Granite City raises $14M in private placement

MINNEAPOLIS Granite City Food & Brewery Ltd. said Monday it completed a $14 million private placement of its common stock to fund restaurant expansion, retire certain equipment lease debt and for general corporate purposes.

The company sold about 2.6 million shares for $5.35 per share to new and existing institutional investors, the company reported.

Granite City, which operates 18 casual-dining restaurants in the Midwest, said it plans to open seven new restaurants this year.

"Raising this capital allows us to embark on a quicker path to profitability," the company's president and chief executive, Steve Wagenheim, said in a statement. "By funding our capital expenditure budget for 2007 with equity instead of debt, we will increase our company level cash flow and retain more capital to meet our expansion plans."

KeyBanc Capital Markets acted as lead placement agent and Craig-Hallum Capital acted as co-placement agent for the offering.

For the company's latest fourth quarter, ended Dec. 26, Granite City recorded a net loss of $1.8 million, or 13 cents per share, compared to a net loss of $1.7 million, or 14 cents per share, for the year-earlier fourth quarter. Granite City booked nearly $500,000 in its latest quarter for stock-based compensation expense. Total revenues rose 68.3 percent to $17 million. Same-store sales increased 8.3 percent.