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Granite City Food & Brewery Ltd Reports Operating Results (10-Q)

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May 10, 2012
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Granite City Food & Brewery Ltd (GCFBD, Financial) filed Quarterly Report for the period ended 2012-03-27.

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Highlight of Business Operations:

The Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents. Amounts receivable from credit card processors are considered cash equivalents because they are both short-term and highly liquid in nature and are typically converted to cash within three days of the sales transaction.

The Company has cash outlays in advance of expense recognition for items such as rent, insurance, fees and service contracts. All amounts identified as prepaid expenses and other current assets are expected to be utilized during the twelve-month period after the balance sheet dates presented. Other current assets consist primarily of receivables of amounts due from third-party gift card sales, third-party delivery services and rebate amounts due from certain vendors.

We utilize a 52/53-week fiscal year ending the last Tuesday in December for financial reporting purposes. The first quarters of 2012 and 2011 included 403 and 338 operating weeks, respectively, which is the sum of the actual number of weeks each restaurant operated. Because we have opened new restaurants at various times throughout the years, we provide this statistical measure to enhance the comparison of revenue from period to period as changes occur in the number of units we are operating.

We generated $28,570,000 and $23,093,632 of revenue during the first quarters of 2012 and 2011, respectively. The 23.7% increase in the first quarter of 2012 revenue was primarily the result of the five Cadillac Ranch restaurants we acquired in November and December 2011. Comparable restaurant revenue, which includes restaurants in operation over 18 months, increased 1.9% from the first quarter of 2011 to the first quarter of 2012 due to an increase in guest traffic of 3.6%. The average weekly revenue per restaurant at our comparable restaurants increased $1,289 from $68,324 in the first quarter of 2011 to $69,613 in the first quarter of 2012.

General and administrative expense increased $715,088 to $2,528,694 in the first quarter of 2012 from $1,813,606 in the first quarter of 2011. As a percentage of revenue, general and administrative expenses increased 1.0% in the first quarter of 2012 over 2011. The primary sources of such increases were expenses related to employee compensation, travel and occupancy expense. These increases were due primarily to the addition of several key members of management in connection with our May 2011 transaction with CDP, as well as additional personnel and travel expense related to the addition of our five Cadillac Ranch restaurants. Aggregate non-cash stock-based compensation for employees and non-employee board members was $42,448 and $114,261 in the first quarters of 2012 and 2011, respectively.

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