Tuesday, May 16, 2006
Western Sizzlin shakes things up
Jenny Kincaid Boone
Jenny reports on the latest news on the Roanoke Valley retail industry.
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Western Sizzlin ended the first quarter of this year in the black, but barely, and per-share earnings amounted to less than a penny a common share.
Net income for the Roanoke-based steak restaurant company was $6,298 for the quarter ended March 31, with zero earnings a share. Still, that was a modest improvement from the net loss of $66,581 during the first quarter of last year.
The loss was a result of the company closing a Great American Steak & Buffet restaurant in Knoxville, Tenn., last year because it was underperforming, said Robyn Mabe, Western Sizzlin's chief financial officer, in a previous interview.
She did not return calls for comment Monday about the company's latest quarterly performance.
Sales during the first quarter were slow at Western Sizzlin's company-owned restaurants and its franchises. All of Western Sizzlin's company restaurants operate under the name Great American Steak & Buffet Co. Its franchise locations have the names Western Sizzlin Steak & More, Western Sizzlin Wood Grill and Quincy Steakhouses.
Sales fell 16 percent for the first quarter, compared with sales at its restaurants during the same period last year. Western Sizzlin had revenue of $4.1 million, compared with $4.9 million in the first quarter of 2005.
The sales drop at Western Sizzlin's company-owned restaurants resulted from some of them closing in the last two years, according to its quarterly report. Two restaurants closed in 2005, one because of fire damage, and another in Northern Virginia closed for three weeks for renovations earlier this year.
The company operates a total of 137 company and franchise restaurants in 19 states. Five of these eateries are company-owned. In the last quarter, Western Sizzlin closed three franchise restaurants, ending the first quarter with 132 franchises in all.
Meanwhile, Western Sizzlin executives have said the company is set to make changes. It is developing a design for a fast-casual restaurant and remodeling some of its existing restaurants.
Western Sizzlin also recently elected Sardar Biglari of San Antonio as the new chairman of its board of directors, and it cut the size of its board to five members. Six of its members resigned in March in a move to reduce the size of the board because many were Western Sizzlin franchisees, said James Verney, Western Sizzlin's president and chief executive officer, during a previous interview.
And a new high-profile franchisee is converting two of its restaurants to the Western Sizzlin brand. Star Buffet, a public company that operates several different restaurant brands, will operate two Western Sizzlin franchises, and it may test a new company prototype restaurant, according to a news release. The company, headquartered in Arizona, may acquire other Western Sizzlin franchises. Star Buffet's restaurant brands include Hometown Buffet, JB's and BuddyFreddys.
Western Sizzlin shares trade on the over-the-counter bulletin board. Shares closed Monday at 97 cents apiece, down 1 cent from the previous close.
