>NASHVILLE, Tenn., May 12, 2009 (BUSINESS WIRE) — O’Charley’s Inc. (Nasdaq: CHUX), a leading casual-dining restaurant company, today reported revenues and earnings per share for the 16-week period ended April 19, 2009.
Financial and Operating Highlights
Revenue for the first quarter of fiscal 2009 decreased 2.0 percent to $291.7 million from $297.5 million in the first quarter of fiscal 2008. Same-store sales for the first quarter of 2009 declined 2.9 percent at O’Charley’s company-operated restaurants, 4.5 percent at Ninety Nine Restaurants, and 17.2 percent at Stoney River Legendary Steaks.
Restaurant-level margins, which the Company defines as restaurant sales less cost of food and beverage, payroll and benefits costs, and restaurant operating costs increased to 17.3 percent of restaurant sales from 16.6 percent in the prior year quarter. Declines in food and beverage costs as a percent of restaurant sales, improved controls over labor scheduling, reductions in the cost of employee benefit plans and reductions in other restaurant operating costs contributed to this improved performance.
Income from operations in the quarter was $12.0 million, or 4.1 percent of revenues, and earnings before income taxes were $7.9 million. In comparison, income from operations in the prior year quarter was $8.6 million, or 2.9 percent of revenues, and earnings before income taxes were $4.7 million.
During the first quarter of 2009, the Company reduced debt by $26.7 million, including payments of $23.8 million on the revolving credit line. At the end of the quarter, the Company had no drawings under its revolving line of credit. Capital investment during the quarter was $2.0 million, compared to $14.0 million in the prior year quarter.
Given the valuation allowance on the Company’s deferred tax assets recognized in 2008, as well as the Company’s current financial outlook, the effective tax rate applied to earnings before income taxes for the 2009 fiscal year is projected to be approximately 6.4 percent. Applying this tax rate to first quarter earnings before income taxes, and adjusting for a number of discrete items recognized as a part of the first quarter tax provision, results in net earnings available to common shareholders of $6.9 million, or $0.34 per diluted share. In comparison, the effective tax rate applied to earnings before income taxes in the first quarter of 2008 was a negative 119 percent, resulting in net earnings available to common shareholders in the prior year first quarter of $10.0 million, or $0.46 per diluted share. [See “Adoption of FASB Staff Position EITF 03-6-1” discussion later in this release]
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