Ignite Restaurant Group widens loss in 4Q

Ignite Restaurant Group, parent to the Joe’s Crab Shack and Brick House Tavern + Tap casual-dining brands, reported widened losses on Wednesday despite a slight increase in same-store sales.

For the fourth quarter ended Dec. 31, Houston-based Ignite reported a loss in net income of $7.6 million, or 30 cents per share, compared with a loss of $1 million, or five cents per share, in the same period a year ago.

Revenue rose 11.1 percent, to $112.6 million, compared with $101.4 million in the prior-year quarter.

Same-store sales increased 0.8 percent in the quarter, excluding a 0.1-percent negative impact due to Hurricane Sandy. The company said that was the 18th consecutive quarter of positive same-store sales growth.

Ignite said it incurred about $6.1 million in charges related primarily to debt refinancing in the fourth quarter, as well as costs linked to a restatement of prior earnings, a restaurant closure and losses associated with Hurricane Sandy damage.

Ignite, which went public last July, opened one new Joe’s unit in the fourth quarter in Hunt Valley, Md., and a total of 11 new restaurants for the entire year.

“We have a strong development pipeline and we continue to be pleased with the performance of our new units,” said Ray Blanchette, Ignite’s chief executive, in a statement.

“Furthermore,” Blanchette said, “our pending acquisition of Macaroni Grill will transform Ignite into a company with almost $1 billion in revenue with the opportunity to elevate the business, achieve meaningful synergies and drive significant growth over time.”

On Feb. 6 Ignite agreed to acquire the 210-unit Romano’s Macaroni Grill casual-dining chain from the Golden Gate Capital private-equity firm for about $55 million. The deal, which will be funded through a $50 million increase in Ignite’s credit facility, is expected to close in April.

Macaroni Grill owns 186 units and franchises five others in 36 states. In addition, it franchised another 19 units outside the United States.

At the end of the fourth quarter, Ignite operated 129 Joe’s Crab Shack restaurants and 15 Brick House units.

Contact Ron Ruggless at [email protected].
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