MIAMI--(BUSINESS WIRE)--Benihana Inc. (NASDAQ: BNHNA; BNHN), operator of the nation’s largest chain of Japanese theme and sushi restaurants, today reported results for its 12-week fiscal second quarter ended October 12, 2008.

Fiscal Second Quarter 2009 Results

For fiscal second quarter 2009, total revenues increased 4.5% to $70.0 million, compared with $67.0 million in fiscal second quarter 2008. Total restaurant sales increased 4.5% to $69.6 million from $66.6 million in the same quarter of the previous year. On a comparable basis, Company-wide comparable restaurant sales were (6.5%), including (5.1%) at Benihana teppanyaki, (11.4%) at RA Sushi, and (8.0%) at Haru. There were a total of 1,055 store-operating weeks in the second fiscal quarter of 2009 compared to 940 store-operating weeks in the second fiscal quarter of 2008.

“Restaurant sales were negatively impacted by several newsworthy events during the period, although we somewhat limited the associated margin impact through our focus on execution and tighter operational controls. While there is clearly no silver bullet in the face of an unprecedented falloff in consumer confidence, we do have several drivers in place that we believe will help move our business forward. These include our new ‘Now That’s Special’ marketing campaign, which highlights the distinctiveness of the Benihana experience, our anticipation of a slightly more favorable commodity environment beginning in calendar 2009, our realization of greater productivity in the areas of labor and purchasing, and our streamlined corporate infrastructure. Ultimately, we are confident that we have set the right course of action for ourselves in the current environment and will emerge as an even stronger Company when the economy turns around,” said Joel A. Schwartz, Chairman and Chief Executive Officer.

During the fiscal second quarter 2009, the Company opened a new RA Sushi restaurant in Chino Hills, CA and reopened a Benihana teppanyaki restaurant in Newport Beach, CA that had been under renovation. In addition, the Company completed the construction of a new Benihana teppanyaki restaurant in Dearborn, MI adjacent to the previous facility, which has since been torn down.

Restaurant operating profit for the fiscal second quarter 2009 was $9.0 million, or 12.9% of restaurant sales, compared to $10.3 million, or 15.4% of restaurant sales a year-ago.

Marketing, general and administrative expenses for the fiscal second quarter 2009 totaled $5.7 million, or 8.3% of restaurant sales, compared to $6.0 million, or 9.1% of restaurant sales in the same period last year. This resulted in income from operations of $3.4 million and $3.8 million, respectively.

Net income for the fiscal second quarter 2009 was $2.0 million, or $0.11 in diluted earnings per share, compared to $2.5 million, or $0.15 in diluted earnings per share in the same quarter last year.

Guidance

As a result of the Company’s performance through the first half of the fiscal year, given the continued economic issues affecting consumer discretionary spending, the Company has updated its guidance for fiscal 2009 to the following:

• Total restaurant sales of $303 million to $308 million, and 4,550 to 4,600 in total restaurant operating weeks (including the effect of 60 to 75 in gross operating weeks that are expected to be lost due to the Benihana teppanyaki renovation and revitalization program, which will be completed in the current fiscal year);
• The opening of a total of eight restaurants, including four Benihana teppanyaki and four RA Sushi restaurants, of which three RA Sushi restaurants have opened so far. Three RA Sushi restaurants, which were previously scheduled to open during the current fiscal year, have been postponed until early fiscal 2010 due to landlord delays;
• A total of approximately $0.4 million in accelerated depreciation costs, related to shortening the useful lives for those restaurants affected by the Company’s remodeling efforts, which has already been incurred in the first half of the fiscal year;
• Capital expenditures of approximately $47 million;
• Additional utilization of the available line of credit, resulting in an outstanding balance of approximately $40 million by the end of fiscal 2009;
• Diluted earnings per share ranging from $0.40 to $0.45. Diluted common shares outstanding are estimated to be approximately 15.3 million.

Mr. Schwartz continued, “We are doing everything we can to maintain shareholder value and our financial strength, but at the same time, need to reset our near-term expectations in the face of prevailing conditions. The state of our economy and near-term outlook on the consumer has underscored the importance of preserving capital and doing more with less. We are operating with this mindset and are doing everything in our power to manage our business with respect to both the credit markets and restaurant operating environment.”

Modification of Senior Revolving Credit Facility

On November 19, 2008, the Company reached an agreement with Wachovia Bank, N.A which modified the terms of its senior revolving credit facility. Under the amended terms, the Company can borrow up to $60 million, provided that $10 million of such commitment is subject to the bank successfully syndicating a portion of the loan or the Company attaining a certain leverage ratio, while easing, for an interim period, the covenant ratios previously defined. Along with these changes, applicable interest rate margins have been redefined, as well. The Company continues to have sufficient capital available to execute its operating and development plans, along with the flexibility necessary in today’s economic environment.

Mr. Schwartz concluded, “We believe we have reached an acceptable, mutually beneficial compromise with our lender, which will enable us to fund our business for the foreseeable future on more amenable terms.”

Conference Call Today

The Company will hold a conference call to discuss its fiscal second quarter 2009 results today at 5:00 PM ET. The conference call can be accessed live over the phone by dialing 1-888-256-9132, or for international callers, 1-913-312-1455. A replay will be available one hour after the call through November 27, 2008 and can be accessed by dialing 1-888-203-1112, or for international callers, 1-719-457-0820; the conference ID is 4913343. The call will also be webcast live from the investor relations portion of the Company's website at www.benihana.com.

