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Kona Grill Inc. Reports Operating Results (10-Q)

November 06, 2012 | About:
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10qk

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Kona Grill Inc. (KONA) filed Quarterly Report for the period ended 2012-09-30.

Kona Grill, Inc. has a market cap of $78.4 million; its shares were traded at around $8.95 with a P/E ratio of 16.4 and P/S ratio of 0.8.

Highlight of Business Operations:

Labor. Labor costs for our restaurants increased $0.2 million, or 2.9% to $8.0 million during the third quarter of 2012 compared to $7.8 million in the prior year quarter. Labor expenses as a percentage of restaurant sales increased 0.9% to 33.7% during the third quarter of 2012 from 32.8% during the prior year period as a result of deleveraging of hourly labor costs due to softer than anticipated sales volumes.

Occupancy. Occupancy expenses decreased $0.2 million, or 9.9% to $1.6 million during the third quarter of 2012 from $1.7 million during the same quarter in 2011. The lower occupancy expenses are primarily associated with an amendment in our lease agreement for one restaurant that was entered into during the fourth quarter of 2011. Occupancy expenses as a percentage of restaurant sales decreased 0.7% to 6.6% in the third quarter of 2012 compared to 7.3% during the prior year period. The decrease in occupancy costs as a percentage of sales reflects the impact of the aforementioned changes in lease provisions.

Restaurant Sales. Restaurant sales increased $2.4 million, or 3.5% to $73.0 million during the first nine months of 2012 from $70.6 million in the same prior year period. The sales increase is attributable to a 3.6% increase in comparable restaurant sales, driven by higher guest traffic volume of 3.5%.

Occupancy. Occupancy expenses decreased $0.5 million, or 9.3% to $4.6 million in 2012 year to date from $5.1 million during the first nine months of 2011. The lower occupancy expenses are primarily associated with an amendment in our lease agreement for one restaurant. Occupancy expenses as a percentage of restaurant sales decreased 0.9% to 6.4% in 2012 compared to 7.3% in prior year, reflecting the benefits of the aforementioned changes in lease provisions as well as the increased leverage of the fixed portion of these costs from higher average weekly sales.

Restaurant Operating Expenses. Restaurant operating expenses decreased $0.3 million to $10.2 million during the first nine months of 2012 on higher sales volume compared to $10.5 million in the same period in 2011. Lower marketing, credit card fees and utilities more than offset higher repair and maintenance costs and increased training, travel and recruiting expenses. Restaurant operating expenses as a percentage of restaurant sales also decreased 0.9% to 14.0% during the first nine months of 2012 compared to 14.9% for the same period in 2011.

Read the The complete Report

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