TAMPA, Fla., May 9 /PRNewswire-FirstCall/ -- Shells Seafood
Restaurants, Inc. (OTC:SHLL) (BULLETIN BOARD: SHLL) today reported
financial results for its first quarter ended March 30, 2008. Key
metrics for the first quarter of 2008, compared to the first
quarter of 2007: -- Revenues decreased 20.4% to $10.7 million. --
Comparable restaurant sales decreased 15.6%. -- Net income of
$120,000, was $85,000 better than the first quarter of 2007.
Excluding non-recurring items, net income of $263,000, compared to
a net loss of $11,000. -- Earnings per share diluted of $0.00, same
as the first quarter of 2007. Excluding non-recurring items,
earnings per share diluted of $0.01, compared to a net loss per
share of $0.00. Marc Bernstein, newly-appointed CEO, commented,
"The first quarter of 2008 continued to be challenging for both
Shells and most casual dining restaurants within Florida, generally
due to an increasingly difficult economy. Although first quarter
sales continued to decline, we diligently reduced our operating and
administrative expenses in the midst of a broad range of externally
driven cost increases. As a result, we achieved an improvement in
net income in comparison to the first quarter of last year."
Bernstein further added, "Our efforts going forward are fully
focused on providing our guests with compelling offerings of great
food at very favorable price points. Our mission is to drive guest
traffic and sales, while holding expenses in-line. We are taking
immediate action toward repositioning Shells as a relevant brand to
overcome this economic downturn and re-establish ourselves for
future long- term success." Operating Results Revenues for the
first quarter of 2008 decreased 20.4% to $10,697,000 from
$13,435,000 in the first quarter of 2007, predominantly due to a
15.6% decrease in same store sales and; to a lesser extent, the
second and fourth quarter 2007 dispositions of two under performing
restaurants. As of the end of the first quarter of 2008, we had 23
restaurants in operation, compared to 25 restaurants at the end of
the first quarter of 2007. Restaurant operating costs, consisting
of food and beverage costs, labor, other operating costs and
depreciation expense, were $9,475,000, or 89.2% of restaurant
sales, in the first quarter of 2008, compared to $12,273,000, or
91.6% of restaurant sales, in the first quarter of 2007. The 2.4%
decrease in restaurant operating costs, as a percentage of
restaurant sales, primarily resulted from a 2.2% reduction in food
and beverage costs, reflecting our menu repositioning implemented
at the beginning of the first quarter of 2008. General &
administrative expenses were $946,000, or 8.8% of revenues, in the
first quarter of 2008 compared to $1,025,000, or 7.6% of revenues,
in the first quarter of 2007. Exclusive of $143,000 in
non-recurring severance expenses recognized in the first quarter of
2008, general & administrative expenses were $803,000, or 7.5%
of revenues. The reduction from the comparable period last year was
mostly due to a reduction in salaries, bonuses and related expenses
of $104,000 and a reduction in stock option expense of $44,000.
Income from operations in the first quarter of 2008 of $276,000 was
$139,000 better than the income from operations in the comparable
period of 2007. Excluding the non-recurring item in the first
quarter of 2008, income from operations of $419,000 was $282,000
better than the comparable period of 2007. Net income in the first
quarter of 2008 was $120,000, or $0.00 per diluted share based upon
25.4 million diluted common shares outstanding, compared to net
income in the first quarter of 2007 of $35,000, or $0.00 per
diluted share based upon 25.5 million diluted common shares
outstanding. As adjusted for non-recurring items as summarized in
the ensuing financial tables, net income in the first quarter of
2008 was $263,000, or $0.01 per diluted share, compared to a net
loss in the first quarter of 2007 of $11,000, or $0.00 per share.
About the Company The Company manages and operates 23 full-service,
neighborhood seafood restaurants in Florida under the name
"Shells". Shells restaurants feature a wide selection of seafood
items, including shrimp, oysters, clams, mussels, scallops,
lobster, crab and daily fresh fish specials, cooked to order in a
variety of ways: steamed, saut�ed, grilled, blackened and fried.
Shells restaurants also offer a wide selection of signature pasta
dishes, appetizers, salads, desserts and full bar service.
