Champps Loses $500,000

For the year, the company lost $200,000. "While our results for the year did not meet our expectations, our revenue grew 6% and we generated operating cash flow of almost $20 million," CEO Michael O'Donnell said during the company's conference call with financial analysts.

O'Donnell outlined the steps that Champps is taking to improve results. Fiscal year 2005 revenues grew 5.6% to $218.4 million, compared with revenues of $206.9 million for fiscal 2004. Those steps that Champps has taken, O'Donnell explained during the company's conference call with financial analysts, include reducing the number of field supervisors in the organization. O'Donnell said that the company is working on "strategic initiatives I outlined in May" that could boost its performance.

Total revenues for the fourth quarter increased 2.5% to $53.7 million versus $52.4 million for the fourth quarter of the prior year. The revenue increase was primarily due to additional restaurants open this period compared with the fourth quarter of 2004, partially offset by a decline in comparable store sales.

O'Donnell revealed that "work had also begun on another important strategic initiative," which is a new real estate growth strategy involving the development of a new smaller prototype restaurant. The new prototype store under development is approximately 6,500 sf to 7,500 sf.

Littleton, CO-based Champps Entertainment Inc. owns and operates 53 and franchises 12 Champps restaurants in 23 states. Champps competes in the upscale-casual dining segment.

The company blamed the quarterly loss on higher general and administrative expenses and other operating costs. Along with the loss, same-store sales decreased 5% for the fourth quarter of fiscal compared with the fourth quarter of last year.

The company has already opened one restaurant in the first fiscal quarter of 2006 in Toledo, OH and plans to open up to two to four total restaurants in 2006. Specific plans include opening an additional restaurant in September or October through a licensing arrangement in the new international terminal in the Dallas/Fort Worth Texas airport, and a location in Princeton, NJ in the second half of 2006.