BJ's Restaurants announces Q1 net earnings of US$4.7M, down from year-ago earnings of US$8.3M; revenues rise 9.1% to US$205.8M

Nevin Barich

HUNTINGTON BEACH, California , May 1, 2014 (press release) – BJ's Restaurants, Inc. (BJRI) today reported financial results for its first quarter 2014 that ended on Tuesday, April 1, 2014.

First Quarter 2014 Highlights:

Total revenues increased 9.1% to $205.8 million

Total restaurant operating weeks increased 13%

Opened two new restaurants

Comparable restaurant sales declined 2.9%

Net income and diluted net income per share of $4.7 million and $0.16, respectively

Non-GAAP adjusted net income and non-GAAP adjusted diluted net income per share of $5.8 million and $0.20, respectively, when excluding the $1.6 million of pre-tax expenses, or $0.04 diluted net income per share, related to the shareholder settlement agreement announced on April 22, 2014.

"Our sales and operating trends improved during the second half of the quarter after several weeks of severe weather and industry-wide traffic headwinds at the beginning of 2014," commented Greg Trojan, President and Chief Executive Officer. "As a result of the momentum in the latter part of the quarter, comparable restaurant sales, restaurant level margins and operating margins exceeded the expectations we set at the time we reported fourth quarter results in mid-February. I am very proud of our restaurant operators for successfully managing items within their control during the quarter. In addition, we rolled out our first major new menu update in over a year along with a new brand positioning which were supported by a television, digital and print media campaign in mid-March. These efforts helped drive improved traffic for a solid finish to the first quarter."

"Our first quarter results also reflect a more balanced promotional spend compared to the fourth quarter of 2013 and benefited from our ongoing cost optimization initiatives to eliminate certain non-strategic expenses, while preserving the unique dining experience we deliver to our guests. While first quarter restaurant level margins improved on a quarterly sequential basis to 17.1% from 15.1%, we remain focused on returning to our historical restaurant level margins of at least 19% by leveraging our industry-leading guest traffic levels, improving our kitchen efficiencies through Project Q, implementing our new sales driving initiatives and maintaining a strong focus on managing restaurant operating costs. At the same time, we are focused on growing returns on invested capital as we've lowered our initial capital cost to build new restaurants with our 7,400 square foot prototype, which is expected to cost approximately $1 million less than our current prototype while achieving similar sales productivity. We believe these initiatives, coupled with our expansive long-term development opportunities, will enhance shareholder value going forward," Trojan said.

Development Update:

In the first quarter of 2014, BJ's opened two new restaurants in Gainesville, Virginia and Little Rock, Arkansas and currently plans to open three restaurants in the second quarter (of which one already opened in Katy, Texas). "BJ's remains committed to the continued execution of our national restaurant expansion plan as a key driver of creating sustainable long-term value for our shareholders," continued Trojan. "Our objective has always been to execute an operational and financial strategy that represents the best means of building value over the long-term for the BJ's concept, brand and shareholders. To achieve our goal of opening new restaurants with the lower-cost 7,400 square foot prototype, we now plan to open a total of 11 new restaurants this year and delay the opening of four restaurants until the first half of fiscal 2015. Among other things, this will allow the time necessary to re-submit plans for the new restaurant prototype design and allow our teams to focus even more on our sales building initiatives."

Based on the timing of the 11 new restaurant openings this year, BJ's expects total restaurant operating weeks will grow approximately 11% in 2014. The Company currently anticipates opening at least 15 new restaurants in fiscal 2015, all of which will feature the new prototype design.

Trojan concluded, "With significant cash flow from operations and a strong balance sheet, we are positioned with the financial capacity and flexibility to continue our long-term growth strategy of increasing restaurant operating weeks by at least 10% annually, while continuing to execute the recently announced sales building and brand initiatives and returning capital to shareholders through the $50 million share repurchase program announced in April."

Investor Conference Call and Webcast

BJ's Restaurants, Inc. will conduct a conference call on its first quarter 2014 earnings release today, May 1, 2014, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Senior management will discuss the financial results and host a question and answer session. In addition, a live audio webcast of the call will be accessible to the public on the "Investors" page of the Company's website located at http://www.bjsrestaurants.com and a recording of the webcast will be archived on the site for 30 days following the live event. Please allow 15 minutes to register and download and install any necessary software.

BJ's Restaurants, Inc. currently owns and operates 149 casual dining restaurants under the BJ's Restaurant & Brewery(R), BJ's Restaurant & Brewhouse(R), BJ's Pizza & Grill(R) and BJ's Grill(R) brand names. BJ's Restaurants offer an innovative and broad menu featuring award-winning, signature deep-dish pizza complemented with generously portioned salads, appetizers, sandwiches, soups, pastas, entrees and desserts, including the Pizookie(R) dessert. Quality, flavor, value, moderate prices and sincere service remain distinct attributes of the BJ's experience. The Company operates several microbreweries in addition to using independent third party brewers to produce and distribute BJ's critically acclaimed proprietary craft beers throughout the chain. The Company's restaurants are located in California (64), Texas (30), Florida (15), Arizona (6), Colorado (5), Nevada (5), Ohio (4), Washington (4), Oklahoma (3), Oregon (3), Kentucky (2), Virginia (2), Arkansas (1), Indiana (1), Kansas (1), Louisiana (1), Maryland (1) and New Mexico (1). Visit BJ's Restaurants, Inc. on the Web at http://www.bjsrestaurants.com.

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