HOUSTON Landry's Restaurants Inc. reported last week that it would take a non-cash charge of about $8.6 million to correct past stock option accounting errors.
The company also said it could not file its fiscal year 2006 financial results until it completed a second review of past stock option practices, although it did forecast a net loss for the year mainly because of the sale of its Joe's Crab Shack concept in the fourth quarter. The net loss for those discontinued operations totaled $41.1 million for the nine months ended Sept. 30, according to past company filings.
Landry's currently operates about 200 restaurants under the Landry's Seafood House, Chart House, Rainforest Cafe, Saltgrass Steak House and other brands, as well as hotels, marinas, retail sites and the Golden Nugget Hotels and Casinos. It also is bidding for the Smith & Wollensky upscale steakhouse chain.
As previously reported, fiscal 2006 revenues from continuing operations increased 26.4 percent to $1.1 billion, aided mostly by the late 2005 acquisition of the Golden Nugget Hotels and Casinos.
The company's board of directors said a second review of stock option practices, currently underway and led by independent directors serving on the audit committee, is expected to be completed by the second quarter of the current fiscal year.
Landry's said its internal voluntary review of option granting practices did not find "any intentional backdating of options or fraudulent retroactive documentation regarding options." Last month, the company forecast that total charges stemming from the review would total as much as $8 million.