About Benihana

Benihana Inc. (Nasdaq: BNHNA - News) (Nasdaq: BNHN - News) operates 90 restaurants nationwide, including 60 Benihana teppanyaki restaurants, nine Haru sushi restaurants, and twenty-one RA Sushi Bar restaurants. Under development at present are fourteen restaurants -- eight Benihana teppanyaki restaurants and six RA Sushi restaurants. In addition, 19 franchised Benihana teppanyaki restaurants are operating in the U.S., Latin America and the Caribbean.

To learn more about the Company and its three Japanese theme and sushi restaurant concepts, please view the corporate video at www.benihana.com/about/video

Benihana Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(Unaudited)
(in thousands except per share data)
	Three Periods Ended
	12-Oct-08				14-Oct-07		$ Change				% Change
Revenues
Restaurant sales	$	69,575			$	66,586	$	2,989			4.5	%
Franchise fees and royalties		405				383		22			5.7	%
Total revenues		69,980				66,969		3,011			4.5	%
Costs and Expenses
Cost of food and beverage sales		16,899				15,663		1,236			7.9	%
Restaurant operating expenses		43,720				40,668		3,052			7.5	%
Restaurant opening costs		248				752		(504	)		-67.0	%
Marketing, general and administrative expenses		5,747				6,040		(293	)		-4.9	%
Total operating expenses		66,614				63,123		3,491			5.5	%
Income from operations		3,366				3,846		(480	)		-12.5	%
Interest (expense) income, net		(334		)		86		(420	)		-488.4	%
Income before income taxes		3,032				3,932		(900	)		-22.9	%
Income tax provision		1,061				1,423		(362	)		-25.4	%
Net income		1,971				2,509		(538	)		-21.4	%
Less: accretion of issuance costs and preferred stock dividends		251				250		1			0.4	%
Net income attributable to common stockholders	$	1,720			$	2,259	$	(539	)		-23.9	%
Earnings Per Share
Basic earnings per common share	$	0.11			$	0.15	$	(0.04	)		26.7	%
Diluted earnings per common share	$	0.11			$	0.15	$	(0.04	)		26.7	%
Weighted Average Shares Outstanding
Basic		15,290				15,222		68			0.4	%
Diluted		15,306				17,156		(1,850	)		-10.8	%

Benihana Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(Unaudited)
(in thousands except per share data)
	Seven Periods Ended
	12-Oct-08			14-Oct-07		$ Change				% Change
Revenues
Restaurant sales	$	163,500		$	155,955	$	7,545			4.8	%
Franchise fees and royalties		940			949		(9	)		-0.9	%
Total revenues		164,440			156,904		7,536			4.8	%
Costs and Expenses
Cost of food and beverage sales		39,499			36,698		2,801			7.6	%
Restaurant operating expenses		102,640			93,265		9,375			10.1	%
Restaurant opening costs		983			1,461		(478	)		-32.7	%
Marketing, general and administrative expenses		14,523			15,066		(543	)		-3.6	%
Total operating expenses		157,645			146,490		11,155			7.6	%
Income from operations		6,795			10,414		(3,619	)		-34.8	%
Interest (expense) income, net		(390	)		111		(501	)		-451.4	%
Income before income taxes		6,405			10,525		(4,120	)		-39.1	%
Income tax provision		2,242			3,810		(1,568	)		-41.2	%
Net income		4,163			6,715		(2,552	)		-38.0	%
Less: accretion of issuance costs and preferred stock dividends		585			584		1			0.2	%
Net income attributable to common stockholders	$	3,578		$	6,131	$	(2,553	)		-41.6	%
Earnings Per Share
Basic earnings per common share	$	0.23		$	0.41	$	(0.18	)		43.9	%
Diluted earnings per common share	$	0.23		$	0.39	$	(0.16	)		41.0	%
Weighted Average Shares Outstanding
Basic		15,284			15,103		181			1.2	%
Diluted		15,342			17,095		(1,753	)		-10.3	%

Benihana Inc. and Subsidiaries
Sales by Concept
(Unaudited)
(in thousands)
	Three Periods Ended
	12-Oct-08		14-Oct-07		$ Change				% Change
Total restaurant sales by concept:
Benihana	$	46,413	$	48,971	$	(2,558	)		-5.2	%
Haru		8,742		7,509		1,233			16.4	%
RA Sushi		14,420		10,106		4,314			42.7	%
Total restaurant sales	$	69,575	$	66,586	$	2,989			4.5	%
Comparable restaurant sales by concept:
Benihana	$	44,251	$	46,651	$	(2,400	)		-5.1	%
Haru		6,907		7,509		(602	)		-8.0	%
RA Sushi		8,885		10,028		(1,143	)		-11.4	%
Total comparable restaurant sales	$	60,043	$	64,188	$	(4,145	)		-6.5	%

Benihana Inc. and Subsidiaries
Sales by Concept
(Unaudited)
(in thousands)
	Seven Periods Ended
	12-Oct-08		14-Oct-07		$ Change				% Change
Total restaurant sales by concept:
Benihana	$	110,646	$	114,485	$	(3,839	)		-3.4	%
Haru		20,631		17,914		2,717			15.2	%
RA Sushi		32,223		23,556		8,667			36.8	%
Total restaurant sales	$	163,500	$	155,955	$	7,545			4.8	%
Comparable restaurant sales by concept:
Benihana	$	101,812	$	106,245	$	(4,433	)		-4.2	%
Haru		16,514		17,914		(1,400	)		-7.8	%
RA Sushi		21,116		23,478		(2,362	)		-10.1	%
Total comparable restaurant sales	$	139,442	$	147,637	$	(8,195	)		-5.6	%

Benihana Inc. and Subsidiaries
Restaurant Operating Profit
(Unaudited)
(in thousands)
	Three Periods Ended
	12-Oct-08		14-Oct-07		$ Change				% Change
Restaurant sales	$	69,575	$	66,586