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TheStreet Open House

Granite City Food & Brewery® Reports 35.7% Increase In Revenue In Third Quarter 2012

About Granite City

Granite City Food & Brewery Ltd. develops and operates two casual dining concepts: Granite City Food & Brewery and Cadillac Ranch All American Bar & Grill. Granite City Food & Brewery is a polished casual American restaurant that features a great dining experience with affordable, high-quality menu items prepared from made-from-scratch recipes, served in generous portions. There is a brewery onsite, serving hand-crafted and micro brews. Granite City opened its first restaurant in 1999 and is expanding nationwide; there are currently 27 Granite City restaurants in 13 states. Cadillac Ranch restaurants feature freshly prepared, authentic, All-American cuisine in a fun, dynamic environment. Its patrons enjoy a warm, Rock N’ Roll inspired atmosphere, with plenty of room for friends, music and dancing. The Cadillac Ranch menu is diverse with offerings ranging from homemade meatloaf to pasta dishes, all freshly prepared using quality ingredients. The Company purchased its first Cadillac Ranch in November 2011 and has since purchased five additional Cadillac Ranch restaurants along with its intellectual property. The Company currently operates six Cadillac Ranch restaurants in five states. Additional information about Granite City Food & Brewery can be found at www.gcfb.com.

Forward-Looking Statements, Non-GAAP Financial Measurements and Adjusted Financial Measures

Certain statements made in this press release of a non-historical nature constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Such factors include, but are not limited to, changes in economic conditions, changes in consumer preferences or discretionary consumer spending, a significant change in the performance of any existing restaurants, our ability to continue funding our operations and meet our debt service obligations, and the risks and uncertainties described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 23, 2012.

Additionally, this press release contains certain non-GAAP financial measures, including references to restaurant-level IBO, company-wide EBITDA and adjusted EBITDA. As compared to the nearest GAAP measurement for our company, restaurant-level IBO represents revenue less cost of food, beverage, labor and restaurant operating costs. We use restaurant-level IBO and restaurant-level IBO as a percentage of revenue as internal measurements of restaurant-level operating performance. Restaurant-level IBO as we define it may not be comparable to similar measurements used by other companies and is not a measure of performance or liquidity presented in accordance with GAAP. We believe that restaurant-level IBO is an important component of our financial results because it is a widely used measurement within the restaurant industry to evaluate restaurant-level productivity, efficiency, and performance. We use restaurant-level IBO as a means of evaluating our restaurants’ financial performance compared with our competitors. As compared to the nearest GAAP measurement for our company, company-wide EBITDA represents operating income (loss) with the add-back of depreciation and amortization, net loss (gain) on disposal of assets and exit or disposal costs. We use company-wide EBITDA as a way to measure our overall internal operational performance without restaurant closings and as a means of evaluating our financial performance compared with our competitors. As compared to the nearest GAAP measurement for our company, adjusted EBITDA represents operating income (loss) with the add-back of net interest expense, pre-opening expenses, acquisition costs, depreciation and amortization, loss (gain) on disposal of assets, exit or disposal costs, non-cash share-based compensation, termination costs and any provision for income taxes, and further adjusts for the difference between the amount of fixed rent recorded on the statements of operations and the actual amount paid for rent expense. We use adjusted EBITDA as a way to measure our overall internal operational performance without restaurant openings and/or closings and as a means of evaluating our restaurants’ financial performance compared with our competitors. These non-GAAP measurements should not be used as substitutes for net loss, net cash provided by or used in operations or other financial data prepared in accordance with GAAP. Schedules of reconciliations of restaurant-level IBO, company-wide EBITDA and adjusted EBITDA for the third quarter and first three quarters of 2012 and 2011 are provided herein.

Finally, in order to provide supplemental results of operations information, we have included certain adjusted financial measures. In particular, we have presented various financial metrics for comparable restaurants, which are those restaurants that we have operated for more than 18 months, and our new restaurants which are those restaurants that we have operated for 18 months or less. The contributions of these groups of restaurants to company-wide performance are set forth herein.

 
Granite City Food & Brewery Ltd.
 
