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EXHIBIT 99.1
SIZZLER INTERNATIONAL, INC.
6101 W. Centinela Ave., Suite 200
Culver City, CA 90230
(310) 568-0135
NYSE:SZ
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AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
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Steven Selcer Haris Tajyar Moira Conlon Jim Crockett
Vice President and CFO General Information Investor Contact Media Contact
(310) 568-0135 (310) 442-0599 (310) 442-0599 (310) 442-0599
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FOR IMMEDIATE RELEASE
Tuesday, June 20, 2000
SIZZLER INTERNATIONAL ANNOUNCES GAINS
IN FOURTH QUARTER AND YEAR-END RESULTS
Company Continues to Achieve Operational and Financial Improvements
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HIGHLIGHTS:
. Fourth quarter revenues increase to $55.3 million from $54.6 million
. Fourth quarter same-store-sales growth of 5.7% for Sizzler USA and 3.7% for
KFC
. Sizzler USA and KFC guest counts continue to increase
. Fourth quarter net income improves to $2.7 million vs. $2.5 million
. Company enters into an agreement to acquire Oscar's restaurants
. 23 of 64 company Sizzler remodels completed
CULVER CITY, CA--June 20, 2000--Sizzler International, Inc. (NYSE: SZ) today
reported financial and operational improvements for the fourth quarter and
fiscal year ended April 30, 2000.
For the fourth quarter, the company reported revenues of $55.3 million, an
increase of 1% over the $54.6 million in the comparable period in fiscal 1999.
Excluding the effect of the weakening in the Australian dollar exchange rate,
revenues would have been $56.6 million, an increase of 4%. Sizzler Sizzler
International, Inc. reported net income for the fourth quarter of $2.7 million,
or $0.10 per basic share, an 8% increase over net income of $2.5 million, or
$0.09 per basic share in the same period a year ago. For the fiscal year ended
April 30, 2000, the company reported revenues of $239.5 million, an increase of
6% over revenues of $226.3 million in fiscal 1999. Excluding one-time items,
Sizzler reported net income of $8.6 million, or $0.30 per basic share for fiscal
2000, compared with net income of $7.4 million, or $0.26 per basic share in
fiscal 1999. Including the non-recurring items, the company reported net income
of $2.4 million, or $0.08 per basic share for fiscal 2000.
Positive Trends in Same Store Sales Growth
For the fourth quarter, same store sales increased 5.7% across company owned
U.S. Sizzler locations; 0.8% in the Australian Sizzler locations; and 3.7% from
Sizzler's KFC units. The increase in same store sales for the U.S. Sizzler
locations was primarily driven by a 2.5% increase in customer counts.
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"Sizzler experienced growth across all business segments for the fourth quarter
and fiscal year," said Charles Boppell, President and CEO of Sizzler
International. "Although we'll be facing the challenge of the upcoming goods
and services tax in Australia, as well as a potentially weak Australian dollar,
we expect to maintain positive growth in the quarters ahead. Our recent gains
have been primarily as a result of our continued success in the improvement of
our restaurant operations, including positive customer response to the enhanced
food quality and cooking methods, and the continuing success Sizzler is
experiencing with its store remodeling and re-imaging program," continued Mr.
Boppell.
"We have successfully completed the re-imaging of 23 of our stores," commented
Thomas E. Metzger, FMP, President of Sizzler USA. "We're experiencing solid
increases in sales and customer counts that we believe will continue in the
quarters ahead as we continue to roll out the re-imaging program."
Oscar's Acquisition
Following the end of the fourth quarter, the company entered into an acquisition
agreement with Oscar's, a successful San Diego-based restaurant company. Under
the agreement, Sizzler will acquire an 82% stake in the growing company in
return for $16 million in cash, warrants on 1,250,000 shares of Sizzler stock at
$4.00 per share, and a performance based earnout which may amount to $3.1
million or more.
"The Oscar's acquisition, which is expected to be accretive after its first full
year, is the final element of our four pronged growth strategy. We are already
on-track and progressing as expected with the three other elements of the
strategy - growing the domestic Sizzler revenues, expanding in Australia through
new units and co-branding, and improving our stores in the Asian region. As all
of these strategies come together, we believe we will experience continued
success throughout fiscal 2001 and beyond," concluded Mr. Boppell.
