CONTACT: William
Koziel
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Così, Inc. Reports 2014 First Quarter Results
DEERFIELD, IL - May 15, 2014 -
Così, Inc. (NASDAQ: COSI), the fast casual restaurant company,
today reported a net loss for the first quarter ended March 31,
2014 of $(3,126,000), or $(0.17) per basic and diluted common
share, compared with the net loss of $(2,741,000), or $(0.15) per
basic and diluted common share, reported for the 2013 first
quarter.
Così's total revenues for the 2014
first quarter decreased by $3,186,000 to $18,375,000 from
$21,561,000 in the 2013 first quarter. Company-owned net
restaurant sales decreased by $3,126,000 to $17,728,000 from
$20,854,000 for the 2013 first quarter. Franchise fees and royalty
revenues for the quarter contributed $647,000 compared to $707,000
in the 2013 first quarter. The decline in revenues compared
to last year's first quarter was due primarily to the decline in
comparable Company-owned store sales, the closure of company-owned
and franchise locations subsequent to the first quarter of 2013,
and lower royalties resulting from a decrease in comparable
franchise restaurant sales.
System-wide comparable restaurant
sales for the first quarter as measured for restaurants in
operation for more than 15 months recorded an aggregate decline of
9.5% as compared to the first quarter of 2013. The breakdown
in comparable sales between Company-owned and franchise-operated
restaurants are as follows:
For the 13 weeks ended
March 31, 2014
Company-owned
(12.4%)
Franchise-operated
(5.0%)
Total
System
(9.5%)
"Although the first quarter
results are disappointing, I remain confident in Così's long-term
potential," stated RJ Dourney, Così's President and Chief Executive
Officer, "We have made good progress in establishing the
performance standards by which we will operate to achieve success,
in developing a menu strategy that is better aligned with our
guest's expectation of better, better for you offerings and in
building the right team to execute the plan."
2014 First
Quarter Financial Performance Review
Così's aforementioned $3,126,000
decrease in first quarter Company-owned net sales as compared to
the 2013 first quarter was due primarily to a 12.4% decrease in
comparable restaurant net sales as well as a $653,000 decline in
net sales from five locations closed subsequent to the first
quarter of 2013. The decrease in Company-owned comparable net sales
during the quarter was comprised of a 12.9% decrease in traffic
partially offset by a 0.5% increase in average guest
check.
For the first quarter of 2014, Così reported a 630 basis point
increase in costs and expenses related to Company-owned restaurant
operations as a percentage of restaurant net sales compared with
the first quarter of 2013. The change resulted from increases of
520 and 110 basis points, as a percentage of net sales, in
occupancy and other restaurant operating expenses and labor and
related benefits expense, respectively. Food and beverage
costs as a percentage of net sales were consistent for both years
at 24.9%. The increase in occupancy and other restaurant
operating expenses and labor and related benefits expense as a
percentage of net sales was due primarily to the deleveraging
impact of the comparable restaurant net sales decline on the fixed
portion of these costs during the period.
During the first quarter of 2014,
the Company reduced its general and administrative expenses by
$388,000 or 14%, to $2,369,000 from $2,757,000 in the 2013 first
quarter.
Così reported that as of March 31,
2014 it had cash and cash equivalents of $2,813,000.
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 70 Company-owned and 49 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 © 2014 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 NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Così, Inc via Globenewswire
HUG#1786164