Back Bay Restaurant Group reports fourth quarter and fiscal year 1995 financial results

Business Wire, March 5, 1996

BOSTON--(BUSINESS WIRE)--March 5, 1996--Back Bay Restaurant Group, Inc. (NASDAQ:PAPA) announced today its operating results for the fourteen and fifty-three week periods ended December 31, 1995 and the thirteen and fifty-two week periods ended December 25, 1994.

Net sales in the fourth quarter of 1995 increased 9.4% to $25,909,000 from $23,680,000 in the same quarter last year. The increase in sales was attributable in large part to $1,821,000 of sales in the additional week in the fourth quarter of 1995 as compared with the fourth quarter of 1994. The Company reported a net loss of $2,485,000 or $.73 per share in the fourth quarter of 1995 compared with net a net loss of $578,000 or $.16 per share in last year's fourth quarter.

Results in the fourth quarter of both 1995 and 1994 were impacted by charges to earnings that should not affect the performance of the remaining restaurants going forward. In the fourth quarter of 1995, a pre-tax charge to earnings relating principally to the closing of three poorly performing restaurants was $5,441,000 or $.91 per share. Results for the fourth quarter of 1994 included charges of $1.7 million or $.28 per share relating in part to a writedown in anticipation of the closing of a poorly performing restaurant which was closed in 1995.

Net sales for fiscal year 1995 increased 8.9% to $93,496,000 from $85,831,000 in fiscal year 1994. The increase in sales was attributable in part to $1,821,000 of sales in the additional week in fiscal year 1995 as compared to fiscal year 1994. The net loss for 1995 was $2,810,000 or $.82 per share, compared with net income of $501,000 or $.14 per share in 1994. Comparable unit sales in the fourth quarter of 1995 increased 1.0%, with the American style restaurants approximately flat with the prior year and Papa.Razzi restaurants up 2% from 1994's fourth quarter.

In making today's announcement, Charles F. Sarkis, Chairman of the Board and CEO of Back Bay said: "Fiscal year 1995 proved to be a year of change for Back Bay Restaurant Group, Inc. Operating performance overall was not as strong as we had hoped. Some recently opened restaurants did not meet our expectations. One of our strongest performing restaurants, Charley's Eating and Drinking Saloon in Braintree, Massachusetts, that generated approximately $1 million in cash flow in 1994 was closed at the expiration of its 20 year lease. Four restaurants, all Papa.Razzi's, had been performing significantly below our expectations and were operating at a loss. These restaurants were closed as part of our management plan to reduce losses and maximize cash flow. In 1996 and beyond, the Company will no longer be subject to the financial and management drain of these units. We are cautiously optimistic about performance in 1996 due to the closing of the poorly performing units as well as the expected contribution of management initiatives begun in 1995."

Back Bay also announced today that it has reached agreement with The First National Bank of Boston on the amendment of its credit agreement. The amendment provides for the waiver of all past covenant defaults, amends certain covenants going forward and alters the repayment schedule and certain other aspects of the credit agreement. Back Bay Restaurant Group, Inc. owns and operates 33 fullservice restaurants located in New England, New York, New Jersey, and the District of Columbia. Fourteen feature Italian cuisine and are operated under the Papa.Razzi trade name. Nineteen restaurants serve American-style food and are operated under several trade names, including "Joe's American Bar & Grill," "Charley's Eating & Drinking Saloon," "J.C. Hillary's, Ltd.," "Famous Atlantic Fish Company," and "Rayz Riverside Cafe." -0-