Los Angeles - Koo Koo Roo, Inc., reported that based on preliminary unaudited results, the Company achieved breakeven cash flow based on earnings before interest, tax, depreciation and amortization ("EBITDA") for the fourth quarter of 1997 on revenues of approximately $21.9 million, compared to a cash flow loss of ($2.6) million on revenues of $12.1 million during the fourth quarter of 1996.
Ken Berg, the Company's Chairman, stated, "Stabilizing our cash position on an operating basis has been an important objective for the Company. The turnaround on an EBITDA basis from 1996 is quite dramatic and we achieved this result as a consequence of higher same store sales volume, improved store economics and steps taken during the latter part of the year, which included reductions in corporate overhead and the implementation of our market concentration strategy which focuses future growth in California, Las Vegas and Florida."
"We reduced corporate overhead to approximately 11% of revenues in the fourth quarter of 1997, as compared to 24% for the same period in 1996. We will continue to focus on further reductions in corporate overhead.
After giving effect to interest, depreciation, amortization, and deemed dividends on preferred stock, the Company will report a significant net loss for the year ended December 31, 1997, including the fourth quarter of 1997.
Additionally, the Company is in the process of finalizing the previously announced transaction regarding Color Me Mine. The Company entered into a letter of intent which contemplates the combination of Color Me Mine with a management group that desires to expand the business and integrate it with other innovative hobby and crafts concepts. This transaction is subject to the completion of definitive documentation, which is underway and expected to be signed at the end of this month.
Koo Koo Roo operates 51 restaurants in California, Las Vegas, Florida and the Washington D.C. beltway area, including the Hamburger Hamlet restaurants. Its Canadian partnership also operates three Koo Koo Roo California Kitchens in Toronto. The Arrosto Coffee Company subsidiary operates one stand alone Arrosto Coffee store and a coffee bean microroastery which supplies coffee to all the Company's restaurants and to outside customers.
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