HOUSTON Landry’s Restaurants Inc. has reported flat same-store sales, declining gambling revenues and a 93-percent first-quarter dip in profits on sharply higher interest expenses. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Fertitta, who already owns 39 percent of Landry’s stock, last month had cited “significantly worsened” credit markets in lowering his previous $1.3 billion offer for the operator of 180 casual-dining restaurants and two Nevada casino-hotels. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Though the 23 percent of total revenues that Landry’s previously derived from casino gaming had appeared to cushion the company against ongoing traffic weakness for casual-dining restaurants, that advantage is dissipating. Landry’s this month projected cash flow from its gaming business would fall 5 percent to 8 percent for all of 2008. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
That mirrors new reports that Nevada’s gaming revenues overall have slipped this year, down 4.8 percent in March at properties on the Las Vegas Strip and 1.5 percent statewide for a rare third straight monthly decline. Blamed on the economy, the downturn marked Nevada’s first such sustained falloff since after September 2001. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Landry’s surge in interest expenses resulted from debt restructurings forced on the company last fall after note holders took the company to court over technical violations of covenants, though in March Landry’s reported it was in full compliance with revised credit requirements. However, the company now is indicating it will need to pay even higher interest rates for new long-term financing. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Fertitta, meanwhile, gave no new indications about the status of his proposal, nor that any prospective backers of his buyout had soured on the deal in light of Landry’s gaming-revenue slippage. His bankers at Jefferies & Co. had issued a letter in early April indicating they were “highly confident” they could arrange financing for his revised $21-per-share buyout offer, or $830 million in cash and the assumption of Landry’s nearly $450 million in debt. He previously offered $23.50 a share for the Houston-based owner of such restaurant chains as Landry’s Seafood House, Rainforest Cafe, Chart House, Saltgrass Steak House and the two Golden Nugget casino-hotels. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Landry’s board has hired Cowen & Co. to evaluate Fertitta’s offer and to shop the company to other potential buyers. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Landry’s net income for the three months ended March 31 was $1.5 million, or 10 cents a share, versus $22.1 million, or $1.04 a share, in the prior first quarter. Analysts had expected earnings of 36 cents per share for the latest quarter. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Revenue rose 3.9 percent to $294.8 million despite the flat same-store sales for the quarter. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Landry’s pretax interest expenses for the quarter were $20.8 million, versus $13.6 million a year earlier, because of a refinancing last June for its Golden Nugget properties and interest rate increases on senior notes that went into effect last August amid the bond holder demands. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
With Fertitta’s offer still pending, he did not participate in a first-quarter conference call this month, though Rick H. Liem, Landry’s executive vice president and chief financial officer, said the company was slowing expansion this year, primarily funding a hotel tower expansion in Las Vegas. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
“Sales in the first quarter were choppy, with periods of low and higher volumes,” Liem said. “January was slow across all of our concepts. February improved. March started off soft but gained momentum during the month due to Easter and spring break.” —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Regionally, Liem said, “Texas was in positive territory for the quarter, while our Florida and California markets were the softest.” —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
“We are concerned with the overall economic condition in the country,” he said, “and we believe the remainder of 2008 will be challenging for us as well as for the industry. However, we’ve experienced slow economies in the past, and we are tightening our belts and focusing on our labor and cost controls while still maintaining an emphasis on customer service.” —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Golden Nugget revenue decreased 1 percent in the first quarter to $69.8 million, from $70.7 million in the same period last year. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
“We are looking at a softer summer,” Liem said, both in room rates and occupancy, as Las Vegas feels the effects of the economic downturn. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
The $160 million expansion of the Golden Nugget in Las Vegas is going forward, Liem said, to add 450 rooms even amid the local recession in gaming revenues. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
“The tower is an 18-month to two-year project,” he said. “It’s the business plan to put it up and get it ready to go in late ‘09 or early 2010. We had to stick with that plan.… Once you start it, you pretty well need to finish it.” —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Liem said the financing was in place to build Golden Nugget’s Las Vegas tower addition, though “there are certainly some opportunities to do value engineering, and we will execute those the best we can.” —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
He said Landry’s restaurant expansions this year will focus on the T-Rex theme-eatery development that’s expected to be completed in the fall at Walt Disney World in Orlando, Fla. That restaurant is a branch of the first T-Rex unit in Kansas City, Kan. Landry’s opened a Yak & Yeti themer at Disney World last fall, and in the first quarter, the company converted a site at the Kemah Boardwalk complex in Kemah, Texas, to a restaurant called Red Sushi. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
The company ended the first quarter with 180 restaurants, including 46 Landry’s, 44 Salt Grass steakhouses, 12 Charley’s Crabs, 26 Chart Houses, 30 Rainforest Cafes, 10 Crab Houses, three Joe’s Crab Shacks and seven higher-scale restaurants, including Vic & Anthony’s in Houston. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
Landry’s was among seven restaurant chains that Moody’s Investors Service recently downgraded to its lowest liquidity rating. —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,
“The credit markets remain unsettled, in particular for casual-dining and other consumer discretionary sectors,” Liem said. “Nevertheless, we continue to believe we will obtain long-term financing, although likely at a higher interest rate and with more restrictive terms than our existing agreements.” —Further raising doubts about chairman and chief executive Tilman Fertitta’s ability to pull off a going-private buyout,