July 05, 2004

By: Josh Loutar
Website: http://www.1st-in-steaks.com

Lone Star Steakhouse & Saloon, Inc., announced preliminary unaudited operating results

Lone Star Steakhouse & Saloon, Inc., announced preliminary unaudited operating results for the twelve week first quarter ended March 23, 2004.

Income from continuing operations for the first quarter was $11,047,000 or $.53 per share which represents an increase of 23.1% from $8,971,000 or $.43 per share in last year’s first quarter.

Net income increased 27.3%, to $11,113,000 or $.53 per share from $8,730,000 or $.41 per share. Included in income from continuing operations and net income for both the first quarter of fiscal 2004 and 2003 was non-cash stock compensation expense of $910,000 and $393,000, respectively, which net of applicable income taxes, reduced income from continuing operations and net income by $520,000 and $196,000, respectively.

Net sales increased 15.2% to $160,596,000 from $139,373,000. This increase includes approximately $9,857,000 of net sales of the 20 Texas Land & Cattle Steak House restaurants acquired by the Company from January 28, 2004 through March 23, 2004.

First quarter comparable store sales growth was 5.6% for domestic Lone Star Steakhouse & Saloon restaurants, 12.2% for Sullivan’s Steakhouse restaurants and 27.4% for Del Frisco’s Double Eagle Steak House restaurants. Comparable store sales increased 12.8% for Texas Land & Cattle Steak House restaurants for the period from January 28, 2004 through March 23, 2004.

Jamie B. Coulter, Lone Star’s Chief Executive Officer, stated, This year’s first quarter included New Year’s Eve sales and profits that were not included in the first quarter of 2003. Regardless, we are very pleased with the results of what is a great first quarter by any measure.

Although we are still fighting higher beef and commodity prices, strong comparable store sales in all concepts have helped us increase earnings year over year. Our recent acquisition of Texas Land and Cattle appears to be accretive during 2004 and we are pleased with the integration of this brand into our portfolio of steakhouse restaurants.”

On January 28, 2004, the Company purchased the stock of Texas Land & Cattle Company out of bankruptcy. The purchase includes 20 operating Texas Land & Cattle Steak House restaurants, all of which are leased. For their fiscal year ended December 31, 2003, the 20 restaurants had approximately $55 million of net sales.

Subject to final settlement of the claims of unsecured creditors and transaction costs, the aggregate purchase price is expected to range between $24 and 25 million, including $15 to 16 million cash, approximately $2 million in Lone Star common stock and, $7 to 8 million in assumed liabilities.

About The Author:

Josh Loutar is a successful author and regular contributor to http://www.1st-in-steaks.com.  Great tips on buying top quality meats, steaks and seafood from the finest ranchers and butchers.