EX-99.2 5 dex992.txt PRESS RELEASE DATED AUGUST 22, 2001 Exhibit 99.2 N E W S B U L L E T I N FROM: The financial Relations Board ----------------------------- B S M G W O R L D W I D E [LOGO] Sizzler(R) RE: SIZZLER INTERNATIONAL, INC. 6101 W. Centinela Ave., Suite 200 Culver City, CA 90230 (310) 568-0135 NYSE: SZ ---------------------------------------------------------------------------------------------------------------- AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD: Keith Wall Kim Forster Elissa Kuykendall Tricia Ross Vice President and CFO Vice President, Planning General Information Investor/Analyst Contact (310) 568-0135 (310) 568-0135 (310) 442-0599 (310) 442-0599 ----------------------------------------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE August 22, 2001 SIZZLER INTERNATIONAL ANNOUNCES FIRST QUARTER FISCAL 2002 RESULTS HIGHLIGHTS: . First quarter revenues increase to $61.3 million from $54.7 million . Excluding impact of decline in the Australian dollar, revenues would have been $64.9 million, an increase of nearly 19% . Revenue growth primarily due to $8.8 million contribution from Pat & Oscar's subsidiary . Overall performance continues to be impacted by weakness in U.S. economy, rising energy prices and weakening of Australian dollar . Company expects to open one new Pat & Oscar's in current quarter ending October 14, 2001 . Pat & Oscar's, acquired last year, is accretive to earnings this quarter CULVER CITY, CA--August 22, 2001--Sizzler International, Inc. (NYSE: SZ) today reported financial results for the first quarter ended July 22, 2001. For the first quarter, the Company reported revenues of $61.3 million, an increase of 12% over the $54.7 million in the comparable period in fiscal 2001. Net income for the first quarter was $1.7 million, or $0.06 per diluted share, compared with net income of $2.9 million, or $0.10 per diluted share in the same period a year ago. The overall decline in net income was primarily attributable to Sizzler International, Inc. Page 2 of 6 continued weakness in the U.S. economy, rising energy prices, particularly in California, and a 12% decline in the Australian dollar from last year. Excluding the effect of the decline in the Australian dollar, revenues would have been $64.9 million, an increase of nearly 19%. "Although our sales growth has declined in recent months, we're continuing to generate strong cash flow and are able to sustain our profitability in a difficult economic environment that is impacting the entire restaurant industry. Since nearly 80% of our Company owned restaurants are located in California, we believe we're being particularly impacted because of our exposure to a state that has been hit harder economically than the majority of the U.S.," said Charles Boppell, President and CEO of Sizzler International. "As we indicated last quarter, we've identified and implemented a number of cost containment efforts that we believe will enable us to maintain our profitability in difficult times. These initiatives, which include the expanded use of MenuLink, a restaurant system that allows us to more effectively control our inventories, purchasing, labor and food costs, enabled us to improve our gross margin costs at both Sizzler USA and Pat & Oscar's during the quarter. We believe these savings will be sustainable in the coming quarters." The Company reported an increase in same store sales of 1.3% for the KFC(R) division and declines of 3.2% for Sizzler USA, 2.0% for Sizzler Australia, and 0.9% for Pat & Oscar's. These declines in sales were primarily due to a continued slowdown in the U.S. and Australian economies. Pat & Oscar's Growth Plan on Track The increase in first quarter revenues is primarily attributable to ongoing contributions from the Company's Pat & Oscar's subsidiary which was acquired during the second quarter of fiscal 2001. Pat & Oscar's contributed approximately $8.8 million in revenues during the first quarter, a 16% sequential increase over the prior quarter ending April 29, 2001. The Company expects to continue to support Pat & Oscar's expansion plans with an additional four to five locations opening in the current fiscal year. "Previously we projected that Pat & Oscar's would be accretive to earnings in the first year after its acquisition. We're pleased to announce that the division showed a profit during the quarter and is expected to be accretive for the year. However, as we open new restaurants and incur opening expenses, profitability in some quarters may slip. Pat & Oscar's grew its revenue contribution sequentially from the prior quarter primarily as a result of the new Carlsbad, California location, but same-store sales growth was adversely affected by continued weakness in the California economy and previous expansion in our core markets of San Diego and Orange County. We look forward to continuing to support Pat & Oscar's expansion plans and expect to open one additional store, the 12th in the system, during the current quarter," said Mr. Boppell. Update on Share Repurchase Program During the first quarter, the Company purchased over 143,000 shares under it's previously announced stock repurchase program, under which, the Company is authorized to buy back up to 2.0 million shares of its common stock. As of July 22, 2001, the Company has repurchased approximately of 1.5 million of the 2.0 million shares authorized by its Board of Directors. -###- Sizzler International, Inc. Page 3 of 6 Outlook for Fiscal 2002 "In light of the continued weakness in the U.S. economy, particularly in our own backyard, we continue to be very cautious but optimistic regarding our growth outlook for the coming quarters. In this difficult market environment, our priority will continue to be on restoring growth at the Sizzler brand through menu enhancements and the introduction of new marketing programs, expansion of Pat & Oscar's, with four to five new openings this fiscal year, and a continued focus on managing our bottom line," concluded Mr. Boppell. Investor Conference Call Sizzler will be holding an investor conference call to discuss the Company's financial and operational results today at 11:00 a.m. EDT. Investors will have the opportunity to listen to the conference