Attached files
| file | filename |
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| 8-K - FORM 8-K - LRI HOLDINGS, INC. | form8k.htm |
Exhibit 99.1
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LRI Holdings, Inc., the Parent Company of Logan’s Roadhouse, Inc., Announces Financial Results for the Third Quarter and Year-to-Date Periods of Fiscal Year 2012
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Nashville, Tenn. – June 11, 2012 – LRI Holdings, Inc., the parent company of Logan’s Roadhouse, Inc., today announced financial results for the third quarter and year-to-date periods of fiscal year 2012 ended April 29, 2012.
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(In thousands)
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Thirteen weeks ended April 29, 2012 (Successor)
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Thirteen weeks ended May 1, 2011 (Successor)
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Thirty-nine weeks ended April 29, 2012 (Successor)
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Period from October 4, 2010 to May 1, 2011 (Successor)
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Period from August 2, 2010 to October 3, 2010 (Predecessor)
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Combined thirty-nine weeks ended May 1, 2011
(Non-GAAP)
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||||||||||||||||||
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Net sales
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$ | 169,585 | $ | 158,876 | $ | 470,234 | $ | 346,182 | $ | 93,762 | $ | 439,944 | ||||||||||||
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Net income (loss)
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8,297 | 3,864 | 5,568 | (1,094 | ) | (224 | ) | (1,318 | ) | |||||||||||||||
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Adjusted EBITDA*
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26,255 | 24,712 | 58,882 | 51,865 | 8,567 | 60,432 | ||||||||||||||||||
Selected Highlights for the Third Quarter 2012 Compared to the Third Quarter 2011:
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§
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Opened four new company-owned Logan’s Roadhouse® restaurants during the third quarter 2012.
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§
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Net sales increased 6.7% to $169.6 million from $158.9 million.
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§
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Comparable restaurant sales declined 0.8%, average check increased by 3.3%, and customer traffic decreased by 4.0%.
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§
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Net income more than doubled to $8.3 million from $3.9 million.
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§
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Adjusted EBITDA increased 6.2% to $26.3 million from $24.7 million. (*)
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Selected Highlights for the Year-to-Date 2012 Compared to the Combined Year-to-Date 2011:
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§
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Opened 18 new company-owned Logan’s Roadhouse® restaurants during the year-to-date 2012.
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§
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Net sales increased 6.9% to $470.2 million from $439.9 million.
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§
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Comparable restaurant sales declined 0.9%, average check increased by 3.8%, and customer traffic decreased by 4.6%.
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§
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Net income of $5.6 million compared to a net loss of $1.3 million.
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§
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Adjusted EBITDA of $58.9 million compared to $60.4 million. (*)
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(*) Please see reconciliation table at the end of this release.
Thomas Vogel, President, Chairman, and Chief Executive Officer of Logan’s Roadhouse, Inc., stated, “During the third quarter, sales contributions from new restaurant openings more than offset lower comparable store sales and we generated Adjusted EBITDA growth despite slightly negative comparable store sales. Our core demographic continues to be impacted by high unemployment levels and lower discretionary income, therefore increasing guest counts remains both a significant challenge as well as our top organizational priority. We continue to actively test and implement brand building and new product messages across all of our day parts to encourage more visits to Logan’s.”
Mr. Vogel concluded, “We completed our fiscal 2012 development schedule with our 19th restaurant opening in the beginning of the fourth quarter and we remain focused on continuing to fund our new restaurant growth through operating cash flows and lease financing."
Additional discussion and analysis of the Company’s financial condition and results of operations can be found in its Quarterly Report on Form 10-Q for the quarterly period ended April 29, 2012. It is available at www.logansroadhouse.com under the investor relations section.
- 1 -
Conference Call
The Company will host a conference call on Thursday, June 14, 2012 at 10:30 a.m. ET to discuss its financial results for the third quarter and year-to-date periods of fiscal year 2012. The conference call will be hosted by Thomas Vogel, President and Chief Executive Officer, and Amy Bertauski, Chief Financial Officer.
