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July 27, 2012 05:00 pm ET
Berke Bakay - President & CEO
Christi Hing - CFO
Mike Malouf - Craig Hallum
Mark Smith - Feltl & Company
Lee Giordano - Imperial Capital
David Kahn - Raymond James
Good afternoon and thank you for joining us to discuss Kona Grill’s results for the second quarter of 2012. Joining us today are Berke Bakay, Kona’s President and Chief Executive Officer; and Christi Hing, the company’s Chief Financial Officer.
Following their remarks we will open up the call for questions. (Operator Instructions) Before I begin, I would like to remind everyone that the financial guidance the company provides for its third quarter 2012 results, statements regarding the company’s future sales, profits, and expectations regarding same-store sales are forward-looking.
All forward-looking statements made during this call are based on information available to the company as of today and the company assumes no obligation to update these statements to reflect events or circumstances after the date of this call.
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 discussion to risk and uncertainties contained in the company’s filings with the Securities and Exchange Commission.
I would now like to turn the conference over to Kona Grill’s President and CEO, Berke Bakay. Please go ahead.
Thanks, Anna. Good afternoon and thank you all for joining us. We continued our strong momentum during the second quarter with same-store sales comps of 2.3%. Our positive comps during the quarter represent Kona Grill’s seventh consecutive quarter of positive same-store sales and the 10
th consecutive quarter of positive traffic, which we believe demonstrates the strength and momentum of our brand in multiple markets. We were able to leverage the strong sales growth to drive top-tier unit level margins of 19.4% as well as $0.28 in EPS which is an all-time record for our company. As mentioned in our press release, excluding the impact of the Troy fire, our unit level margins were 20%, which we believe is one of the best in the polished casual segment.
It is also important to point out that our earnings for the first half of 2012 have already exceeded our full-year 2011 earnings by over 45%. We believe these strong earnings are a direct result of offsetting performance from each of our restaurants as a result of company-wide operational initiatives and discipline spanning.