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Ignite Restaurant Group Reports Second Quarter 2014 Financial Results

Stocks in this article: IRG

Ignite Restaurant Group (NASDAQ:IRG) today reported financial results for the second quarter ended June 30, 2014.

Highlights for the second quarter of 2014 were as follows:

  • Total revenues were $229.8 million, compared to $228.1 million in the second quarter of 2013;
  • Comparable restaurant sales increased 8.5% at Brick House Tavern + Tap, decreased 4.7% at Joe’s Crab Shack and decreased 2.6% at Macaroni Grill;
  • Net income and net income per diluted share were $1.8 million and $0.07, respectively;
  • Adjusted net income and adjusted net income per diluted share (which are non-GAAP financial measures) were $2.0 million and $0.08, respectively.

Ray Blanchette, Chief Executive Officer of Ignite Restaurant Group, stated, “Our second quarter results were challenged as we faced what we believe were residual effects of 2014’s winter weather, combined with some cannibalization of Joe’s Crab Shack sales as we significantly increased the number of locations in the Northeast over the past three years. Results at Macaroni Grill were generally in line with our internal expectations, however our team continues to focus on a robust pipeline of initiatives to drive sales growth and improve profitability. We remain pleased with the ongoing sales success at Brick House Tavern + Tap and with the improvements in store level execution. Our near-term development strategy is expected to provide further opportunities to expand the Brick House concept as we continue to optimize our real estate portfolio through conversions.”

Review of Second Quarter 2014 Operating Results

Total revenues were $229.8 million in the second quarter of 2014, an increase of 0.8% compared to $228.1 million in the second quarter of last year. The increase was largely driven by the inclusion of Macaroni Grill for the full 13 weeks of the second quarter of 2014, versus 12 weeks for the comparable period of 2013 and new restaurant development, partially offset by a 3.1% decrease in comparable restaurant sales.

  • Revenues at Joe’s Crab Shack were $125.5 million during the second quarter of 2014 versus $129.6 million in the prior year. Comparable restaurant sales at Joe’s Crab Shack decreased 4.7%.
  • Revenues at Brick House Tavern + Tap were $17.8 million in the second quarter of 2014 compared to $12.5 million in the prior year. Comparable restaurant sales at Brick House Tavern + Tap increased 8.5%.
  • Revenues at Macaroni Grill were $86.6 million in the second quarter of 2014 compared to $86.0 million in the prior year. Comparable restaurant sales at Macaroni Grill decreased 2.6%. Macaroni Grill was acquired on April 9, 2013.

Net income for the second quarter of 2014 was $1.8 million, or $0.07 per diluted share. The Company’s net income for the second quarter of 2014 included approximately $330,000 of costs related to three restaurant closures, losses on disposal of assets and transaction related costs. Excluding the impact of these items, adjusted net income and adjusted net income per diluted share (which are non-GAAP financial measures) were $2.0 million and $0.08, respectively, in the second quarter of 2014. Net loss for the second quarter of 2013 was $2.5 million, or a loss of $0.10 per diluted share. The Company incurred approximately $5.3 million of primarily acquisition related and labor related transition costs in connection with the acquisition of Romano's Macaroni Grill in the second quarter of 2013. Excluding the impact of these items, adjusted net income and adjusted net income per diluted share (which are non-GAAP financial measures) were $1.0 million and $0.04, respectively. A reconciliation between GAAP net income (loss) and adjusted net income is included in the accompanying financial data.

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