call over the Internet at www.streetevents.com. To listen to the live call, please go to the web site at least fifteen minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. About Sizzler Sizzler International, Inc. operates, franchises or joint ventures 344 Sizzler(R) restaurants worldwide, in addition to 105 KFC(R) restaurants primarily located in Queensland, Australia and 11 Pat & Oscar's restaurants. Certain statements contained in this document may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. These statements may include but are not limited to, statements regarding: (i) continuing growth in revenues and earnings; (ii) further expansion of the Pat & Oscar's division; and (iii) the enhancement of shareholder value. Sizzler cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected in the forward looking statements contained herein. Such factors include, but are not limited to: (a) the Company's ability to implement its strategic plan; (b) the Company's ability to manage its costs and expenses, particularly energy and utility costs;(c) the Company's ability to continue to support the expansion of additional Pat & Oscar's units;(d) general economic conditions and other conditions which may impact the public securities markets; (e) whether the continuation of the share repurchase program will enhance shareholder value; (f) fluctuations in the Australian Dollar exchange rate; and (g) other risks as detailed form time to time in Sizzler's SEC reports, including Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Annual Reports on Form 10-K . [ tables to follow ] -###- Sizzler International, Inc. Page 4 of 6 SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE TWELVE WEEKS ENDED JULY 22, 2001 AND JULY 23, 2000 (In thousands, except per share data) July 22, July 23, 2001 2000 ----------------------------------------------------- ----------- ----------- (Unaudited) (Unaudited) Revenues Restaurant sales $ 59,273 $ 52,312 Franchise revenues 1,999 2,346 ----------------------------------------------------- ----------- ----------- Total revenues 61,272 54,658 ----------------------------------------------------- ----------- ----------- Costs and Expenses Cost of sales 20,201 18,943 Labor and related expenses 16,899 14,234 Other operating expenses 14,274 11,930 Depreciation and amortization 2,160 1,805 General and administrative expenses 5,477 4,312 ----------------------------------------------------- ----------- ----------- Total operating costs 59,011 51,224 ----------------------------------------------------- ----------- ----------- Interest expense 1,119 747 Investment income (472) (559) Other income (412) - ----------------------------------------------------- ----------- ----------- Total costs and expenses 59,246 51,412 ----------------------------------------------------- ----------- ----------- Income before income taxes 2,026 3,246 ----------------------------------------------------- ----------- ----------- Provision for income taxes 362 381 ----------------------------------------------------- ----------- ----------- Net income $ 1,664 $ 2,865 ===================================================== =========== =========== Basic and diluted earnings per share $ 0.06 $ 0.10 ===================================================== =========== =========== -###- Sizzler International, Inc. Page 5 of 6 SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
July 22, April 30, ASSETS 2001 2001 --------------------------------------------------------------- ----------- --------- (Unaudited) (Audited) Current Assets: Cash and cash equivalents $ 20,241 $ 17,849 Receivables, net of reserves of $979 at July 22, 2001 and $865 at April 30, 2001 2,721 2,464 Inventories 4,084 4,211 Current tax asset 3,680 3,324 Prepaid expenses and other current assets 1,880 2,554 --------------------------------------------------------------- ------------ ---------- Total current assets 32,606 30,402 --------------------------------------------------------------- ------------ ---------- Property and equipment, net 58,927 60,011 Property held for sale, net 3,891 3,996 Long-term notes receivable, net of reserves of $ 0 at July 22, 2001 and $17 at April 30, 2001 953 994 Deferred income taxes 2,294 2,425 Intangible assets, net of accumulated amortization of $1,536 at July 22, 2001 and $1,536 at April 30, 2001 21,318 21,176 Other assets 3,471 3,558 --------------------------------------------------------------- ------------ ---------- Total assets $ 123,460 $ 122,562 =============================================================== ============ ==========
-###- Sizzler International, Inc. Page 6 of 6 SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
July 22, April 30, LIABILITIES AND STOCKHOLDERS' INVESTMENT 2001 2001 ------------------------------------------------------------ ----------- --------- (Unaudited) (Audited) Current Liabilities: Current portion of long-term debt $ 5,346 $ 5,597 Accounts payable 9,291 9,078 Other current liabilities 10,593 9,626 Income taxes payable 1,995 1,870 ------------------------------------------------------------ ----------- ---------- Total current liabilities 27,225 26,171 ------------------------------------------------------------ ----------- ---------- Long-term debt, net of current portion 22,915 24,085 Deferred gains and revenues 8,126 8,307 Pension liability 9,379 9,482 Stockholders' Investment: Capital stock - Preferred, authorized 1,000,000 shares, $5 par value; no shares issued - - Common, authorized 50,000,000 shares, $0.01 par value; outstanding 27,601,499 shares at July 22, 2001 and 27,744,799 shares at April 30, 2001 291 291 Additional paid-in capital 279,860 279,846 Accumulated deficit (215,382) (217,046) Treasury stock, 1,507,100 shares at July 22, 2001 and 1,363,800 shares at April 30, 2001, at cost (3,404) (3,189) Accumulated other comprehensive loss (5,550) (5,385) ------------------------------------------------------------ ----------- ---------- Total stockholders' investment 55,815 54,517 ------------------------------------------------------------ ----------- ---------- Total liabilities and stockholders' investment $ 123,460 $ 122,562 ============================================================ =========== ==========