DEERFIELD, IL, May 17, 2012 (MARKETWIRE via COMTEX) --Cosi, Inc. (NASDAQ: COSI), the fast casual restaurant company,
today reported that it had reduced its net loss for the first quarter
ended April 2, 2012 by $1,012,000 or 47% to $(1,128,000), or $(0.02)
per basic and diluted common share, compared with the net loss of
$(2,140,000), or $(0.04) per basic and diluted common share, reported
for the 2011 first quarter.
Cosi's total revenues for the 2012 first quarter increased by
$964,000 to $24,673,000 from $23,709,000 in the 2011 first quarter.
Company-owned net restaurant sales increased by 4% or $916,000 to
$23,921,000 from $23,005,000 for the 2011 first quarter due primarily
to a 6.2% increase in comparable restaurant sales. Franchise fees and
royalty revenues for the quarter contributed $752,000 compared to
$704,000 in the 2011 first quarter. The increase over last year's
first quarter was due primarily to higher royalties resulting from an
increase in comparable franchise restaurant sales.
System-wide comparable restaurant sales for the first quarter as
measured for restaurants in operation for more than 15 months
recorded an aggregate 7.5% increase as compared to the first quarter
of 2011. The breakdown in comparable sales between Company-owned and
franchise-operated restaurants are as follows:
For the 13 weeks ended
April 2, 2012
----------------------
Company-owned 6.2%
Franchise-operated 9.5%
Total System 7.5%
When reported on a like calendar week basis to the prior year,
system-wide comparable sales increased by 4.8%. The 270 basis point
improvement in system-wide comparable sales on a fiscal reporting
basis over the like calendar week basis was the result of a year over
year holiday week shift that occurred at the beginning of the 2012
first quarter.
"The continued positive sales trend and improved operating margins in
the quarter reflect our ongoing efforts to make Cosi a strong and
profitable brand," said Carin Stutz, Cosi's President and Chief
Executive Officer. "Our confidence is strong as we remain focused on
driving sales and traffic while simplifying the guest experience,
improving our operating margins and examining ways to further reduce
our administrative costs."
2012 First Quarter Financial Performance Review
Cosi's aforementioned $916,000 increase in first quarter
Company-owned net sales as compared to the 2011 first quarter was due
primarily to the 6.2% increase in comparable restaurant net sales
partially offset by a decline in sales from locations closed during
and subsequent to the first quarter of 2011. The increase in
Company-owned comparable net sales during the quarter was comprised
of a 5.9% increase in traffic and a 0.3% increase in average guest
check.
For the first quarter, Cosi reported a 230 basis point decrease in
costs and expenses related to Company-owned restaurant operations as
a percentage of restaurant net sales compared with the first quarter
of 2011. The change resulted from decreases of 140 and 120 basis
points, as a percentage of net sales, in occupancy and other
restaurant operating expenses and labor and related benefits expense,
respectively, partially offset by a 30 basis point increase, as a
percentage of net sales, in the cost of food and beverage. The
decrease in occupancy and other restaurant operating expenses and
labor and related benefits expense as a percentage of net sales was
due primarily to the leveraging impact of the comparable restaurant
net sales increase 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 lower vendor incentives received
during the 2012 first quarter as well the impact of higher commodity
and fuel costs partially offset by the price increase taken during
the second quarter of 2011.
During the first quarter of 2012, the Company reduced its general and
administrative expenses by 9.1% or $277,000, to $2,779,000 or 11.3%
of total revenues from $3,056,000 or 12.9% of total revenues in the
2011 first quarter.
Cosi reported that as of April 2, 2012 it had cash and cash
equivalents of $4,813,000 and virtually no debt other than lease
obligations.
About Cosi, Inc.
Cosi(R) (http://www.getcosi.com) is a national fast
casual 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. Cosi's warm and urbane atmosphere is geared
towards its sophisticated, upscale, urban and suburban guests. There
are currently 80 Company-owned and 54 franchise restaurants operating
in seventeen states, the District of Columbia and the United Arab
Emirates. The Cosi(R) vision is to become America's favorite fast
casual restaurant by providing customers authentic, innovative,
savory food while remaining an affordable luxury.
The Cosi(R) menu features Cosi(R) sandwiches, freshly-tossed salads,
breakfast wraps, melts, soups, Cosi(R) Squagels(R), flatbread pizzas,
S'mores, snacks and other desserts, and a wide range of coffee and
coffee-based drinks and other specialty beverages. Cosi(R)
restaurants are designed to be welcoming and comfortable with an
eclectic environment. Cosi's sights, sounds, and spaces create a
tasteful, relaxed ambience that provides a fresh and new dining
experience.
"Cosi," "(Sun & Moon Design)" and related marks are registered
trademarks of Cosi, Inc. in the U.S.A. and certain other countries.