Due to the pending announcement of the Oscars transaction, Sizzler did not
repurchase shares during the fourth quarter. The company has completed the
repurchase of approximately 706,700 of the 1.5 million shares of common stock it
has been authorized to repurchase by its Board of Directors. Subject to
applicable law and other factors, the company expects to resume its stock
repurchase program.
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Discussion of Non-Recurring Items
The company's fiscal 2000 financials include a net charge of $6.2 million for
non-recurring items that were recognized in the third fiscal quarter ending
February 6, 2000. These items consist of a $6.6 million non-cash charge
representing the final accounting of its reorganization, a $5.5 million loss on
the sale-leaseback of certain Australian properties, and a $5.9 million tax
benefit.
Sale-Leaseback Accounting
To date, Sizzler has closed sale-leaseback transactions for 49 of the 67
Australian KFC and Sizzler restaurants expected to be monetized via sale-
leasebacks as announced in November 1999. The company expects to realize
approximately AU $55 million in cash once the sales are complete. Of this
amount, Sizzler has received approximately AU $42 million from the transactions
that have closed. The company expects to utilize the proceeds of the sale-
leasebacks to finance the capital expenditures made as part of its strategic
growth plan, including the Oscar's acquisition, restaurant remodeling and
repositioning.
Dismissal of Lawsuit
The lawsuit filed by a former employee last August has been resolved with no
material financial impact on the company.
Investor Conference Call
Sizzler will be holding an investor conference call to discuss the Company's
financial and operational results today at 11:00 am EDT. Investors will have
the opportunity to listen to the conference call over the Internet through Vcall
at http://www.vcall.com. To listen to the live call, please go to the web site
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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 shortly after the call.
About Sizzler
Sizzler International, Inc. operates, franchises or joint ventures 348 Sizzler
restaurants worldwide, in addition to the 101 KFC restaurants in Queensland,
Australia.
To the extent that certain statements contained in this document may be deemed
under federal securities laws to be forward-looking statements, Sizzler intends
that they be subject to the safe-harbor applicable to forward-looking statements
under such laws. Such statements may include, but are not limited to,
statements regarding (i) the closing of additional sale-leaseback transactions,
(ii) the amount of cash proceeds and the gain or loss to be realized from such
sale-leaseback transactions, (iii) the utilization of the proceeds of such sale-
leaseback transactions; (iv) the continued positive impact of the remodel
program on sales and customer counts, (v) the closing of the Oscar's
transaction, the amount of any earnout payments, and the time at which such
acquisition will be accretive; (vi) the continuation of the company's stock
repurchase program, and (vii) the continued success of the company's four
pronged growth strategy and continued growth across all business segments
through fiscal 2001 and beyond. Sizzler cautions that these statements are
qualified by important factors that could cause actual results to differ from
those reflected by the forward-looking statements contained herein. Such
factors include, but are not limited to, (a) the market for the company's
properties, which may affect the company's ability to close additional sale-
leaseback transactions or the values realized in such transactions or; (b)
changes in the company's cash needs, which may impact utilization of the sale-
leaseback transactions proceeds; (c) the failure of the company's newly
remodeled stores and/or new food offerings to continue to appeal to
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customers; (d) the failure to complete the remodel program as scheduled; (e) the
satisfaction of all conditions to consummation of the Oscar's acquisition,
including but not limited to any required government and other approvals; (f)
the company's ability to operate the Oscar's division profitably and
successfully open new units; (g) possible negative impact on the company's
Australia operations as a result of the implementation of the new goods and
services tax in Australia (h) the possible negative impact of exchange rate
fluctuations; and (i) other risks as detailed from time to time in Sizzler's SEC
reports, including Quarterly Reports on Form 10Q, Current Reports on Form 8-K,
and Annual Reports on Form 10-K.
For more information on Sizzler International, Inc. via facsimile at no cost,
simply call 1-800-PRO-INFO and dial client code "SZ."
