PHOENIX, AZ -- Aug. 20, 1996 -- MAIN STREET AND MAIN
INCORPORATED (Nasdaq NM Symbol: MAIN), the world's largest
franchisee of T.G.I. Friday's restaurants, today announced financial
results for the second quarter and six months ended July 1, 1996,
which include a restructuring charge.
Revenue for the three months ended July 1, 1996 was $30,668,000
compared to $31,128,000 in the comparable period in 1995. The
company incurred a net loss for the quarter of $7,288,000, or $0.92
per share, after taking into account a $7,448,000, or $0.94 per
share, restructuring charge (based on 7,952,000 shares) compared to
net income of $311,000, or $0.09 per share (based on 3,648,000
shares) in the comparable period a year ago. Excluding the
restructuring charge, net income for the quarter was $160,000, or
$0.02 per share. The company noted that second quarter results for
this year were adversely impacted by its Front Row Sports Grill
restaurant. Had this site not been included in second quarter
results and the restructuring charge not been taken, net income
would have been $316,000, or $0.04 per share, for the period ended
July 1, 1996. The company is currently considering various
alternatives with respect to the Front Row Sports Grill.
The increase in the number of shares outstanding for the quarter
and six months ended July 1, 1996 reflects the company's October
1995 common stock offering of 4,312,500 shares.
Approximately $6.3 million of the restructuring charge relates
to non-core assets and contractual obligations. The company wrote
down $4.1 of a $6.0 million promissory note, net of an $864,000
deferred gain, as a result of uncertainties respecting the debtor's
business, and $1,296,000 of real estate held for future restaurant
development and other non-core assets with the remaining amount
relating to costs to be incurred through 1998 under the terms of an
employment agreement and fees associated with restructuring and
related matters.
Additionally, $1.1 million of the restructuring charge relates
to three of the company's restaurants. These charges include
preopening costs associated with a T.G.I. Friday's restaurant and
the company's Front Row Sports Grill restaurant, where operating
results have not been sufficient to support the preopening costs.
Operating results also were adversely affected by same-store
sales declines aggregating 2% and 1.7% for the three- and six-month
periods, respectively. This decline, which is attributable
primarily to six specific locations, offset the positive effects of
the opening of three new restaurants and reductions in interest
expenses of $330,000 and $667,000 during the three- and six-months,
respectively, as a result of the retirement of approximately $8.7
million of indebtedness with the proceeds of the company's October
1995 public offering. Since the end of the second quarter, same-
store sales have declined approximately 5% over the comparable prior
year results.
Joe Panter, President of Main Street, stated, "Sales continue to
remain soft, but we continue to focus on ways to increase earnings,
including improving our comparable-store sales, cost efficiencies,
and leveraging our existing infrastructure. Sales are a major focus
within our organization, and we feel that our data base of
approximately 600,000 people who signed up for our Frequent Friday's
program will benefit our future marketing capabilities."
John Antioco, Chairman of the Board of Main Street, stated, "We
are disappointed about current results, but remain confident
regarding the Company's future. As the largest franchisee of T.G.I.
Friday's and a significant player in the casual dining segment, I
believe Main Street's core business provides a terrific platform for
future growth."
MAIN STREET AND MAIN INCORPORATED is the world's largest T.G.I.
Friday's franchisee, operating 42 T.G.I. Friday's restaurants and
one Front Row(R) Sports Grill restaurant in the western United
States.
MAIN STREET AND MAIN INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
7/1/96 6/26/95 7/1/96 6/26/95
Revenue $30,668 $31,128 $63,919
$60,922
Restaurant Operating Expenses:
Cost of sales 8,747 8,947 18,206
17,306
Payroll and benefits 9,546 9,367 19,780
18,437
Depreciation and amortization 1,055 1,079 2,230
2,103
Other operating expenses 8,968 8,862 18,493
17,377
Total restaurant operating
expenses 28,316 28,255 58,709 55,223
Income from restaurant
operations 2,352 2,873 5,210
5,699
Depreciation and amortization 350 326 736
655
General and administrative
expenses 1,047 1,111 2,005 2,221
Restructuring charge 7,448 --- 7,448 ---
Operating income (loss) (6,493) 1,436 (4,979)
2,823
Interest expense, net 795 1,125 1,610
2,277
Net income (loss) before
taxes (7,288) 311 (6,589) 546
Income tax expense --- --- --- ---
Net income (loss) ($7,288) $311 ($6,589) $546
Net Income (Loss) Per Share ($0.92) $0.09 ($0.83)
$0.15
Weighted average shares
outstanding 7,952 3,648 7,952
3,652
CONTACT: Main Street and Main Incorporated
Mark Walker
Chief Financial Officer
(602) 852-9000
or
Lippert/Heilshorn & Assoc., Inc.
Richard Foote/Jeffrey Volk
(212) 838-3777
E-Mail: RICK@SMTP.LHAI.COM