Revenue, Same-Store Sales Down at Cosi Inc.
Cosi Inc. reports 2009 third quarter results.
-- Chain Leader, 11/10/2009 9:10:00 AM
PRESS RELEASE: DEERFIELD, IL--(Marketwire - November 9, 2009) - Così, Inc. (NASDAQ: COSI), the premium convenience restaurant company, today reported a net loss for the third quarter ended September 28, 2009 of $(2,362,000), or $(0.06) per basic and diluted common share, compared with a net loss of $(3,095,000), or $(0.08) per basic and diluted common share, for the 2008 third quarter.
Così's total revenues for the 2009 third quarter decreased 14.0% to $30,033,000 from $34,930,000 in the 2008 third quarter. Company-owned net restaurant sales declined 13.1% in the quarter to $29,528,000, compared to $33,975,000 in the previous year's quarter. Franchise fees and royalty revenues for the quarter contributed $505,000 compared to $955,000 in the 2008 third quarter. The third quarter year over year decrease in franchise fees and royalties was due primarily to the recognition of $460,000 in fees in the 2008 third quarter resulting from a franchisee termination.
System-wide comparable restaurant sales for the third quarter as measured for restaurants in operation for more than 15 months recorded an aggregate decline of 10.7% as compared to the third quarter of 2008. The breakdown in comparable sales between Company-owned and franchise-operated restaurants is as follows:
For the 13 weeks ended
September 28, 2009
----------------------
Company-owned (11.9%)
Franchise-operated (5.7%)
Total System (10.7%)
James Hyatt, Così's President and Chief Executive Officer, said, "The recession and its impact on consumer and business spending has continued to adversely impact sales, especially in our catering business given our high density of locations in major metropolitan business districts. We remain intensely focused on working collaboratively with our franchise partners to drive sales and improve operating margins, while remaining diligent about controlling costs."
2009 Third Quarter Financial Performance Review
Contributing to Così's aforementioned 13.1% decrease in third quarter Company-owned net sales as compared to the third quarter last year was the decline in Company-owned comparable sales as well as the impact of closing four locations since the end of the 2008 third quarter. The Company-owned comparable sales decline of 11.9%, which was comprised of an 8.8% decrease in traffic and a 3.1% decrease in average guest check, was impacted by a 27.5% decrease in overall catering sales during the third quarter as compared to the 2008 third quarter.
For the third quarter, Così reported a 500 basis point increase in costs and expenses related to Company-owned restaurant operations as a percentage of restaurant net sales compared with the third quarter of 2008. The change resulted from increases of 350, 80 and 70 basis points, as a percentage of net sales, in labor and related benefits, cost of food and beverage and occupancy and other restaurant operating expenses, respectively. The increase in labor and related benefits and occupancy and other restaurant operating expenses as a percentage of net sales was due primarily to the impact of the comparable restaurant net sales decrease on the fixed portion of these costs during the period. The increase in the cost of food and beverage as a percentage of net sales was due primarily to the impact of certain limited-time promotional menu offerings in the third quarter that focused on generating gross margin dollars but carried a higher cost as a percentage of net sales as compared to the prior year period.
During the same period, the Company reduced its general and administrative expenses by $1,945,000 or 390 basis points as a percentage of total revenues, to $3,484,000 or 11.6% from $5,429,000 or 15.5% in the 2008 third quarter.
Così reported that as of September 28, 2009 it had cash and cash equivalents of $4,589,000 and virtually no debt other than lease obligations.
Business Update
Così stated that, despite the difficult economic environment, it remains focused on several initiatives to better position itself for recovery; 1) improving the guest experience, 2) continuing to provide fresh and innovative product offerings at a great value and 3) improving our restaurant operating leverage through good cost controls while also reducing administrative overhead costs.
