Country Style Cooking Restaurant Chain Reports Third Quarter 2010 Financial Results
The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding its operating performance by excluding share-based compensation expenses, which may not be indicative of its operating performance from a cash perspective. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to the Company’s historical performance and liquidity. Management uses both GAAP and non-GAAP information in evaluating and operating the business internally and therefore deems it important to provide all of this information to investors. Management also believes that these non-GAAP financial measures facilitate comparisons to the Company’s historical performance. A limitation of using these non-GAAP measures is that they exclude share-based compensation charge that has been and will continue to be for the foreseeable future a significant recurring expense in our business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the outlook for the fourth quarter of 2010 and quotations from management in this announcement, as well as Country Style Cooking’s strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: uncertainties regarding our ability to open and profitably operate new restaurants and manage our growth effectively and efficiently; risks associated with changing consumer taste and discretionary spending; uncertainties regarding our ability to maintain and enhance the attractiveness of our restaurants and our brand and image; risks related to instances of food-borne illnesses, health epidemics and other outbreaks; uncertainties regarding our ability to respond to competitive pressures; and uncertainties associated with factors typically affecting the consumer food services industry in general. Further information regarding these and other risks is included in the Company’s reports filed with, or furnished to the Securities and Exchange Commission. Country Style Cooking does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of this press release, and Country Style Cooking undertakes no duty to update such information, except as required under applicable law.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except shares)
|As of December 31, 2009||As of September 30, 2010|
|Cash and cash equivalents||70,695||61,849||9,244|
|Due from related parties||9,012||128||19|
|Prepaid expenses and other current assets||6,902||5,957||890|
|Deferred income taxes-current||518||518||77|
|Total current assets||105,913||96,023||14,351|
|Property and equipment, net||95,961||155,212||23,199|
|Deferred income taxes—non current||959||959||143|
|Deposits for leases—non current||5,949||8,653||1,293|
|Due to related parties||11,031||320||48|
|Income tax payable||7,691||7,359||1,100|
|Accrued offering expenses||1,900||15,705||2,347|
|Total current liabilities||82,193||96,009||14,349|
|Deferred rent—non current||5,108||7,689||1,149|
|Prepaid subscription—non current||-||771||115|
Series A convertible preferred shares, par value $0.001, 24,000,000 shares issued and outstanding
Ordinary shares, $0.001 par value, 56,000,000 and 2,000,000,000 authorized, 56,000,000 and 103,032,000 issued and outstanding, respectively
|Additional paid-in capital||5,866||680,755||101,749|
|Accumulated other comprehensive loss||(2,040)||(2,076)||(310)|
|Total liabilities, mezzanine equity and equity||215,068||267,133||39,926|
Condensed Consolidated Statements of Operations
(Amounts in thousands, except shares, per share and per ADS data)
|Three months ended September 30|
|Costs and expenses:|
|Food and paper||66,592||97,319||14,546|
Restaurant wages and related expenses 1
|Restaurant rent expense||10,198||16,899||2,526|
|Restaurant utilities expense||9,049||13,711||2,049|
|Pre-opening expense 2||-||1,127||168|
|Other restaurant operating expenses||7,817||7,798||1,166|
|Selling, general and administrative expenses 1||3,164||9,078||1,357|
|Total operating expenses||121,960||184,474||27,573|
|Income from operations||20,467||24,739||3,697|
|Foreign exchange loss||-||13||2|
|Income before income taxes||20,807||26,383||3,943|
|Income tax expense||(3,908)||(5,387)||(805)|
|Basic net income per share||0.21||0.26||0.04|
|Diluted net income per share||0.21||0.25||0.04|
|Basic net income per ADS||0.84||1.04||0.16|
|Diluted net income per ADS||0.84||1.00||0.15|
|Basic weighted average ordinary shares outstanding||56,000,000||57,533,652||57,533,652|
|Diluted weighted average ordinary shares outstanding||80,000,000||83,425,655||83,425,655|
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