WOODLAND HILLS Calif. The parent of the Daily Grill casual-dining chain said it has hired a financial adviser to explore a sale, merger or other strategic alternatives. Grill Concepts Inc. also indicated that the company’s top executives have agreed to accept equity in lieu of cash compensation as part of a companywide cost-saving measure.
According to filings with the U.S. Securities and Exchange Commission, Grill Concepts’ board of directors has retained Morgan Joseph & Co. to evaluate such possibilities as raising additional equity or debt capital, the sale of certain assets, a recapitalization or a merger.
At the same time, each officer at or above the level of vice president has agreed to accept 10 percent of their salary in the form of equity instead of cash. The company’s directors have agreed to accept all of their compensation in the form of equity.
The change in compensation will reportedly impact about a dozen executives with salaries that range between $100,000 and $350,000. The cuts will remain in effect indefinitely. The restricted stock will be issued at the end of each pay period based on the average closing price at the time.
For its second quarter ended June 29, Grill Concepts reported a net loss of $993,000, or 11 cents per share, compared with a loss of $39,000, or 1 cent per diluted share, for the prior-year period. Comparable sales for the first half of the year were down 5 percent. As of late October, the company’s stock has lost about 77 percent in value for the year.
“This is a difficult time in our nation’s history and all of us have to make sacrifices,” said Philip Gay, Grill Concepts’ president and chief executive. “Our family of employees is of utmost value to all of us and we want to make sure that we do everything in our power to ride out these uncertain times without having to take drastic measures.”
Grill Concepts operates 32 restaurants, including 25 Daily Grill units, six The Grill on the Alley upscale restaurants, and one In Short Order fast-casual unit.