Così also reported that it is pleased with the efforts of its new advertising agency to broaden and enhance its initiatives to increase traffic and sales while building awareness of the brand. During the third quarter, Cosi in cooperation with the new agency completed phase one of its website initiative which provides greater focus on its fresh high quality innovative menu offerings while also providing guests easy access to nutritional and allergen information.
Development Performance
Così finished the 2009 third quarter with a total of 144 locations consisting of 99 Company-owned locations and 45 franchised locations. During the 2009 third quarter, one Company-owned location was opened in Glenview, Illinois and one franchise location was opened at the Reagan National Airport in Virginia. Subsequent to the end of the 2009 third quarter, one additional franchise location was opened at the Dulles International Airport in Virginia.
About Così, Inc.
Così (http://www.getcosi.com) is a national premium convenience restaurant chain that has developed featured foods built around a secret, generations-old recipe for crackly crust flatbread. This artisan bread is freshly baked in front of customers throughout the day in open flame stone hearth ovens prominently located in each of the restaurants. Così's warm and urbane atmosphere is geared towards its sophisticated, upscale, urban and suburban guests. There are currently 99 Company-owned and 46 franchise restaurants operating in eighteen states, the District of Columbia and the United Arab Emirates. The Così vision is to become America's favorite premium convenience restaurant by providing customers authentic, innovative, savory food while remaining an affordable luxury.
The Così menu features Così sandwiches, freshly-tossed salads, melts, soups, Così bagels, flatbread pizzas, S'mores, snacks and other desserts, and a wide range of coffee and coffee-based drinks and other specialty beverages. Così restaurants are designed to be welcoming and comfortable with an eclectic environment. Così's sights, sounds, and spaces create a tasteful, relaxed ambience that provides a fresh and new dining experience.
"Così," "Così ( w/hearth design)," "Simply Good Taste" and related marks are registered trademarks of Così, Inc.
Copyright (c) 2009 Così, Inc. All rights reserved.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This press release contains statements that constitute forward-looking statements under the federal securities laws. Forward-looking statements are statements about future events and expectations and not statements of historical fact. The words "believe," "may," "will," "should," "anticipate," "estimate," "expect," "intend," "objective," "seek," "plan," "strive," or similar words, or negatives of these words, identify forward-looking statements. We qualify any forward-looking statements entirely by these cautionary factors. Forward-looking statements are based on management's beliefs, assumptions and expectations of our future economic performance, taking into account the information currently available to management. Forward-looking statements involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. Factors that could contribute to these differences include, but are not limited to: the cost of our principal food products and supply and delivery shortages or interruptions; labor shortages or increased labor costs; changes in consumer preferences and demographic trends; expansion into new markets including foreign markets; our ability to locate suitable restaurant sites in new and existing markets and negotiate acceptable lease terms; competition in our markets, both in our business and in locating suitable restaurant sites; our operation and execution in new and existing markets; our ability to recruit, train and retain qualified corporate and restaurant personnel and management; cost effective and timely planning, design and build-out of restaurants; our ability to attract and retain qualified franchisees; the availability and cost of additional financing, both to fund our existing operations and to open new restaurants; the rate of our internal growth and our ability to generate increased revenue from our existing restaurants; our ability to generate positive cash flow from existing and new restaurants; the reliability of our customer and market studies; fluctuations in our quarterly results due to seasonality; increased government regulation and our ability to secure required governmental approvals and permits; our ability to create customer awareness of our restaurants in new markets; market saturation due to new restaurant openings; inadequate protection of our intellectual property; adverse weather conditions which impact customer traffic at our restaurants and adverse economic conditions. Further information regarding factors that could affect our results and the statements made herein are included in our filings with the Securities and Exchange Commission.
Additional information is available on the company's website at http://www.getcosi.com in the investor relations section.
Cosi Inc. Completes Rights Offering
01/07/2010Same-Store Sales, Revenue Down at Cosi Inc.
08/10/2009Same-Store Sales Down at Sonic Corp.
01/06/2010Revenue Down 13.6% in Cosi's First Quarter
05/11/2009
