Nation's Restaurant News: Landry's cuts 3rd-Q net loss despite higher interest expense

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Landry's cuts 3rd-Q net loss despite higher interest expense

Sarah E. Lockyer

HOUSTON -- Landry's Restaurants Inc., based here, said this month that it was able to significantly reduce its third-quarter net loss to $4.3 million, from a $30 million loss in the year-ago quarter, despite increased expenses related to higher interest rates for debt and because of smaller losses from discontinued operations.

Landry's, which operates about 200 casual-dining restaurants and various other entertainment and gaming venues, said revenue for the quarter ended Sept. 30 rose 5.1 percent to $301.9 million. Same-store sales rose 1 percent.

This summer Landry's had battled with note holders of its $400 million debt about payment and interest rates. The holders had elected to call the notes due immediately. The dispute went to court, and the parties eventually settled, calling for a 2-percentage-point increase in the interest rate, to 9.5 percent. Landry's said that rate would increase annual interest expense by $8 million.

Landry's latest-quarter per-share loss totaled 25 cents, compared with a loss of $1.36 a year ago. Latest-quarter results included 22 cents in expenses from increasing interest rates and the unrelated refinancing of Landry's Golden Nugget hotel and casino chain. One-time costs of 46 cents per share related to the changed interest rate as well as 11 cents per share from the decrease in the fair market value of the debt agreement were included in the latest-quarter results.

Year-ago results included $1.63 per share in losses from discontinued operations that reflected restaurant closures, as well as a write-down and the eventual sale of Joe's Crab Shack.

Landry's continues to operate restaurants under the Landry's Seafood House, Chart House, Rainforest Cafe and Saltgrass Steak House brands. From continuing operations, the company posted a quarterly loss of $3.2 million, compared with a $6 million profit a year ago.