The domestic dial-in number for the call is 888-228-5274, and the international dial-in number is 913-312-0376. Please call approximately 10 minutes in advance to ensure that you are connected prior to the presentation. A telephone replay may be accessed by using the domestic replay number 877-870-5176 or the international replay number 858-384-5517; the passcode is 5421644
About Logan’s Roadhouse
Logan’s opened its first restaurant in 1991 in Lexington, KY, and has grown as an affordable, full-service restaurant chain to 220 company-owned and 26 franchised Logan's Roadhouse restaurants in 23 states with approximately 15,000 employees. The Company’s mission is to recreate the traditional American roadhouse by offering consumers value-oriented, high quality, “craveable” meals for lunch and dinner served in the hospitable tradition and distinctive atmosphere reminiscent of an American roadhouse of the 1930’s and 1940’s. Logan’s menu features specially seasoned aged steaks, fresh ground steak burgers, fresh chicken dishes and salads, fall-off-the-bone ribs, distinctive fresh-baked yeast rolls and bottomless buckets of peanuts. LRI Holdings, Inc. is the parent company of Logan’s Roadhouse.
Contact
Investor Relations
InvestorRelations@logansroadhouse.com
(855) 255-2789
- 2 -
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LRI HOLDINGS, INC. CONDENSDED CONSOLIDATED BALANCE SHEETS
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(In thousands, except share data)
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April 29, 2012
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July 31, 2011
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ASSETS
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(unaudited)
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Current assets:
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Cash and cash equivalents
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$ | 5,307 | $ | 19,103 | ||||
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Receivables
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8,810 | 9,960 | ||||||
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Inventories
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12,112 | 11,370 | ||||||
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Prepaid expenses and other current assets
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4,415 | 3,367 | ||||||
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Receivable from RHI
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151 | - | ||||||
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Income taxes receivable
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5,552 | 3,688 | ||||||
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Deferred income taxes
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2,199 | 2,207 | ||||||
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Total current assets
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38,546 | 49,695 | ||||||
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Property and equipment, net
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242,697 | 232,940 | ||||||
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Other assets
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18,980 | 19,492 | ||||||
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Goodwill
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332,604 | 331,788 | ||||||
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Tradename
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71,694 | 71,694 | ||||||
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Other intangible assets, net
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21,875 | 23,215 | ||||||
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Total assets
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$ | 726,396 | $ | 728,824 | ||||
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LIABILITIES AND STOCKHOLDER’S EQUITY
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Current liabilities:
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Accounts payable
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$ | 19,351 | $ | 17,573 | ||||
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Payable to RHI
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- | 802 | ||||||
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Other current liabilities and accrued expenses
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39,475 | 52,315 | ||||||
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Total current liabilities
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58,826 | 70,690 | ||||||
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Long-term debt
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355,000 | 355,000 | ||||||
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Deferred income taxes
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37,556 | 37,746 | ||||||
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Other long-term obligations
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38,866 | 34,808 | ||||||
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Total liabilities
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490,248 | 498,244 | ||||||
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Commitments and contingencies (Note 5)
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- | - | ||||||
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Stockholder’s equity:
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Common stock ($0.01 par value; 100 shares authorized; 1 share issued and outstanding)
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- | - | ||||||
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Additional paid-in capital
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230,000 | 230,000 | ||||||
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Retained earnings
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6,148 | 580 | ||||||
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Total stockholder’s equity
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236,148 | 230,580 | ||||||
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Total liabilities and stockholder’s equity
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$ | 726,396 | $ | 728,824 | ||||
- 3 -
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LRI HOLDINGS, INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited)
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(In thousands)
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Thirteen weeks ended April 29, 2012 (Successor)
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Thirteen weeks ended May 1, 2011 (Successor)
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Thirty-nine weeks ended April 29, 2012 (Successor)
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Period from October 4, 2010 to May 1, 2011 (Successor)
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Period from August 2, 2010 to October 3, 2010 (Predecessor)
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Combined thirty-nine weeks ended May 1, 2011
