forward looking statements
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Forward Looking Statements. - PowerPoint PPT PresentationTRANSCRIPT
Forward Looking Statements
These forward-looking statements are based on information available to us on the date of this release and we assume no obligation to update these forward-looking statements for any reason. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the following: factors that could affect our ability to achieve and manage our planned expansion, such as the availability of qualified employees and the availability of a sufficient number of suitable new restaurant sites; changes in the availability and costs of food; potential fluctuation in our quarterly operating results due to seasonality and other factors; the continued service of key management personnel; our ability to protect our name and logo and other proprietary information; changes in consumer preferences, general economic conditions or consumer discretionary spending; health concerns about our food products; the impact of federal, state or local government regulations relating to our employees and the sale of food or alcoholic beverages; the impact of litigation; the potential effects of inclement weather or terrorist attacks; the effect of competition in the restaurant industry; cost and availability of capital; and other risk factors described from time to time in SEC reports filed by McCormick & Schmick’s Seafood Restaurants, Inc.
McCormick & Schmick’s Today
Leading national seafood restaurant operator in the affordable upscale dining segment
Nationally recognized brand, known for impeccable food, service and value
Focused on fresh seafood
Over three decades of success as a restaurant operator
Based in Portland, Oregon
McCormick & Schmick’s, Orlando, FL - 2007
Our Expertise in Fresh Seafood Sets Us Apart
Knowledge and expertise in fresh seafood developed over our 35 year history
Jumbo Prawn Cocktail
Grilled Halibut
Our Daily Printed Menu Has Broad Guest Appeal
Features 85 to 100 made-to-order dishes; includes our signature “Fresh List” of 30 to 40 seafood items
Flexibility to adapt to local tastes and preferences
Consistent Cost Structure
($ in millions)
Food and Beverage Costs / % of Revenues
Restaurant Labor Costs / % of Revenues
$36.9$48.1 $51.6 $53.2 $58.0
$89.4
$70.9
$81.6
29.0%29.7% 29.3%30.0% 30.2% 29.7% 29.5% 29.5%
1999 2000 2001 2002 2003 2004 2005 2006
$37.4$49.3 $54.5 $56.1 $61.6
$75.1$86.8
$95.9
31.1%31.4% 31.1%30.3% 30.9% 31.4% 31.2% 31.3%
1999 2000 2001 2002 2003 2004 2005 2006
Our Full-Service Bar is Central to Our Appeal
An exciting, lively destination
McCormick & Schmick’s Oak Street, Portland, OR – 1979
McCormick & Schmick’s, Denver, CO – 2004
Attracts a wide variety of guests who develop into regular restaurant customers
21%
30%
14%
35%
51%
49%
25%
46%
20%
9%
We Attract a Diverse Customer Base
% Total Population (a)Age Distribution
Under 24
24-34
55+
35-54
(a) Per 2002 U.S. Census estimates.
Male
Female
Gender Mix
Making Us the Restaurant of Choice for All Occasions
Lunch25%
Dinner75%
Local Business
25%
Business Travelers
12%
Social Travelers
17%
Local Social
46%
Day part ($ Sales) Type of Guest
Key Driver of Visit
Delivering a Strong Value Proposition
$18 $20 $26
$39 $48
$56 $67
$72 $75
$88
$0
$20
$40
$60
$80
$100 C
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ake
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Average Guest Check
Source: Restaurant Benchmark Book, September 2007 – Piper Jaffray
Recognized by Consumer Nationally recognized by the leading American consumer
magazine Top ranked seafood restaurant
One of the highest rankings overall
Our Restaurant Base Today
72 restaurants in 24 states
and the District of Columbia
and 6 restaurants in B.C.
Canada
(MC)
2
14
1
4
(MC)
Existing Locations
Management Contract Locations
3
2
1
2
2
5
2
2
1
1
12
7
1
6
4
12
2
2
44
Significant Growth Opportunities
Seafood consumption continues to grow in the U.S. market and worldwide
Crab, Mango & Avocado Salad
Grilled King Salmon
Significant Growth Opportunities Attractive tenant for real estate developers -
Concept Flexible real estate model In-line with retailers, free-standing, and
office buildings Lunch / happy hour seen as amenities by
prospective landlords
McCormick & Schmick’s, Charlotte, NC – 2005
McCormick & Schmick’s, Indianapolis, IN - 2005
Attractive tenant for real estate developers – Finance
Little bank debt / transparency Strong balance sheet and access to
growth capital
Significant Growth Opportunities
(MC)
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1. Jake’s Famous Crawfish
2. M&S Portland 3. McCormick’s Fish
House Beaverton 4. Jake’s Grill 5. M&S Harborside 6. The Heathman 7. M&S Grill Tigard
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1. M&S Irvine 2. M&S Los Angeles 3. M&S Beverly Hills 4. M&S Pasadena 5. M&S San Diego 6. M&S El Segundo 7. M&S Burbank 8. M&S Santa Ana
1. M&S Washington, D.C. K Street
2. M&S Reston 3. M&S Baltimore 4. M&S Grill Washington,
D.C. 5. M&S Bethesda 6. M&S McLean 7. M&S Grill Inner Harbor 8. M&S Washington, D.C.
