Silver Diner narrows 1st-Q loss to $312,497 from $777,280

Nation's Restaurant News, August 2, 1999 by Richard L. Papiernik

ROCKVILLE, MD. -- Despite improved same-store sales and restaurant margins and decreased operating losses, Silver Diner Inc. ended its first quarter with a net loss of $312,497 as increased corporate-level expenses took their toll on earnings.

The 11-diner operator, however, was still able to improve its bottom line by $464,783 to move up from a net loss of $777,280 in the same quarter a year earlier.

Silver Diner has pulled back on expansion plans in 1999, pending a switch to its "new freestanding and mall-prototype locations" in the mid-Atlantic region, according to the company's president and chief executive Robert Giaimo.

"These new prototype units are designed to generate improved operating efficiencies and improved returns on investment at the company's current average-unit volumes," Giaimo said.

General and administrative expenses for the first quarter ended April 25 increased $160,959, or 18.6 percent, to about $1.03 million, from $866,008 a year earlier. The increase, the company said, was "primarily attributable to higher legal and accounting fees due to the preparation of the company's annual report, 10-K and annual proxy statement, the reconfiguration of the company's benefit plans and costs associated with certain site locations that are no longer being pursued."

In the meantime, Giaimo pointed out, restaurant-operating income, as a percentage of sales, rose 70 percent, and margins increased 2.5 percent. Net sales grew 5.3 percent, to $8.72 million, from $8.28 million in the first quarter of 1998.

Same-store sales climbed 8.3 percent. On a fully diluted basis, the company reported a net loss of 3 cents per share for the first quarter vs. 7 cents for the same year-ago period.