Landry's Restaurants, Inc. ('LNY'/NYSE) Reports Second Quarter 2010 Results

Revenues from the restaurant and hospitality group were $236.9 million for the second quarter of 2010 and $225.5 million for the comparable period in 2009, gaming revenues from the Golden Nugget properties were $57.7 million in 2010 versus $56.5 million in 2009 for the same periods. Net earnings (loss) for the quarter was ($14.1) million, compared to $6.6 million reported last year.  Results for the 2010 second quarter include a litigation settlement charge, transaction merger costs and impairment expense, while the corresponding period in 2009 included a gain on insurance proceeds and asset sales.  In addition, the 2010 second quarter includes a non-cash loss on the value of interest rate swaps not designated as hedges as compared to a gain during the same period in 2009.

Same store sales for the Company's restaurants were flat for the quarter.  Net earnings (loss) per share for the quarter was ($0.87), compared to $0.41 -diluted reported last year. Excluding the discrete items noted above, earnings per share would have been ($0.01) for 2010 as compared to $0.20 for the same period in 2009.

Interest expense for the second quarter of 2010 was $29.5 million compared to $28.5 million in the second quarter of 2009 primarily due to higher borrowings associated with construction of the new Rush Tower at the Golden Nugget.

Adjusted EBITDA, as described below, excluding the discrete items noted above for the second quarter of 2010 was $52.9 million comprised of $41.9 million for the restaurant and hospitality group and $11.0 million from gaming operations compared to $52.7 million in the comparable prior year period with $40.5 million from the restaurant and hospitality group and $12.2 million from gaming operations.  

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 and six months ended June 30, 2010 and 2009 were not material.  

Rick Liem, Executive Vice President and CFO stated, "We are pleased with the performance of our restaurant and hospitality operations where we experienced sequentially improving same store sales despite the impact of the Gulf oil spill on our three locations in the affected area.  The gaming industry continues to struggle with excess capacity eroding pricing power and reduced consumer spending.  Fortunately, the additional rooms at the new Rush Tower have allowed us to mitigate the rate impact on overall revenue."  

For the six months ended June 30, 2010, restaurant and hospitality revenues were $436.1 million compared to $425.8 million for the prior comparable period, and 2010 adjusted EBITDA, excluding the effect of transaction and settlement costs, impairments, asset sales, insurance gains, and interest rate swaps, was $71.6 million compared to $73.6 million in 2009.

Gaming revenues for the six months ended June 30, 2010 were $117.2 million compared to $112.5 million for the same period in 2009.  Gaming adjusted EBITDA for the first half of 2010 increased slightly to $24.9 million from $24.7 million in the comparable period in 2009.

Consolidated revenues from continuing operations for the six months ended June 30, 2010, totaled $553.3 million, as compared to $538.3 million for the same period a year earlier.  Net earnings for the six months ended June 30, 2010 were $0.2 million, compared to $12.6 million as reported in the same period last year.  Earnings per share-diluted for the six months were $0.01, compared to $0.78 in the same period in the prior year.  

The Company's continuing operations include restaurants primarily under the trade names Landry's Seafood House, Chart House, Rainforest Cafe, Saltgrass Steak House, The Oceanaire Seafood Room, 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.


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