Condensed Consolidated Statements of Operations
 
    Thirteen Weeks Ended     Thirty-nine Weeks Ended
September 25,     September 27, September 25,     September 27,
2012     2011 2012     2011
 
Restaurant revenue $ 31,135,288 $ 22,945,303 $ 90,072,910 $ 70,072,350
 
Cost of sales:
Food, beverage and retail 8,412,835 6,252,503 24,328,465 19,048,008
Labor 10,293,142 7,803,658 29,740,985 23,983,390
Direct restaurant operating 4,749,016 3,583,686 13,340,009 10,410,292
Occupancy   2,573,685     1,858,212     7,351,885     5,250,643  
 
Total cost of sales   26,028,678     19,498,059     74,761,344     58,692,333  
 
Pre-opening 166,582 6,608 915,413 6,608
General and administrative 2,315,538 1,985,543 7,207,083 5,736,591
Acquisition costs 199,560 - 684,745 -
Depreciation and amortization 1,920,425 1,458,486 5,493,719 4,526,246
Exit or disposal activities 15,986 17,660 49,261 (156,900 )
Loss (gain) on disposal of
assets   144,950     36,340     368,263     (34,619 )
 
Operating income   343,569     (57,393 )   593,082     1,302,091  
 
Interest:
Income - 20 32 4,197
Expense   (1,232,515 )   (948,013 )   (3,721,455 )   (2,824,059 )

Net interest expense

  (1,232,515 )   (947,993 )   (3,721,423 )   (2,819,862 )
 
Net loss $ (888,946 ) $ (1,005,386 ) $ (3,128,341 ) $ (1,517,771 )
 
Loss per common share, basic $ (0.14 ) $ (0.26 ) $ (0.64 ) $ (1.39 )
 
Weighted average shares
outstanding, basic   8,002,478     4,653,852     5,873,258     5,961,102  
 
 

Selected Balance Sheet Information

 
    September 25, 2012     September 27, 2011
 
Cash 2,413,261 2,128,299
Current assets, including cash 5,473,230 4,626,534
Total assets 69,255,511 60,932,417
Current liabilities 12,765,313 13,903,942
Total liabilities 66,751,454 61,769,369
Shareholders' equity (deficit) 2,504,057 (836,952 )
 
 

Non-GAAP Reconciliations Q3 2012 Results

 
                    Total for All    
Comparable

% of

New

% of

Restaurants

% of

Restaurants

Sales

Restaurants

Sales

As Reported

Sales

 
Restaurant revenues $ 23,512,565

100

% $ 7,622,723 100 % $ 31,135,288 100 %
 
Cost of sales:
Food, beverage and retail 6,339,886 27.0 % 2,072,949 27.2 % 8,412,835 27.0 %
Labor 8,116,007 34.5 % 2,177,135 28.6 % 10,293,142 33.1 %
Direct restaurant operating
expenses 3,490,216

14.8

%

1,258,800

16.5

%

4,749,016

15.3

%

           
Restaurant-level IBO* $ 5,566,456 23.7 % $ 2,113,839 27.7 % $ 7,680,295 24.7 %
 
Occupancy 2,573,685 8.3 %
Pre-opening 166,582
Acquisition costs 199,560
General and administrative   2,315,538   7.4 %
 
Company-wide EBITDA* 2,424,930 7.8 %
 
Depreciation and amortization 1,920,425
Exit or disposal activities, other   160,936  
 
Operating loss 343,569
 
Interest:
Income -
Expense   (1,232,515 )
Net interest expense (1,232,515 )
 
Net loss $ (888,946 )
 
 

Non-GAAP Reconciliations Q3 2012 Adjusted EBITDA

 
Net loss     $ (888,946 )
 
Net interest expense 1,232,515
Exit or disposal activities 15,986
Loss (gain) on disposal of assets 144,950
Depreciation and amortization 1,920,425
Pre-opening 166,582
Acquisition costs 199,560
Termination costs -
Share-based compensation 77,071
Lease adjustment (1,045,072 )
 
Adjusted EBITDA* $ 1,823,071  
 

*See accompanying disclosure regarding use of non-GAAP financial measures.Certain percentages may not foot due to rounding.

 

Non-GAAP Reconciliations Q3 2011 Results

 
                    Total for All    
Comparable

% of

New

% of

Restaurants

% of

Restaurants

Sales

Restaurants

Sales

As Reported

Sales

 
Restaurant revenues $ 22,945,303 100 % $ - N/A $ 22,945,303 100 %
 
Cost of sales:
Food, beverage and retail 6,252,503 27.2 % - N/A 6,252,503 27.2 %
Labor 7,803,658 34.0 % - N/A 7,803,658 34.0 %
Direct restaurant operating
expenses 3,583,686

15.6

%

-

N/A

3,583,686

15.6

%

           
Restaurant-level IBO* $ 5,305,456 23.1 % $ - N/A $ 5,305,456 23.1 %
 
Occupancy 1,858,212 8.1 %
Pre-opening 6,608
Acquisition costs -
General and administrative   1,985,543   8.7 %
 
Company-wide EBITDA* 1,455,093 6.3 %
 
Depreciation and amortization 1,458,486
Exit or disposal activities, other   54,000  
 