(Non-GAAP)
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Revenues:
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Net sales
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$ | 169,585 | $ | 158,876 | $ | 470,234 | $ | 346,182 | $ | 93,762 | $ | 439,944 | ||||||||||||
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Franchise fees and royalties
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584 | 575 | 1,621 | 1,245 | 348 | 1,593 | ||||||||||||||||||
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Total revenues
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170,169 | 159,451 | 471,855 | 347,427 | 94,110 | 441,537 | ||||||||||||||||||
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Costs and expenses:
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Restaurant operating costs:
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Cost of goods sold
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54,792 | 52,078 | 154,127 | 112,967 | 29,172 | 142,139 | ||||||||||||||||||
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Labor and other related expenses
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48,187 | 45,484 | 137,777 | 100,989 | 28,578 | 129,567 | ||||||||||||||||||
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Occupancy costs
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12,281 | 11,354 | 36,210 | 25,333 | 8,046 | 33,379 | ||||||||||||||||||
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Other restaurant operating expenses
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25,473 | 22,386 | 72,748 | 49,374 | 15,478 | 64,852 | ||||||||||||||||||
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Depreciation and amortization
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5,165 | 4,508 | 14,954 | 10,019 | 3,112 | 13,131 | ||||||||||||||||||
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Pre-opening expenses
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1,020 | 1,059 | 4,088 | 2,442 | 783 | 3,225 | ||||||||||||||||||
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General and administrative
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6,193 | 6,399 | 18,584 | 24,384 | 14,440 | 38,824 | ||||||||||||||||||
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Impairment and store closing charges
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- | - | 108 | - | - | - | ||||||||||||||||||
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Total costs and expenses
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153,111 | 143,268 | 438,596 | 325,508 | 99,609 | 425,117 | ||||||||||||||||||
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Operating income (loss)
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17,058 | 16,183 | 33,259 | 21,919 | (5,499 | ) | 16,420 | |||||||||||||||||
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Interest expense, net
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10,124 | 10,124 | 29,614 | 23,586 | 3,147 | 26,733 | ||||||||||||||||||
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Other income, net
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- | - | - | (15 | ) | (182 | ) | (197 | ) | |||||||||||||||
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Income (loss) before income taxes
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6,934 | 6,059 | 3,645 | (1,652 | ) | (8,464 | ) | (10,116 | ) | |||||||||||||||
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Income tax (benefit) expense
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(1,363 | ) | 2,195 | (1,923 | ) | (558 | ) | (8,240 | ) | (8,798 | ) | |||||||||||||
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Net income (loss)
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8,297 | 3,864 | 5,568 | (1,094 | ) | (224 | ) | (1,318 | ) | |||||||||||||||
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Undeclared preferred dividend
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- | - | - | - | (2,270 | ) | (2,270 | ) | ||||||||||||||||
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Net income (loss) attributable to common stockholders
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$ | 8,297 | $ | 3,864 | $ | 5,568 | $ | (1,094 | ) | $ | (2,494 | ) | $ | (3,588 | ) | |||||||||
- 4 -
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LRI HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(unaudited)
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(In thousands)
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Thirty-nine weeks ended April 29, 2012 (Successor)
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Period from October 4, 2010 to May 1, 2011 (Successor)
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Period from August 2, 2010 to October 3, 2010 (Predecessor)
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Cash flows from operating activities:
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Net income (loss)
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$ | 5,568 | $ | (1,094 | ) | $ | (224 | ) | ||||
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Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
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Depreciation and amortization
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14,954 | 10,019 | 3,112 | |||||||||
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Other amortization
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764 | 3,050 | 241 | |||||||||
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Unrealized gain on interest rate swap
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- | - | (182 | ) | ||||||||
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Loss on sale/disposal of property and equipment
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2,093 | 437 | 203 | |||||||||
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Amortization of deferred gain on sale and leaseback transactions
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(16 | ) | (2 | ) | (18 | ) | ||||||
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Impairment charges for long-lived assets
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108 | - | - | |||||||||
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Share-based compensation expense
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530 | 569 | - | |||||||||
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Tax benefit upon cancellation/exercise of Predecessor stock options
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- | - | 6,431 | |||||||||
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Deferred income taxes
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(182 | ) | - | (10,701 | ) | |||||||
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Changes in operating assets and liabilities:
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Receivables
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1,150 | (947 | ) | 126 | ||||||||
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Inventories
