and other 278,913 318,775
Total current assets 2,014,241 1,156,947
PROPERTY AND EQUIPMENT, net 21,941,736 19,730,766
OTHER ASSETS, net 1,727,956 573,487
$25,683,933 $21,461,200
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $2,100,867 $2,152,242
Accrued expenses 448,631 451,855
Current maturities of long-term debt 2,618,401 2,487,246
Total current liabilities 5,167,899 5,091,343
LONG-TERM DEBT, less current maturities 11,212,939 6,721,083
Total liabilities 16,380,838 11,812,426
MINORITY INTEREST 436,884 147,340
SHAREHOLDERS’ EQUITY:
Common stock, $0.01 par value, 20,000,000
shares authorized; 5,405,481 and 5,405,481
shares issued and outstanding 54,055 54,055
Warrants 153,650 153,650
Additional paid-in capital 14,072,136 13,685,520
Accumulated deficit (5,413,630) (4,391,791)
Total shareholders’ equity 8,866,211 9,501,434
$25,683,933 $21,461,200
