Landry's Restaurants, Inc. ('LNY'/NYSE) Reports Third Quarter 2009 Results

Landry's Restaurants, Inc. (NYSE: LNY; the "Company"), today announced its results for the third quarter ended September 30, 2009.

Revenues from continuing operations for the three months ended September 30, 2009, totaled $276.6 million, as compared to $289.7 million a year earlier. Revenues from the restaurant and hospitality group were $224.2 million and $229.1 million for the third quarter of 2009 and 2008, respectively and $52.4 million and $60.6 million for the same periods from the Golden Nugget properties.

Interest expense for the third quarter of 2009 was $29.3 million compared to $19.5 million in the third quarter of 2008 primarily due to higher interest rates resulting from the Company's refinancing in 2009 and higher borrowings associated with construction of the new tower at the Golden Nugget.

Income from continuing operations for the quarter was $8.9 million, compared to a loss of $7.6 million reported last year. On a pre-tax basis, results for the third quarter of 2009 include a $19.4 million gain on debt extinguishment, while the comparable period in the prior year included an $18.5 million impairment loss primarily from Hurricane Ike. In addition, the 2009 third quarter includes a $6.2 million non-cash pre-tax loss on the value of interest rate swaps not designated as hedges as compared to a loss of $1.8 million during the same period in 2008. Earnings per share-diluted from continuing operations for the quarter were $0.55, compared to a loss of $0.47 last year. Excluding the effect of the above items, earnings per share-diluted from continuing operations for the quarter would have been $.02 for 2009, as compared to $0.35 for 2008. Same store sales for the Company's restaurants were negative 6.5% while gaming operations were negative 13.1% for the quarter.

Excluding the non-recurring items described above, Adjusted EBITDA, as defined below, for the quarter was $49.4 million as compared to $48.8 million in the same period in the prior year. Restaurant and hospitality contributed $42.0 million compared to $36.5 million in the prior year while gaming operations contributed $7.3 million in the third quarter of 2009 versus $12.4 million in the third quarter of 2008.

Revenues from continuing operations for the nine months ended September 30, 2009, totaled $814.9 million, as compared to $890.2 million a year earlier. For the same periods, restaurant and hospitality revenues were $650.0 million and $693.2 million, respectively, while gaming operations revenues totaled $164.9 million and $196.9 million, respectively. Net earnings from continuing operations for the nine months were $24.3 million, compared to $8.9 million reported last year. Earnings per share-diluted from continuing operations for the nine months were $1.50, compared to $0.55 in 2008.

Rick Liem, Executive Vice President and CFO stated, "Operating income from the restaurant and hospitality group held up well in a very difficult economic environment. Results from the gaming operations reflect lower traffic compounded by heightened competitive pressure, particularly on room rates. We expect to open the new tower at the Golden Nugget at the end of November 2009, slightly in advance of the approximately 6,000 rooms opening in December at City Center."

As a result of the Company's 2006 sale of the Joe's Crab Shack concept and closure of certain additional locations, the results of operations for these restaurants are reflected as discontinued operations in the Company's financial statements. The loss from discontinued operations, net of taxes, for the quarter ended September 30, 2009 was $0.1 million or $0.01 per share-diluted compared to a loss of $9.5 million or $0.59 per share-diluted in the prior year. For the nine months ended September 30, 2009, the loss from discontinued operations, net of tax was $0.2 million or $0.01 per share-diluted as compared to a loss of $10.5 million or $0.65 per share-diluted in the prior year. Therefore, the consolidated net income for the current year quarter was $8.8 million or $0.54 per share-diluted, compared to net loss of $17.1 million or $1.06 per share - diluted in the comparable period in 2008. Consolidated, net income for the nine months ended September 30, 2009 was $1.49 per share-diluted compared to a net loss of $0.10 per share-diluted for the comparable period in the prior year.

Net income available to the Company's common stockholders for the three and nine months ended September 30, 2009 was $6.7 million and $19.3 million or $0.41 and $1.19 per share diluted, respectively as compared to a $17.1 million loss and $1.7 million loss or ($1.06) and ($0.10) per share diluted for the prior year.

The Company has determined that it did not properly consider the accreted value of its redeemable non-controlling interests in its T-Rex subsidiary in its determination of net income available to Landry's common stockholders in the first and second quarter of 2009. The Company will amend its quarterly filings on Form 10-Q. Such amendment will have no effect on the Company's cash flows or financial position. The amended filings will reflect the following.

