Hospitality International Reports 43ATLANTA--(BUSINESS WIRE)--Feb. 20, 2001-- LongHorn Steakhouse Same-Store Sales Rise 6.3%, Its 12th Consecutive Quarterly Increase Philip J. Hickey, Jr., Chairman and Chief Executive Officer of RARE Hospitality International, Inc. (Nasdaq NM: RARE), today announced financial results for the fourth quarter and year ended December 31, 2000. Total revenues for the 13-week fourth quarter were $120,461,000, up 19.4% from $100,901,000 for the fourth quarter of 1999, a 13-week period ended December 26, 1999. Net earnings increased 48.8% for the fourth quarter of 2000 to $6,546,000 from $4,398,000, excluding nonrecurring expenses, for the fourth quarter of 1999. Diluted earnings per share for the fourth quarter of 2000 rose 43.5% to $0.33 from $0.23, excluding nonrecurring expenses, for the fourth quarter of 1999. Prior-period results have been adjusted to reflect a three-for-two stock split effected in September 2000. Total revenues for 2000, a 53-week period, were $464,028,000, an increase of 21.3% from $382,470,000 for 1999, a 52-week period. Net earnings for 2000 increased 54.0% to $23,930,000, excluding a nonrecurring item relating to the settlement of a previously disclosed legal dispute, from $15,540,000, excluding nonrecurring items, for 1999. Diluted earnings per share, excluding nonrecurring items, increased 48.2% to $1.23 for 2000 from $0.83 for 1999. Mr. Hickey remarked, "The RARE team delivered exceptional operating and financial results for the fourth quarter and all of 2000, extending the Company's track record of consistent, profitable growth. We seek to optimize the Company's long-term shareholder value through a consistently applied strategy of superior execution in our existing restaurants, moderate and controlled expansion of our restaurant base, and profit margin expansion through increased operating efficiencies and economies of scale. Our primary financial goal is to sustain a 20% annual growth rate in earnings per diluted share. The strength of the RARE team has allowed us to consistently achieve our financial goals over the last three years." LongHorn Steakhouse - Fourth-quarter revenues increased 25.0% for the LongHorn Steakhouse concept, which produced its 12th consecutive quarterly increase in same-store sales, with a 6.3% gain for the quarter. It also benefited from the opening of 17 new restaurants during the year - two of which opened in the fourth quarter - increasing the base of LongHorn Steakhouse restaurants in operation by 14.4% to 135 at year end from 118 at the end of 1999. RARE currently intends to open 18 to 21 LongHorn Steakhouse restaurants during 2001, with up to nine opening in the first quarter. It also continues to believe that the concept's sustainable same-store sales rate is appropriately targeted at 2% to 3%. The Capital Grille - Revenues for The Capital Grille increased 9.6% for the fourth quarter, primarily due to a 7.6% increase in same-store sales. One new The Capital Grille opened during the fourth quarter, bringing year-end restaurants in operation to 12 compared with 11 at the end of 1999. RARE expects to extend The Capital Grille concept's current record of 17 consecutive quarters of same-store sales increases in 2001, with a targeted annual increase of 3% to 4%. Three new The Capital Grille restaurants are currently scheduled to be opened during the first six months of 2001. Bugaboo Creek - The Bugaboo Creek concept also extended its record of consecutive-quarter increases in same-store sales - its sixth - with a 2.7% increase for the fourth quarter. This increase contributed to a 5.6% increase in the concept's revenues for the quarter. The Company is targeting slightly positive same-store sales for the concept in 2001. One new Bugaboo Creek restaurant opened during the fourth quarter, bringing the total in operation to 19 at year end versus 18 at the end of 1999, and the Company anticipates opening one new Bugaboo Creek restaurant during 2001 in the latter half of the year. The Company substantially strengthened its financial position subsequent to the end of 2000 with a sale of 2,000,000 shares of common stock at $26 per share, completed on February 8, 2001. Additionally, the underwriter has exercised an overallotment option to purchase an additional 300,000 shares at $26 per share. The Company will use the net proceeds of $57.6 million (including proceeds from the sale of overallotment shares) from the sale primarily to repay its existing credit facility. RARE currently expects to generate earnings per diluted share in a range of $1.42 to $1.44 for 2001, excluding a nonrecurring item related to the amendment of interest rate swap agreements. In connection with the repayment of amounts outstanding on the Company's existing credit facility, the Company has amended certain interest rate swap agreements. As a result of these amendments, the Company will incur a nonrecurring pretax charge of approximately $1.1 million (approximately $682,000, or $0.03 per diluted share, after tax) for the first quarter of 2001. RARE's 2001 fiscal year is a 52-week year compared with the 53- week fiscal year in 2000. As a result, the first quarter of 2001 will consist of 13 weeks, compared with 14 weeks for the first quarter for 2000. Diluted earnings per share, excluding nonrecurring item, is expected to be in a range of $0.40 to $0.41 for the first quarter of 2001 compared with $0.37 for the first quarter of 1999. For the second, third and fourth quarters of 2001, RARE is targeting 20% diluted earnings per share growth over the comparable quarter of 2000. Of course, the statements contained in this paragraph and the immediately preceding paragraph are forward-looking statements, and the achievement of these targets is dependent not only on RARE's continued execution of its goals, but also on risks and uncertainties listed below that could cause actual results, performance or developments to differ materially from those expressed or implied by these forward-looking statements. Mr. Hickey added, "We are genuinely proud of the outstanding record RARE has achieved over the last three years, and we are excited about the opportunities before us. We know there are challenges that must be overcome to leverage these opportunities, and we believe that the Company has demonstrated to the market that it has the capacity to succeed. We thank the over ten thousand team members at RARE Hospitality that have made our outstanding results possible." RARE Hospitality International will hold a conference call to discuss this release today at 9:30 a.m. Eastern time. Participants will have the opportunity to listen to the conference call over the Internet by going to www.rarehospitality.com and clicking Investor Relations or by going to www.streetevents.com or www.vcall.com. Participants are encouraged to go to the selected website at least fifteen minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at these sites shortly after the call through the end of business on February 27, 2001. Statements contained in this press release concerning future results, performance or expectations are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements in this press release are based upon information available to RARE on the date of this release. All forward-looking statements involve risks and uncertainties that could cause actual results, performance or developments to differ materially from those expressed or implied by those forward-looking statements, such as: RARE's ability to open the anticipated number of new restaurants on time and within budget; RARE's ability to continue to increase same-store sales at anticipated rates; a recession or other negative effect on business dining patterns, or some other negative effect on the economy in general; unexpected increases in cost of sales or other expenses; and the impact of any negative publicity or public attitudes related to the consumption of beef. Other risks and uncertainties include fluctuations in quarterly operating results, seasonality, guest trends, competition and risks associated with the development and management of new restaurant sites. More information about factors that potentially may affect RARE's results, performance or development is included in RARE's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 26, 1999, and RARE's press releases and other communications. RARE Hospitality International, Inc. currently owns, operates and franchises 179 restaurants, including 145 LongHorn Steakhouses located primarily in the southeastern and midwestern United States, 19 Bugaboo Creek restaurants located primarily in the northeastern United States and 13 The Capital Grille restaurants located across the country. -0-
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