F Street 9. M&S Grill Reston10. M&S Crystal City11. Restaurant K
Portland, OR
Southern California
Washington, D.C.
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Potential for 250 plus restaurants
Concept clustering has proven successful
Portland, OR, Southern California, Washington D.C.
Significant opportunities in markets where the concept has a proven track record
– New York, NY, Chicago, IL, Houston, TX, Atlanta, GA, Florida, California
(MC)
Existing Locations
Management Contract Locations
(MC)
3
2
14
1
4
5
12
1
2
4
2
2
12
4
21
2
21
27
41
Growth Model
LONG-TERM NET INCOME GROWTH
20%+
13% – 15% New Unit Growth
2% – 3% Comparable Restaurant Sales Growth
Modest G&A Leverage
Restaurant Level Margin Expansion
Proven Growth Model
Unit Growth (a)
We have a long history of consistent unit growth
(a) For 2006 and prior, includes two units operated under management fee arrangements and for 2007, represents one unit operated under a management fee arrangement.
26 32 35 39 4252
5966
1999 2000 2001 2002 2003 2004 2005 2006 2007P
821999 – 2007 CAGR 15%
Proven Growth Model
Historical Same Store Sales Growth
We have a long history of consistent same store sales growth
Achieved positive same store sales growth for 16 consecutive quarters
2003 Annual = 1.1% 2004 Annual = 3.8% 2005(a) Annual = 3.0% 2006(a) Annual = 3.0%
(a) Comparable sales are based on 52 operating weeks – Excludes the 53rd operating week from 2005
Year to Date Second Quarter 2007 Financial Highlights
(in millions, except per share data)
Year to Date Ended
07/01/06 06/30/07 Variance26 weeks 26 weeks $ %
Revenues $148.4 100.0% $171.1 100.0% $22.7 15.3%
Total Restaurant Operating Costs 125.1 84.3% 143.8 84.0% 18.7 15.0%
General and Administrative Expense 8.0 5.4% 9.8 5.7% 1.8 22.7%
Operating Income 8.5 5.7% 11.0 6.4% 2.5 29.3%
Net Income 5.8 3.9% 7.8 4.5% 1.9 32.7%
Comparable Restaurant Sales 3.4% 2.5% NM
Diluted Earnings Per Share ("EPS") $0.40 $0.53 $0.12 30.6%
Shares Used in Computing EPS 14.508 14.744 0.236 1.6%
Note: NM – Not Meaningful
Revenue Building Initiatives
Advertising programs targeting business travelers
USA today Business Journal
Continue to enhance our wine by the glass program
New carafe service Offering two different pours: five and eight ounce pours
Continue to enhance the menu
Heart healthy menu choices Steak program Value proposition
Focus on banquet business for the fourth quarter
Drive revenues through alternative point of distribution
Costco Grocery stores
Revenue Building Initiatives
Advertising programs targeting business travelers
USA today
Revenue Building Initiatives
Advertising programs targeting business travelers
Business Journal
Revenue Building Initiatives
Continue to enhance our wine by the glass program
New carafe service Offering two different pours: five and eight ounce
pours
Revenue Building Initiatives
Continue to enhance the menu
Heart healthy menu choices Steak program
Steak and ShellfishAll Our Steaks are 21 Day Aged, Choice/Prime Midwest Corn Fed Beef
Sliced Sirloin Steak, With Chipotle BarbeQue, and Frizzled Onions 21.95 6 oz Petit Filet with Maitre De Butter 28.95 9 oz Filet Mignon with Maitre De Butter37.9520 oz T-Bonewith Maitre De Butter 39.9014 ounce New York Strip Steak with Maitre De Butter 32.959 ounce Top Sirloin Steakwith Maitre De Butter 21.806 oz Top Sirloin and Crab Stuffed Shrimp 26.956 oz Filet Mignon and King Crab Legs 39.50San Francisco Style Shellfish Stew 25.95Mixed Steamer Dinner—Clams and Mussels 19.90Pan Bronzed Ribeye SteakWith Kentucky Bourbon-Mushroom Sauce 24.95Filet Mignonettes Florentine, Blue Cheese or Horseradish CrustedWe will post all three recipes—your choice to use 28.50Parmesan Crusted Sirloin Steak PicattaWith Lemon-Caper Demi Glace 22.75Whole Maine Lobster Market price
Revenue Building Initiatives
Continue to enhance the menu
Value proposition
Revenue Building Initiatives
Focus on banquet business for the fourth quarter
Revenue Building Initiatives
Drive revenues through alternative point of distribution
Costco
New Cookbook & Gift Cards
Grocery stores
Kroger (853)
Safeway (709)
Albertsons (485)
Giant Eagle (95)
Haggens (13)
Winco (8)
In Summary
Leading National Upscale Seafood Restaurant
Flexible Operating Model
Full-Service Bar
Strong New Unit Economics
Successful Track Record of Performance
Significant Growth Opportunities
Broad Guest Appeal