CONTACT: William
Koziel
(847) 597-8803
Così, Inc. Reports 2013 Third Quarter Results
DEERFIELD, IL - November 14, 2013
- Così, Inc. (NASDAQ: COSI), the fast casual restaurant company,
today reported a net loss for the third quarter ended September 30,
2013 of $(2,455,000), or $(0.14) per basic and diluted common
share, compared with a net loss of $(1,354,000), or $(0.08) per
basic and diluted common share, reported for the 2012 third
quarter. The calculated net loss per share for both quarters
reflects the impact of the reverse stock split that was effected on
May 9, 2013.
Così's total revenues for the 2013
third quarter decreased by $2,947,000 to $21,412,000 from
$24,359,000 in the 2012 third quarter. Company-owned net
restaurant sales decreased by $3,018,000 to $20,602,000 from
$23,620,000 in the 2012 third quarter. Franchise fees and royalty
revenues for the quarter contributed $810,000 compared to $739,000
in the 2012 third quarter. The decline in revenues compared
to last year's third quarter was due primarily to the closure of
seven Company-owned and seven franchise locations during and
subsequent to the third quarter of 2012 as well as the decline in
comparable Company-owned store sales.
System-wide comparable restaurant
sales for the third quarter as measured for restaurants in
operation for more than 15 months recorded an aggregate decline of
3.6% as compared to the third quarter of 2012. The breakdown
in comparable sales between Company-owned and franchise-operated
restaurants are as follows:
For the 13 weeks ended
September 30, 2013
Company-owned
(4.8%)
Franchise-operated (1.9%)
Total
System
(3.6%)
"Sales continued to decline in the
quarter despite our efforts to improve customer service and enhance
operational practices in our stores. We are working
diligently to reverse this trend and are acutely aware that the
viability of our business is dependent on the speed and
effectiveness of our efforts," said Stephen Edwards, Così's
President and Chief Executive Officer.
2013 Third
Quarter Financial Performance Review
Così's aforementioned $3,018,000
decrease in third quarter Company-owned net sales as compared to
the 2012 third quarter was due primarily to a $1,983,000 decline in
net sales from seven locations closed during and subsequent to the
third quarter of 2012 as well as a 4.8% decrease in comparable
restaurant net sales. The decrease in Company-owned
comparable net sales during the quarter was comprised of a 6.1%
decrease in traffic partially offset by a 1.3% increase in average
guest check.
For the third quarter, Così reported a 770 basis point increase in
costs and expenses related to Company-owned restaurant operations
as a percentage of restaurant net sales compared with the third
quarter of 2012. The change resulted from increases of 350, 260 and
160 basis points, as a percentage of net sales, in labor and
related benefits expense, occupancy and other restaurant operating
expenses and the cost of food and beverage, respectively. The
increase in labor and related benefits expense as a percentage of
net sales was due largely to the deployment of additional hourly
labor to enhance guest service and improve speed of service as well
as the deleveraging impact of the comparable restaurant net sales
decline on the fixed portion of labor costs in the period.
Also impacting our labor and related benefits expense for the
quarter was an increase in employee health care costs. The
increase in the cost of occupancy and other restaurant operating
expenses was due to the deleveraging impact of the comparable
restaurant net sales decline on the fixed portion of occupancy
costs as well as higher costs for repairs and maintenance of
existing Company restaurants. The increase in the cost of
food and beverage as a percentage of net sales was largely due to a
sales mix shift to menu items that have a higher cost as a
percentage of net sales, the impact of the launch of the new bowl
category this year which has a higher than average cost of goods
when compared to the other entrée categories transaction and a year
over year decline in beverage sales.
During the third quarter of 2013,
the Company's general and administrative expenses decreased by
$421,000, to $2,565,000 or 12.0% of total revenues from $2,986,000
or 12.6% of total revenues in the 2012 third quarter due primarily
to labor savings resulting from an administrative headcount
reduction in the second quarter of 2013.