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(742 | ) | (691 | ) | (205 | ) | ||||||
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Prepaid expenses and other current assets
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(1,048 | ) | 5,048 | 1,668 | ||||||||
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Other non-current assets and intangibles
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(1,774 | ) | (474 | ) | (179 | ) | ||||||
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Accounts payable
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1,208 | (2,379 | ) | 413 | ||||||||
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RHI payable
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(33 | ) | (14 | ) | - | |||||||
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Income taxes payable/receivable
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(1,864 | ) | (576 | ) | (3,985 | ) | ||||||
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Other current liabilities and accrued expenses
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(12,840 | ) | (23,621 | ) | 4,942 | |||||||
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Other long-term obligations
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4,224 | 3,061 | 1,022 | |||||||||
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Net cash provided by (used in) operating activities
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12,100 | (7,614 | ) | 2,664 | ||||||||
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Cash flows from investing activities:
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Acquisition of LRI Holdings, net of cash acquired
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- | (311,633 | ) | - | ||||||||
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Purchase of property and equipment
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(35,736 | ) | (20,478 | ) | (7,036 | ) | ||||||
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Proceeds from sale and leaseback transactions, net of expenses
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11,290 | 1,793 | 1,656 | |||||||||
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Net cash used in investing activities
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(24,446 | ) | (330,318 | ) | (5,380 | ) | ||||||
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Cash flows from financing activities:
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Proceeds from issuance of Senior Secured Notes
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- | 355,000 | - | |||||||||
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Payments for debt issuance costs
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- | (18,995 | ) | - | ||||||||
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Contribution from parent
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- | 230,000 | - | |||||||||
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Repayment of Predecessor’s senior secured credit facility
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- | (132,825 | ) | - | ||||||||
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Repayment of Predecessor’s senior subordinated unsecured mezzanine
term notes, including prepayment premium
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- | (87,576 | ) | - | ||||||||
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Payments on revolving credit facility
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(18,400 | ) | - | - | ||||||||
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Borrowings on revolving credit facility
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18,400 | - | - | |||||||||
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Repurchase of shares
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(1,450 | ) | - | - | ||||||||
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Net cash provided by financing activities
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(1,450 | ) | 345,604 | - | ||||||||
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(Decrease) increase in cash and cash equivalents
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(13,796 | ) | 7,672 | (2,716 | ) | |||||||
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Cash and cash equivalents, beginning of period
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19,103 | - | 52,211 | |||||||||
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Cash and cash equivalents, end of period
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$ | 5,307 | $ | 7,672 | $ | 49,495 | ||||||
- 5 -
Forward-Looking Statements
This press release contains statements about future events and expectations that constitute forward-looking statements. These forward-looking statements can generally be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or the negative thereof or similar terminology. These statements are based on management’s beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account the information currently available. These statements are not statements of historical fact. Examples of forward-looking statements in this press release include our targets for future new unit growth. Forward-looking statements involve risks and uncertainties that may cause the Company’s actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements and you should not place undue reliance on such statements. Please refer to our Annual Report on Form 10-K for the fiscal year ended July 31, 2011, and subsequent periodic reports that we have filed with the Securities and Exchange Commission, for a discussion of risk factors that may contribute to these differences. Any forward-looking information presented herein is made only as of the date of this supplemental report, and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events or otherwise.
Non-GAAP Financial Measures
This press release also contains non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Adjusted EBITDAR, and the Combined presentation of the Predecessor and Successor periods of fiscal year 2011. The Company believes that these measures, together with reconciliations to the most comparable GAAP measure, are helpful to both management and investors in understanding and analyzing financial performance. However, the Company’s non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures used by other companies. These non-GAAP measures and the Combined presentation for fiscal year 2011 have limitations as an analytical tool and should not be considered in isolation or as a substitute for GAAP financial measures.
To the extent we discuss any non-GAAP financial measures on the earnings call, a reconciliation of each measure to the most directly comparable GAAP measure is available in this press release. In addition, the Current Report on Form 8-K furnished to the SEC concurrent with the issuance of this press release includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.
The following table sets forth a reconciliation of net income (loss), the most directly comparable GAAP financial measure, to EBITDA, Adjusted EBITDA and Adjusted EBITDAR.