Copyright Copyright 2012 Cosi, 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
and interruptions; labor shortages or increased labor costs; changes
in demographic trends and consumer tastes and preferences, including
changes resulting from concerns over nutritional or safety aspects of
beef, poultry, produce, or other foods or the effects of food-borne
illnesses, such as E. coli, "mad cow disease" and avian influenza or
"bird flu"; competition in our markets, both in our business and in
locating suitable restaurant sites; our operation and execution in
new and existing markets; expansion into new markets including
foreign markets; our ability to attract and retain qualified
franchisees and our franchisees' ability to open restaurants on a
timely basis; our ability to locate suitable restaurant sites in new
and existing markets and negotiate acceptable lease terms; 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; fluctuations in our quarterly
results due to seasonality; increased government regulation and our
ability to secure required government approvals and permits; our
ability to create customer awareness of our restaurants in new
markets; the reliability of our customer and market studies; cost
effective and timely planning, design and build out of restaurants;
our ability to recruit, train and retain qualified corporate and
restaurant personnel and management; market saturation due to new
restaurant openings; inadequate protection of our intellectual
property; our ability to obtain additional capital and financing;
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 Cosi's website at
http://www.getcosi.com in the investor relations section.
Cosi, Inc.
Consolidated Balance Sheets
As of April 2, 2012 and January 2, 2012
(dollars in thousands, except share and per share data)
April 2, January 2,
2012 2012
----------- -----------
(Unaudited) (Note 1)
Assets
Current assets:
Cash and cash equivalents $ 4,813 $ 7,222
Accounts receivable, net 631 598
Notes receivable, current portion 443 448
Inventories 732 717
Prepaid expenses and other current assets 1,351 1,480
----------- -----------
Total current assets 7,970 10,465
Furniture and fixtures, equipment and leasehold
improvements, net 11,612 12,359
Notes receivable, net of current portion 677 762
Other assets 1,109 1,119
----------- -----------
Total assets $ 21,368 $ 24,705
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,711 $ 3,717
Accrued expenses 7,541 9,733
Deferred franchise revenue 61 61
Current portion of other long-term liabilities 187 195
----------- -----------
Total current liabilities 11,500 13,706
Deferred franchise revenue 2,173 2,098
Other long-term liabilities, net of current
portion 3,199 3,383
----------- -----------
Total liabilities 16,872 19,187
----------- -----------
Commitments and contingencies
Stockholders' equity:
Common stock - $.01 par value; 100,000,000
shares authorized, 52,967,165 and 52,967,365
shares issued, respectively 530 530
Additional paid-in capital 283,852 283,746
Treasury stock, 239,543 shares at cost (1,198) (1,198)
Accumulated deficit (278,688) (277,560)
----------- -----------
Total stockholders' equity 4,496 5,518
----------- -----------
Total liabilities and stockholders' equity $ 21,368 $ 24,705
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
Cosi, Inc.
Consolidated Statements of Operations and Comprehensive Loss
For the Three Month Periods Ended April 2, 2012 and March 28, 2011
(dollars in thousands, except share and per share data)
Three Months Ended
April 2, March 28,
2012 2011
----------- -----------
(Unaudited) (Unaudited)
Revenues:
Restaurant net sales $ 23,921 $ 23,005
Franchise fees and royalties 752 704
----------- -----------
Total revenues 24,673 23,709
----------- -----------
Costs and expenses:
Cost of food and beverage 5,566 5,296
Restaurant labor and related benefits 8,815 8,742
Occupancy and other restaurant operating expenses 7,686 7,703
----------- -----------
22,067 21,741
General and administrative expenses 2,779 3,056
Depreciation and amortization 994 1,065
Closed store costs - 21
Lease termination expense (28) 17
Gain on sale of assets - (41)
----------- -----------
Total costs and expenses 25,812 25,859
----------- -----------
Operating loss (1,139) (2,150)
Other income 11 10
----------- -----------
Net loss and comprehensive loss $ (1,128) $ (2,140)
=========== ===========
Per Share Data:
----------- -----------
Loss per share, basic and diluted $ (0.02) $ (0.04)
=========== ===========
Weighted average shares outstanding: 51,456,844 51,254,279
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
Cosi, Inc.
Results of Operatins as a Percent of Sales
Three Months Ended
April 2, March 28,
2012 2011
------------ -----------
Revenues:
Restaurant net sales 97.0% 97.0%
Franchise fees and royalties 3.0 3.0
----------- -----------
Total revenues 100.0 100.0
----------- -----------
Cost and expenses:
Cost of food and beverage (1) 23.3 23.0
Restaurant labor and related benefits (1) 36.8 38.0
Occupancy and other restaurant operating expenses
(1) 32.1 33.5
----------- -----------
92.2 94.5
General and administrative expenses 11.3 12.9
Depreciation and amortization 4.0 4.5
Closed store costs - 0.1
Lease termination expense (0.1) 0.1
Gain on sale of assets - (0.2)
----------- -----------
Total costs and expenses 104.6 109.1
----------- -----------
Operating loss (4.6) (9.1)
Other income - 0.1
----------- -----------
Net loss and comprehensive loss (4.6)% (9.0)%
=========== ===========
(1) Expressed as a percentage of restaurant net sales versus all other items
expressed as a percentage of total revenues.
Cosi, Inc.
System-wide Restaurants
For the Three Months Ended
April 2, 2012 March 28, 2011
------------------------ ------------------------
Company- Company-
Owned Franchise Total Owned Franchise Total
-------- --------- ----- -------- --------- -----
Restaurants at beginning
of period 80 56 136 83 59 142
New restaurants opened - - - - - -
Restaurants permanently
closed - 1 1 1 - 1
-------- --------- ----- -------- --------- -----
Restaurants at end of
period 80 55 135 82 59 141
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CONTACT:
William Koziel
(847) 597-8800
SOURCE: Cosi, Inc.