Così reported that as of September
30, 2013 it had cash and cash equivalents of $8,252,000 and
virtually no debt other than lease obligations.
About Così,
Inc.
Così®
(http://www.getcosi.com) is a national fast casual restaurant chain
that has developed featured foods built around a secret,
generations-old recipe for crackly crust flatbread. This artisan
bread is freshly baked in front of customers throughout the day in
open-flame stone-hearth ovens prominently located in each of the
restaurants. Così's warm and urbane atmosphere is geared towards
its sophisticated, upscale, urban and suburban guests. There are
currently 71 Company-owned and 52 franchise restaurants operating
in sixteen states, the District of Columbia, the United Arab
Emirates, and Costa Rica. The Così® vision is to
become America's favorite fast casual restaurant by providing
customers authentic, innovative, savory food while remaining an
affordable luxury.
The Così® menu features
Così® sandwiches,
freshly-tossed salads, bowls, breakfast wraps, melts, soups,
Così®
Squagels®, flatbread
pizzas, S'mores, snacks and other desserts, and a wide range of
coffee and coffee-based drinks and other specialty beverages.
Così® restaurants
are designed to be welcoming and comfortable with an eclectic
environment. Così's sights, sounds, and spaces create a tasteful,
relaxed ambience that provides a fresh and new dining
experience.
"Così," "(Sun & Moon Design)"
and related marks are registered trademarks of Così, Inc. in the
U.S.A. and certain other countries. Copyright © 2013 Così, Inc. All
rights reserved.
"SAFE HARBOR" STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This press
release contains statements that constitute forward- looking
statements under the federal securities laws. Forward-looking
statements are statements about future events and expectations and
not statements of historical fact. The words "believe," "may,"
"will," "should," "anticipate," "estimate," "expect," "intend,"
"objective," "seek," "plan," "strive," or similar words, or
negatives of these words, identify forward- looking statements. We
qualify any forward-looking statements entirely by these cautionary
factors. Forward-looking statements are based on management's
beliefs, assumptions and expectations of our future economic
performance, taking into account the information currently
available to management. Forward-looking statements involve risks
and uncertainties that may cause our actual results, performance or
financial condition to differ materially from the expectations of
future results, performance or financial condition we express or
imply in any forward-looking statements. Factors that could
contribute to these differences include, but are not limited to:
the cost of our principal food products and supply and delivery
shortages and interruptions; labor shortages or increased labor
costs; changes in demographic trends and consumer tastes and
preferences, including changes resulting from concerns over
nutritional or safety aspects of beef, poultry, produce, or other
foods or the effects of food-borne illnesses, such as E. coli, "mad
cow disease" and avian influenza or "bird flu"; competition in our
markets, both in our business and in locating suitable restaurant
sites; our operation and execution in new and existing markets;
expansion into new markets including foreign markets; our ability
to attract and retain qualified franchisees and our franchisees'
ability to open restaurants on a timely basis; our ability to
locate suitable restaurant sites in new and existing markets and
negotiate acceptable lease terms; the rate of our internal growth
and our ability to generate increased revenue from our existing
restaurants; our ability to generate positive cash flow from
existing and new restaurants; fluctuations in our quarterly results
due to seasonality; increased government regulation and our ability
to secure required government approvals and permits; our ability to
create customer awareness of our restaurants in new markets; the
reliability of our customer and market studies; cost effective and
timely planning, design and build out of restaurants; our ability
to recruit, train and retain qualified corporate and restaurant
personnel and management; market saturation due to new restaurant
openings; inadequate protection of our intellectual property; our
ability to obtain additional capital and financing; adverse weather
conditions which impact customer traffic at our restaurants; and
adverse economic conditions. Further information regarding factors
that could affect our results and the statements made herein are
included in our filings with the Securities and Exchange
Commission.
Additional information is available
on Così's website at
http://www.getcosi.com in the investor relations section.
Financial Statements
This
announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: Così, Inc via Thomson Reuters ONE
HUG#1743097