Click here to close now.



Welcome!

Microsoft Cloud Authors: Pat Romanski, Elizabeth White, Liz McMillan, Mihai Corbuleac, David Bermingham

News Feed Item

Kona Grill Reports Third Quarter 2012 Financial Results

18.5% Restaurant Operating Profit Margin Helps Drive Income From Continuing Operations of $0.16 per Share

SCOTTSDALE, AZ -- (Marketwire) -- 11/05/12 -- Kona Grill, Inc. (NASDAQ: KONA), an American grill and sushi bar, reported results for its third quarter ended September 30, 2012.

Third Quarter 2012 Highlights vs. Year-Ago Quarter:

  • Restaurant sales increased to $23.9 million from $23.8 million;
  • Same-store sales increased 20 basis points, lapping 10.6% same-store sales growth;
  • Restaurant operating profit margin increased 20 basis points to 18.5%;
  • Income from continuing operations increased 86% to $1.4 million; and
  • Net income increased 67% to $984,000 or $0.11 per share, compared to $589,000 or $0.06 per share.

"Our comps during the quarter represent the eighth consecutive quarter of positive same-store sales and eleventh consecutive quarter of positive traffic," said Berke Bakay, president and CEO of Kona Grill. "We continue to drive positive traffic with the execution of our innovative menu offerings and guest service initiatives. Despite a challenging sales environment in the quarter, we were able to deliver a healthy operating margin of 18.5%. For the first nine months of the year, Kona's 19.3% operating margin remains at the top of our peer group and we've grown income from continuing operations 179% to $4.4 million.

"For the remainder of 2012, we will remain focused on providing innovative food and quality service that differentiates the Kona Grill brand. We continue to work diligently on our real estate pipeline and are currently evaluating several prospective locations. We will update our target for new restaurant openings once leases are executed. We remain confident in our go-forward strategy."

Third Quarter 2012 Financial Results
Restaurant sales in the third quarter of 2012 were $23.9 million compared to $23.8 million in the third quarter or 2011. The sales improvement reflects a 0.2% increase in same-store sales, driven by a 2.3% increase in guest traffic, partially offset by a 2.0% decrease in average guest check as a result of the company's happy hour initiatives. The 0.2% increase in same-store sales laps a 10.6% increase in the third quarter of 2011.

Total restaurant operating expenses in the third quarter of 2012 remained constant at $19.5 million compared to the third quarter of 2011. Restaurant operating profit in the third quarter of 2012 increased 1.3% to $4.4 million compared to the year-ago quarter. As a percentage of sales, restaurant operating profit increased 20 basis points to 18.5% compared to 18.3% in the year-ago quarter.

In September 2012, the company settled lease obligation costs associated with the closure of the Sugar Land restaurant for $950,000. As a result of the settlement, the company recognized a charge for $386,000 or $0.05 per share due to incremental lease termination costs and related legal fees. These costs are included in discontinued operations for the third quarter of 2012.

Income from continuing operations increased 86% to $1.4 million or $0.16 per share in the third quarter of 2012, compared to $735,000 or $0.08 per share in the year-ago quarter. Net income in the third quarter of 2012 increased 67% to $984,000 or $0.11 per share, compared to net income of $589,000 or $0.06 per share in the year-ago quarter.

During the third quarter, the company repurchased 192,000 shares at an average cost of $8.13 per share under its $5.0 million stock repurchase program, which was initiated in May 2012. In total, the company has repurchased 287,000 shares for $2.3 million under the current program.

At September 30, 2012, cash and cash equivalents totaled $6.4 million compared to $6.3 million at December 31, 2011. The cash balance at September 30, 2012 included the aforementioned settlement. Total debt was $0.4 million at September 30, 2012 compared to $0.1 million at December 31, 2011. The company has not drawn on its $6.5 million credit line.

Financial Guidance
For the fourth quarter of 2012, Kona Grill expects same-store sales of 1.0%, excluding the impact of Hurricane Sandy on four restaurants and the remodel of its Chandler, Arizona restaurant. With the aforementioned items, restaurant sales are expected to be flat at $23.1 million. The company also expects net income of $0.8 million, or $0.09 per share, compared to net income of $0.7 million, or $0.08 per share, for the fourth quarter of 2011.

For fiscal year 2012, the company expects to more than double its earnings with net income of $4.7 million, or $0.52 per share, compared to 2011 net income of $2.0 million, or $0.21 per share. The company expects 2012 income from continuing operations to increase 123% to $5.2 million compared to income from continuing operations of $2.3 million in 2011.

Conference Call
The company will host a conference call to discuss these results today at 5:00 p.m. Eastern time.

Dial toll-free: 1-877-941-2068
Toll/international: 1-480-629-9712
Conference ID#: 4568022

The conference call will be broadcast simultaneously and available for replay via the Investor Relations section of the company's website at www.konagrill.com.