[ tables to follow ]
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SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
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Twelve Weeks Ended
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April 30, April 30,
2000 1999
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Revenues
Restaurants $ 52,991 $ 52,708
Franchise operations 2,330 1,924
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Total revenues 55,321 54,632
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Costs and Expenses
Cost of sales 19,223 19,446
Labor and related expenses 14,527 13,611
Other operating expenses 11,381 11,463
Depreciation and amortization 1,744 2,468
Non-recurring items - -
General and administrative expenses 4,881 4,146
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Total operating costs 51,756 51,134
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Interest expense 853 628
Investment income (527) (147)
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Total costs and expenses 52,082 51,615
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Income before income taxes 3,239 3,017
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Provision for income taxes 535 502
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Net income $ 2,704 $ 2,515
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Earnings per share
Basic $ 0.10 $ 0.09
Diluted $ 0.09 $ 0.09
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Weighted average common shares outstanding
Basic 28,066,845 28,795,000
Diluted 28,612,122 28,945,000
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SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
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Fifty-Two Weeks Ended
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April 30, April 30,
2000 1999
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Revenues
Restaurants $ 230,869 $ 218,561
Franchise operations 8,625 7,765
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Total revenues 239,494 226,326
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Costs and Expenses
Cost of sales 84,599 80,695
Labor and related expenses 63,081 59,179
Other operating expenses 49,436 47,889
Depreciation and amortization 8,628 9,927
Non-recurring items 12,087
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General and administrative expenses 20,346 16,874
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Total operating costs 238,177 214,564
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Interest expense 3,631 3,284
Investment income (1,423) (724)
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Total costs and expenses 240,385 217,124
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Income (loss) before income taxes (891) 9,202
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Provision (benefit) for income taxes (3,313) 1,810
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Net income $ 2,422 $ 7,392
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Earnings per share
Basic $ 0.08 $ 0.26
Diluted $ 0.08 $ 0.26
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Weighted average common shares outstanding
Basic 28,559,050 28,815,000
Diluted 28,876,620 28,878,000
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SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
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April 30, April 30,
ASSETS 2000 1999
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Current Assets:
Cash and cash equivalents $ 38,789 $ 14,691
Receivables, net of reserves of $847 at
April 30, 2000 and $1,726 at April 30, 1999 4,173 3,546
Inventories 4,333 4,346
Prepaid expenses and other current assets 1,132 1,669
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Total current assets 48,427 24,252
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Property and equipment, net 46,316 77,836
Property held for sale 8,931 711
Long-term notes receivable, net of reserves of $72
at April 30, 2000 and $508 at April 30, 1999 1,224 1,553
Deferred income taxes 5,949 795
Intangible assets, net of accumulated amortization of
$889 at April 30, 2000 and $887 at April 30, 1999 1,876 2,104
Other assets, net of accumulated amortization and reserves
of $16 at April 30, 2000 and $6 at April 30, 1999 1,497 1,418
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Total assets $ 114,220 $ 108,669
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SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
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April 30, April 30,
LIABILITIES AND STOCKHOLDERS' INVESTMENT 2000 1999
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Current Liabilities:
Current portion of long-term debt $ 5,206 $ 5,898
Accounts payable 8,196 7,892
Other current liabilities 10,209 8,853
Income taxes payable 2,530 2,449
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Total current liabilities 26,141 25,092
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Long-term Liabilities:
Long-term debt, net of current portion 21,198 26,918
Deferred gain on sale and leaseback 8,269
Other liabilities 7,977 3,916
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Total long-term liabilities 37,444 30,834
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Stockholders' Investment:
Capital stock -
Preferred, authorized 1,000,000 shares, $5 par value;
no shares issued - -
Common, authorized 50,000,000 shares, $0.01 par value;
28,774,239 shares issued and 28,067,539 shares
outstanding at April 30, 2000 and 28,797,828 shares
issued and outstanding at April 30, 1999 288 288
Additional paid-in capital 278,408 278,365
Accumulated deficit (219,769) (222,191)
Treasury stock, 706,700 shares at cost at April 30, 2000
and none at April 30, 1999 (1,948)
Accumulated other comprehensive income (6,344) (3,719)
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Total stockholders' investment 50,635 52,743
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Total liabilities and stockholders' investment $ 114,220 $ 108,669
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