Operating loss (57,393 )
 
Interest:
Income 20
Expense   (948,013 )

Net interest expense

 

(947,993 )
 
Net loss $ (1,005,386 )
 
 

Non-GAAP Reconciliations Q3 2011 Adjusted EBITDA

 
Net loss     $ (1,005,386 )
 
Net interest expense 947,993
Exit or disposal activities 17,660
Loss (gain) on disposal of assets 36,340
Depreciation and amortization 1,458,486
Pre-opening 6,608
Acquisition costs -
Termination costs -
Share-based compensation 204,539
Lease adjustment (979,110 )
 
Adjusted EBITDA* $ 687,130  
 

*See accompanying disclosure regarding use of non-GAAP financial measures.Certain percentages may not foot due to rounding.

 

Non-GAAP Reconciliations Q3 YTD 2012 Results

 
                    Total for All    
Comparable

% of

New

% of

Restaurants

% of

Restaurants

Sales

Restaurants

Sales

As Reported

Sales

 
Restaurant revenues $ 71,430,197 100 % $ 18,642,713 100 % $ 90,072,910 100 %
 
Cost of sales:
Food, beverage and retail 19,304,847 27.0 % 5,023,618 26.9 % 24,328,465 27.0 %
Labor 24,496,981 34.3 % 5,244,004 28.1 % 29,740,985 33.0 %
Direct restaurant operating
expenses 10,378,303

14.5

%

2,961,706

15.9

%

13,340,009

14.8

%

           
Restaurant-level IBO* $ 17,250,066 24.1 % $ 5,413,385 29.0 % $ 22,663,451 25.2 %
 
Occupancy 7,351,885 8.2 %
Pre-opening 915,413
Acquisition costs 684,745
General and administrative   7,207,083   8.0 %
 
Company-wide EBITDA* 6,504,325 7.2 %
 
Depreciation and amortization 5,493,719
Exit or disposal activities, other   417,524  
 
Operating loss 593,082
 
Interest:
Income 32
Expense   (3,721,455 )

Net interest expense

 

(3,721,423 )

 

 
Net loss $ (3,128,341 )
 
 

Non-GAAP Reconciliations Q3 YTD 2012 Adjusted EBITDA

 
Net loss     $ (3,128,341 )
 
Net interest expense 3,721,423
Exit or disposal activities 49,261
Loss (gain) on disposal of assets 368,263
Depreciation and amortization 5,493,719
Pre-opening 915,413
Acquisition costs 684,745
Termination costs 85,210
Share-based compensation 223,747
Lease adjustment (3,013,397 )
 
Adjusted EBITDA* $ 5,400,043  
 

*See accompanying disclosure regarding use of non-GAAP financial measures.Certain percentages may not foot due to rounding.

 

Non-GAAP Reconciliations Q3 YTD 2011 Results

 
                    Total for All    
Comparable

% of

New

% of

Restaurants

% of

Restaurants

Sales

Restaurants

Sales

As Reported

Sales

 
Restaurant revenues $ 70,072,350 100 % $ - N/A $ 70,072,350 100 %
 
Cost of sales:
Food, beverage and retail 19,048,008 27.2 % - N/A 19,048,008 27.2 %
Labor 23,983,390 34.2 % - N/A 23,983,390 34.2 %
Direct restaurant operating
expenses 10,410,292

14.9

%

-

N/A

10,410,292

14.9

%

           
Restaurant-level IBO* $ 16,630,660 23.7 % $ - N/A $ 16,630,660 23.7 %
 
Occupancy 5,250,643 7.5 %
Pre-opening 6,608
Acquisition costs -
General and administrative   5,736,591   8.2 %
 
Company-wide EBITDA* 5,636,818 8.0 %
 
Depreciation and amortization 4,526,246
Exit or disposal activities, other   (191,519 )
 
Operating loss 1,302,091
 
Interest:
Income 4,197
Expense   (2,824,059 )

Net interest expense

 

(2,819,862 )
 
Net loss $ (1,517,771 )
 
 

Non-GAAP Reconciliations Q3 YTD 2011 Adjusted EBITDA

 
Net loss     $ (1,517,771 )
 
Net interest expense 2,819,862
Exit or disposal activities (156,900 )
Loss (gain) on disposal of assets (34,619 )
Depreciation and amortization 4,526,246
Pre-opening 6,608
Acquisition costs -
Termination costs -
Share-based compensation 676,075
Lease adjustment (3,342,814 )
 
Adjusted EBITDA* $ 2,976,687  
 

*See accompanying disclosure regarding use of non-GAAP financial measures.Certain percentages may not foot due to rounding.

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