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

A replay of the call will be available after 8:00 p.m. Eastern time on the same day through Wednesday, December 5, 2012.

Toll-free replay number: 1-877-870-5176
Toll/International replay number: 1-858-384-5517
Replay pin #: 4568022

About Kona Grill
Kona Grill (NASDAQ: KONA) features American favorites with an international influence and award-winning sushi in a casually elegant atmosphere. Kona Grill owns and operates 23 restaurants, guided by a passion for quality food and personal service. Restaurants are currently located in 16 states: Arizona (Chandler, Gilbert, Phoenix, Scottsdale); Colorado (Denver); Connecticut (Stamford); Florida (Tampa); Illinois (Lincolnshire, Oak Brook); Indiana (Carmel); Louisiana (Baton Rouge); Maryland (Baltimore); Michigan (Troy); Minnesota (Eden Prairie); Missouri (Kansas City); Nebraska (Omaha); New Jersey (Woodbridge); Nevada (Las Vegas); Texas (Austin, Dallas, Houston, San Antonio); Virginia (Richmond). For more information, visit www.konagrill.com.

Forward-Looking Statements
The financial guidance we provide for our fourth quarter and fiscal year 2012 results, statements about our beliefs regarding profits and stockholder value, and certain other statements contained in this press release are forward-looking. Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events, or performance and underlying assumptions and other statements that are not purely historical. We have attempted to identify these statements by using forward-looking terminology such as "may," "will," "anticipates," "expects," "believes," "intends," "should," or comparable terms. All forward-looking statements included in this press release are based on information available to us on the date of this release and we assume no obligation to update these forward-looking statements for any reason. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements and the discussion of risk factors contained in the company's filings with the Securities and Exchange Commission.


                              KONA GRILL, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               (in thousands)

                                                September 30,  December 31,
                                                    2012           2011
                                               -------------- --------------
                                                 (Unaudited)

ASSETS
  Current assets                               $        8,154 $        7,709
  Other assets                                            822            694
  Property and equipment, net                          29,504         32,944
                                               -------------- --------------
  Total assets                                 $       38,480 $       41,347
                                               ============== ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities                          $        7,508 $       10,089
  Long-term obligations                                12,448         13,574
  Stockholders' equity                                 18,524         17,684
                                               -------------- --------------
  Total liabilities and stockholders' equity   $       38,480 $       41,347
                                               ============== ==============



                              KONA GRILL, INC.
         CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                   (in thousands, except per share data)

                                  Three Months Ended    Nine Months Ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  ---------
                                      (Unaudited)           (Unaudited)

Restaurant sales                 $  23,887  $  23,838  $  73,035  $  70,591
Costs and expenses:
  Cost of sales                      6,540      6,404     19,849     19,336
  Labor                              8,040      7,815     24,199     23,365
  Occupancy                          1,569      1,742      4,650      5,125
  Restaurant operating expenses      3,310      3,506     10,248     10,542
  General and administrative         1,761      2,117      5,365      6,147
  Gain on insurance recoveries        (101)         -       (101)         -
  Depreciation and amortization      1,392      1,474      4,311      4,419
                                 ---------  ---------  ---------  ---------
Total costs and expenses            22,511     23,058     68,521     68,934
                                 ---------  ---------  ---------  ---------
Income from operations               1,376        780      4,514      1,657
Nonoperating income (expense):
  Interest income and other, net         -          -          -          2
  Interest expense                      (6)       (26)       (26)       (47)
                                 ---------  ---------  ---------  ---------
Income from continuing
 operations before provision for
 income taxes                        1,370        754      4,488      1,612
Provision for income taxes               -         19        120         44
                                 ---------  ---------  ---------  ---------
Income from continuing
 operations                          1,370        735      4,368      1,568
Loss from discontinued
 operations, net of tax               (386)      (146)      (433)      (288)
                                 ---------  ---------  ---------  ---------
Net income                       $     984  $     589  $   3,935  $   1,280
                                 =========  =========  =========  =========

Net income per share - Basic
  Income from continuing
   operations                    $    0.16  $    0.08  $    0.50  $    0.17
  Loss from discontinued
   operations, net of tax            (0.05)     (0.02)     (0.05)     (0.03)
                                 ---------  ---------  ---------  ---------
  Net income                     $    0.11  $    0.06  $    0.45  $    0.14
                                 =========  =========  =========  =========

Net income per share - Diluted
  Income from continuing
   operations                    $    0.16  $    0.08  $    0.49  $    0.17
  Loss from discontinued
   operations, net of tax            (0.05)     (0.02)     (0.05)     (0.03)
                                 ---------  ---------  ---------  ---------
  Net income                     $    0.11  $    0.06  $    0.44  $    0.14
                                 =========  =========  =========  =========