Forward-Looking Statements In addition to seasonal fluctuations,
the Company's quarterly and annual operating results are affected
by a wide variety of other factors that could materially and
adversely affect revenues and profitability, including changes in
consumer preferences, tastes and eating habits; increases in food,
labor costs and other operating expenses; the availability of food
acceptable to our quality standards at acceptable prices; the
availability of qualified labor; national, regional and local
economic and weather conditions; international economic, cultural
and political conditions; promotional timings and seasonality;
demographic trends and traffic patterns; changes in travel and
tourism tendencies, particularly in light of world events;
competition from other restaurants and food service establishments;
availability of third party financing to fund capital or operating
activities, if required; changes in personnel, including senior
management; and the timing, costs and charges relating to
restaurant openings, closings and remodelings. As a result of these
and other factors, the Company may experience material fluctuations
in future operating results on a quarterly or annual basis, which
could materially and adversely affect its business, financial
condition and stock price. Furthermore, this press release and
other documents filed by the Company with the Securities and
Exchange Commission ("SEC") contain certain forward-looking
statements with respect to the business of the Company and the
industry in which it operates. These forward-looking statements are
subject to certain risks and uncertainties, including those
mentioned above, which may cause results to differ significantly
from these forward-looking statements. The Company undertakes no
obligation to update these forward looking statements on a regular
basis. An investment in the Company involves various risks,
including those mentioned above and those that are detailed from
time- to-time in the Company's SEC filings. SHELLS SEAFOOD
RESTAURANTS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In
thousands, except per share data) (Unaudited) Thirteen Week Period
Ended March 30, 2008 April 1, 2007 Amount Percent Amount Percent
Revenues Restaurant sales $10,622 99.3% $13,396 99.7% Management
fees 31 0.3% 39 0.3% International fees 44 0.4% 0 0.0% Total
Revenues $10,697 100.0% $13,435 100.0% Costs and expenses: Cost of
sales (1) 3,220 30.3% 4,356 32.5% Labor and other related expenses
(1) 3,137 29.5% 3,890 29.0% Other restaurant operating expenses (1)
2,753 25.9% 3,521 26.3% Depreciation and amortization (1) 365 3.4%
506 3.8% Total restaurant operating costs (1) 9,475 89.2% 12,273
91.6% Restaurant operating income (1) 1,222 11.5% 1,162 8.7%
General and administrative expenses 946 8.8% 1,025 7.6% Income from
operations 276 2.6% 137 1.0% Interest expense, net (76) -0.7% (66)
-0.5% Other (expense) income (6) -0.1% 39 0.3% Income before
elimination of minority partner interest 194 1.8% 110 0.8%
Elimination of minority partner interest (74) -0.7% (75) -0.6% Net
income $120 1.1% $35 0.3% Net income per share of common stock:
Basic $0.01 $0.00 Diluted $0.00 $0.00 Average number of weighted
common shares outstanding: Basic 23,538 17,843 Diluted 25,403
25,475 (1) Percentage as a percent of restaurant sales SHELLS
SEAFOOD RESTAURANTS, INC. (Dollars in thousands, except per share
data) (Unaudited) March 30, April 1, 2008 2007 Number of
restaurants at end of period: Company-owned restaurants (1) 20 22
Licensed restaurants 3 3 Total 23 25 Balance sheet data: Cash $774
$1,047 Working capital (deficiency) (4,177) (3,852) Total assets
11,535 14,374 Long-term debt 616 1,713 Stockholders' equity 516
4,554 (1) Includes one joint venture restaurant in which the
Company has a 51% equity interest. Quarter Ended NON-RECURRING
ITEMS: March 30, April 1, 2008 2007 Net income, as reported $120
$35 Non-recurring (expense) income: Severance Pay (143) - Lease
renewal costs - (39) Proceeds from legal settlement - 85 Total
non-recurring (expense) income (143) 46 Net income (loss),
excluding non-recurring items 263 (11) Net income (loss) per share:
Diluted, as reported $0.00 $0.00 Diluted, excluding non-recurring
items $0.01 $(0.00) DATASOURCE: Shells Seafood Restaurants, Inc.
CONTACT: Warren Nelson, Shells Seafood Restaurants, Inc.,
+1-813-961-0944 Web site: http://www.shellsseafood.com/
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