Rock Bottom cuts support staff, delays refinancing

LOUISVILLE Colo. Rock Bottom Restaurants Inc. said it laid off 19 percent of its support staff last week and is postponing a recapitalization because of prevailing economic conditions.

Last year the casual-dining company hired the investment banking firm Piper Jaffray & Co. to explore a possible exit strategy for founder Frank Day and other investors. The decision was based on Rock Bottom’s financial health and plans for future growth, officials said at the time. Day led a management buyout in 1999 that took Rock Bottom private.

ARock Bottom spokeswoman said current economic conditions have put plans for an initial public offering or a private-equity investment on hold. The chain also has terminated 36 staff positions in the corporate office here and in the field.

Despite sales that continue to outperform industry averages, Rock Bottom was forced to make the cuts, said Ned Lidvall, chief executive and president. The company cited such factors as a slowing economy, minimum wage increases, rising energy costs, higher supply costs and diminished customer spending.

Rock Bottom, which operates or franchises 102 restaurants, including its namesake Rock Bottom Restaurants & Brewery and its 30-year-old concept, Old Chicago, generated $290 million in corporate food and beverage revenue in its 2006 fiscal year.