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Successor
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Successor
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Successor
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Predecessor
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Combined
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||||||||||||||||||||
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Period from
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Period from
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|||||||||||||||||||||||
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Thirteen weeks
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Thirteen weeks
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Thirty-nine
weeks
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October 4,
2010
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August 2,
2010
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Thirty-nine
weeks
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|||||||||||||||||||
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ended
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ended
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ended
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to
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to
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ended
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(In thousands)
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April 29,
2012
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May 1,
2011
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April 29,
2012
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May 1,
2011
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October 3,
2010
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May 1,
2011
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Net income (loss)
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$ | 8,297 | $ | 3,864 | $ | 5,568 | $ | (1,094 | ) | $ | (224 | ) | $ | (1,318 | ) | |||||||||
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Interest expense, net
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10,124 | 10,124 | 29,614 | 23,586 | 3,147 | 26,733 | ||||||||||||||||||
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Income tax (benefit) expense
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(1,363 | ) | 2,195 | (1,923 | ) | (558 | ) | (8,240 | ) | (8,798 | ) | |||||||||||||
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Depreciation and amortization
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5,165 | 4,508 | 14,954 | 10,019 | 3,112 | 13,131 | ||||||||||||||||||
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EBITDA
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22,223 | 20,691 | 48,213 | 31,953 | (2,205 | ) | 29,748 | |||||||||||||||||
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Adjustments
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Sponsor management fees(a)
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250 | 260 | 750 | 607 | 205 | 812 | ||||||||||||||||||
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Non-cash asset write-offs:
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Restaurant impairment(b)
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- | - | 108 | - | - | - | ||||||||||||||||||
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Loss on disposal of property and equipment(c)
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1,616 | 220 | 2,085 | 423 | 164 | 587 | ||||||||||||||||||
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Restructuring costs(d)
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430 | - | 430 | - | - | - | ||||||||||||||||||
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Pre-opening expenses (excluding rent)(e)
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773 | 896 | 3,337 | 2,026 | 598 | 2,624 | ||||||||||||||||||
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Hedging gain (f)
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- | - | - | - | (182 | ) | (182 | ) | ||||||||||||||||
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Losses on sales of property(g)
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- | (7 | ) | 8 | 14 | 39 | 53 | |||||||||||||||||
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Non-cash rent adjustment(h)
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918 | 991 | 3,353 | 3,395 | (334 | ) | 3,061 | |||||||||||||||||
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Costs related to the Transactions(i)
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- | 1,085 | 43 | 12,869 | 10,272 | 23,141 | ||||||||||||||||||
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Non-cash stock-based compensation(j)
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40 | 569 | 530 | 569 | - | 569 | ||||||||||||||||||
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Other adjustments(k)
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5 | 7 | 25 | 9 | 10 | 19 | ||||||||||||||||||
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Adjusted EBITDA
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26,255 | 24,712 | 58,882 | 51,865 | 8,567 | 60,432 | ||||||||||||||||||
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Cash rent expense(l)
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9,448 | 8,631 | 27,388 | 18,224 | 7,128 | 25,352 | ||||||||||||||||||
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Adjusted EBITDAR
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$ | 35,703 | $ | 33,343 | $ | 86,270 | $ | 70,089 | $ | 15,695 | $ | 85,784 | ||||||||||||
- 6 -
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(a)
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Prior to the completion of the Transactions, sponsor management fees consisted of fees paid to our Predecessor owners under a management and consulting services agreement, which was terminated in connection with the completion of the Transactions. Following the completion of the Transactions, sponsor management fees consist of fees paid to the Kelso Affiliates under an advisory agreement.
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(b)
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Restaurant impairment charges were recorded in connection with the determination that the carrying value of certain of our restaurants exceeded their estimated fair value.
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(c)
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Loss on disposal of property and equipment consists of the loss on disposal or retirement of assets that are not fully depreciated.
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(d)
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Restructuring costs include severance and other related charges.
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(e)
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Pre-opening expenses (excluding rent) include expenses directly associated with the opening of a new restaurant.
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(f)
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Hedging gain relates to fair market value changes of an interest rate swap. The interest rate swap was terminated in connection with the Transactions.
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(g)
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We recognize losses in connection with the sale and leaseback of restaurants when the fair value of the property being sold is less than the undepreciated cost of the property.
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(h)
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Non-cash rent adjustments represent the non-cash rent expense calculated as the difference between GAAP rent expense and amounts payable in cash under the leases during such time period. In measuring our operational performance, we focus on our cash rent payments.
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(i)
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Costs related to the Transactions include: expenses related to business combination accounting recognized in connection with the Transactions, a one-time fee of $7.0 million paid to the Kelso Affiliates and legal, professional, and other fees incurred as a result of the Transactions.
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(j)
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Non-cash stock-based compensation represents compensation expense recognized for time-based stock options issued by Roadhouse Holding Inc.
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(k)
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Other adjustments include ongoing expenses of closed restaurants, as well as inventory write-offs, employee termination buyouts and incidental charges related to restaurant closings.
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(l)
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Cash rent expense represents actual cash payments required under our leases.
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- 7 -