                      Three Months Ended         Three Months Ended

                         March 31, 2009            June 30, 2009

                         --------------            -------------

                    As reported As restated  As reported As restated

                    ----------- -----------  ----------- -----------

  Net income

   (loss)

   attributable

   to Landry's        7,073,246   7,073,246    8,265,312   8,265,312

  Redeemable

   noncontrolling

   interest                   -  (1,064,763)           -  (1,660,878)

                            ---  ----------          ---  ----------

  Net income

   available to

   Landry's common

   stockholders      $7,073,246  $6,008,483   $8,265,312  $6,604,434

                     ==========  ==========   ==========  ==========



  EARNINGS (LOSS)

   PER SHARE

   INFORMATION:

  Amounts

   attributable to

   Landry's:



  BASIC

    Net income

     (loss)

     attributable

     to Landry's          $0.44       $0.44        $0.51       $0.51

    Redeemable

     noncontrolling

     interest                $-      $(0.07)          $-      $(0.10)

                            ---      ------          ---      ------

    Net income

     available to

     Landry's

     common

     stockholders         $0.44       $0.37        $0.51       $0.41

                          =====       =====        =====       =====

    Weighted

     average

     number of

     common

     shares

     outstanding     16,140,000  16,140,000   16,140,000  16,140,000



  DILUTED

    Net income

     (loss)

     attributable

     to Landry's          $0.44       $0.44        $0.50       $0.50

    Redeemable

     noncontrolling

     interest                $-      $(0.07)          $-      $(0.09)

                            ---      ------          ---      ------

    Net income

     available to

     Landry's

     common

     stockholders         $0.44       $0.37        $0.50       $0.41

                          =====       =====        =====       =====

    Weighted

     average

     number of

     common and

     common

     share

     equivalents

     outstanding     16,155,000  16,155,000   16,205,000  16,205,000





                       Six Months Ended

                        June 30, 2009

                        -------------

                    As reported As restated

                    ----------- -----------

  Net income

   (loss)

   attributable

   to Landry's       15,338,558  15,338,558

  Redeemable

   noncontrolling

   interest                   -  (2,725,641)

                            ---  ----------

  Net income

   available to

   Landry's common

   stockholders     $15,338,558 $12,612,917

                    =========== ===========



  EARNINGS (LOSS)

   PER SHARE

   INFORMATION:

  Amounts

   attributable to

   Landry's:



  BASIC

    Net income

     (loss)

     attributable

     to Landry's          $0.95       $0.95

    Redeemable

     noncontrolling

     interest                $-      $(0.17)

                            ---      ------

    Net income

     available to

     Landry's

     common

     stockholders         $0.95       $0.78

                          =====       =====

    Weighted

     average

     number of

     common

     shares

     outstanding     16,140,000  16,140,000



  DILUTED

    Net income

     (loss)

     attributable

     to Landry's          $0.95       $0.95

    Redeemable

     noncontrolling

     interest                $-      $(0.17)

                            ---      ------

    Net income

     available to

     Landry's

     common

     stockholders         $0.95       $0.78

                          =====       =====

    Weighted

     average

     number of

     common and

     common

     share

     equivalents

     outstanding     16,180,000  16,180,000

On November 3, 2009, the Company announced it had entered into a definitive merger agreement with Mr. Tilman J. Fertitta's acquisition company, a company wholly-owned by Tilman J. Fertitta, Chairman, Chief Executive Officer and President of Landry's. Mr. Fertitta's acquisition company would acquire all of Landry's outstanding common stock not already owned by Mr. Fertitta for $14.75 per share in cash, a 37% premium over the closing share price of Landry's common stock on the last trading day before the announcement of the transaction. The total value of the transaction is approximately $1.2 billion. On November 2, 2009, Mr. Fertitta beneficially owned approximately 55.1% of Landry's outstanding shares of common stock. As previously announced, in August 2009, the Board of Directors formed a Special Committee comprised entirely of outside, non-employee directors to review strategic alternatives. The Special Committee retained legal advisors and engaged Moelis & Company as its financial advisor. At that time, Mr. Fertitta had proposed to the Special Committee a going private transaction which would have resulted in Landry's stockholders receiving shares of Landry's Saltgrass, Inc. subsidiary in exchange for their Landry's shares. After reviewing the proposal, the Special Committee rejected Mr. Fertitta's proposal as inadequate. Mr. Fertitta then proposed an all-cash transaction, which led to the negotiation and execution of the merger agreement.

The proposed merger transaction is subject to approval by Landry's stockholders, including approval by the holders of a majority of Landry's common stock not owned by Mr. Fertitta. The transaction is also subject to Landry's refinancing a portion of its outstanding debt.

The transaction is expected to be completed in the first half of 2010, subject to regulatory approvals and other customary closing conditions.

The Company's continuing operations include restaurants primarily under the trade names Landry's Seafood House, Chart House, Rainforest Cafe, Saltgrass Steak House and the Signature Group as well as other businesses including hotels, marinas, amusements, retail and the Golden Nugget Hotels and Casinos in Las Vegas and Laughlin, Nevada.

Logos, product and company names mentioned are the property of their respective owners.

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