Weighted average shares
 outstanding:
  Basic                              8,710      9,256      8,776      9,224
                                 =========  =========  =========  =========
  Diluted                            8,808      9,454      8,956      9,398
                                 =========  =========  =========  =========

Comprehensive income             $     984  $     589  $   3,935  $   1,280
                                 =========  =========  =========  =========


Reconciliation of Restaurant Operating Profit to Income from Operations

The Company defines restaurant operating profit to be restaurant sales minus cost of sales, labor, occupancy, and restaurant operating expenses. Restaurant operating profit does not include general and administrative expenses, gain on insurance recoveries and depreciation and amortization. The Company believes restaurant operating profit is an important component of financial results because it is a widely used metric within the restaurant industry to evaluate restaurant-level productivity, efficiency, and performance. The Company uses restaurant operating profit as a key metric to evaluate its restaurants' financial performance compared with its competitors. Restaurant operating profit is not a financial measurement determined in accordance with generally accepted accounting principles ("GAAP") and should not be considered in isolation or as an alternative to income from operations. Restaurant operating profit may not be comparable to the same or similarly titled measures computed by other companies. The table below sets forth the Company's calculation of restaurant operating profit and a reconciliation to income from operations, the most comparable GAAP measure (in thousands).


                                  Three Months Ended    Nine Months Ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  ---------

Restaurant sales                 $  23,887  $  23,838  $  73,035  $  70,591
Costs and expenses:
  Cost of sales                      6,540      6,404     19,849     19,336
  Labor                              8,040      7,815     24,199     23,365
  Occupancy                          1,569      1,742      4,650      5,125
  Restaurant operating expenses      3,310      3,506     10,248     10,542
                                 ---------  ---------  ---------  ---------
Restaurant operating profit          4,428      4,371     14,089     12,223
                                 ---------  ---------  ---------  ---------
Deduct - other costs and
 expenses:
  General and administrative         1,761      2,117      5,365      6,147
  Gain on insurance recoveries        (101)         -       (101)         -
  Depreciation and amortization      1,392      1,474      4,311      4,419
                                 ---------  ---------  ---------  ---------
Income from operations           $   1,376  $     780  $   4,514  $   1,657
                                 =========  =========  =========  =========


                                     Percentage of         Percentage of
                                   Restaurant Sales      Restaurant Sales
                                 --------------------  --------------------
                                  Three Months Ended    Nine Months Ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  ---------

Restaurant sales                     100.0%     100.0%     100.0%     100.0%
Costs and expenses:
  Cost of sales                       27.4       26.9       27.2       27.4
  Labor                               33.7       32.8       33.1       33.1
  Occupancy                            6.6        7.3        6.4        7.3
  Restaurant operating expenses       13.8       14.7       14.0       14.9
                                 ---------  ---------  ---------  ---------
Restaurant operating profit           18.5       18.3       19.3       17.3
                                 ---------  ---------  ---------  ---------
Deduct - other costs and
 expenses:
  General and administrative           7.4        8.9        7.3        8.7
  Gain on insurance recoveries        (0.4)         -       (0.1)         -
  Depreciation and amortization        5.8        6.2        5.9        6.3
                                 ---------  ---------  ---------  ---------
Income from operations                 5.7%       3.3%       6.1%       2.3%
                                 =========  =========  =========  =========

Certain amounts do not sum to total due to rounding

Add to Digg Bookmark with del.icio.us Add to Newsvine

Kona Grill Investor Relations Contact:
Liolios Group, Inc.
Cody Slach
Tel 1-949-574-3860
Email Contact

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change t...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Amazon has gradually rolled out parts of its IoT offerings, but these are just the tip of the iceberg. In addition to optimizing their backend AWS offerings, Amazon is laying the ground work to be a major force in IoT - especially in the connected home and office. In his session at @ThingsExpo, Chris Kocher, founder and managing director of Grey Heron, explained how Amazon is extending its reach to become a major force in IoT by building on its dominant cloud IoT platform, its Dash Button strat...
industrial company for a multi-year contract initially valued at over $4.0 million. In addition to DataV software, Bsquare will also provide comprehensive systems integration, support and maintenance services. DataV leverages advanced data analytics, predictive reasoning, data-driven diagnostics, and automated orchestration of remediation actions in order to improve asset uptime while reducing service and warranty costs.
Vidyo, Inc., has joined the Alliance for Open Media. The Alliance for Open Media is a non-profit organization working to define and develop media technologies that address the need for an open standard for video compression and delivery over the web. As a member of the Alliance, Vidyo will collaborate with industry leaders in pursuit of an open and royalty-free AOMedia Video codec, AV1. Vidyo’s contributions to the organization will bring to bear its long history of expertise in codec technolo...