Morton's Restaurant Group, Inc. Company Analysis


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  • Additionally, during fiscal 2008, the Company opened a new Morton’s steakhouse in Sacramento, CA and closed a previously existing one in Sacramento Morton’s retrofitted seven Morton’s steakhouses with the Bar 12  21 dining concept in 2008, bringing the total number of Morton’s steakhouses featuring Bar 12-21 to 44.
  • These laws and regulations have and will continue to require certain of the Company’s restaurant locations to include specified nutritional information on its menu and other materials presented to guests or to otherwise post such information in the Company’s restaurants.
  • Morton’s Restaurant Group, Inc. business model creates value for their customers and employees by:
  • Morton's Restaurant Group, Inc. Company Analysis

    1. 1. Morton’s Restaurant Group, Inc. HFT6299 8/4/09 Company Analysis Joel Bartimmo Larry Nagazina
    2. 2. <ul><li>Owns and operates three restaurants (as of 1/4/09) </li></ul><ul><ul><li>Morton’s The Steakhouse (80) </li></ul></ul><ul><ul><li>Bertolini’s Authentic Trattorias (2) </li></ul></ul><ul><ul><li>Trevi (1) </li></ul></ul><ul><li>Symbol: MRT </li></ul><ul><li>Exchange: NYSE </li></ul><ul><li>Industry: Restaurants </li></ul><ul><li>Segment: Upscale Fine Dining – Steakhouse </li></ul><ul><li>Period: 05/08/09 vs. 05/02/08 </li></ul>
    3. 3. <ul><li>Stock Price $3.58 (8/4/09) </li></ul><ul><li>52-Week High $ 7.91 (8/11/08) </li></ul><ul><li>52-Week Low $1.42 (2/3/09) </li></ul><ul><li>Shares Outstanding 16.58 million </li></ul><ul><li>Market Cap 59.36 million </li></ul><ul><li>Debt/Equity Ratio 0.91 </li></ul><ul><li>Price/Book Value per Share 0.63 </li></ul>
    4. 4. <ul><li>vs. Last Year 2009 2008 </li></ul><ul><li>ROA -0.72% 0.76 </li></ul><ul><li>ROIC -0.92% 0.94 </li></ul><ul><li>ROE -2.17% 1.52% </li></ul><ul><li>Inventory Turnover 5.55 5.93 </li></ul><ul><li>Revenue per Employee 25.29 N/A </li></ul><ul><li>Net Income per Employee -0.59 N/A </li></ul>
    5. 5. <ul><li>Recommend: HOLD </li></ul><ul><li>Analyst consensus: Morton’s Restaurant Group, Inc., a micro-cap value company in the consumer services sector, is expected to underperform the market over the next six months with above average risk. </li></ul><ul><li>With an uncompromising commitment to quality and a strong brand, Morton’s is well positioned for long-term growth once the economy improves. Morton’s outlook over the near term remains difficult for the following reasons: </li></ul><ul><ul><li>Comparable restaurant revenues at Morton’s declined 5.2% for the 2008 fiscal year, reflecting the weak economy and its impact on guest traffic. </li></ul></ul><ul><ul><li>The decline in comparable restaurant revenues adversely impacted earnings due to the deleveraging on the fixed cost base. </li></ul></ul>
    6. 6. <ul><li>In 2008, opened four new Morton’s steakhouses: Naperville, IL (March); Coral Gables, FL (June); Brooklyn, NY (November); and Ft. Lauderdale, FL (December) </li></ul><ul><li>Closed two underperforming Morton’s steakhouses in 2008 in Kansas City, MO and Charlotte, NC and also closed a Bertolini’s in Indianapolis, IN </li></ul><ul><li>Morton’s steakhouses introduced several new menu items, including Morton’s Baked Five Onion Soup, Macaroni & Cheese, Carrot Cake and Chocolate Mousse </li></ul><ul><li>Continued to expand their new bar dining concept, Bar 12  21, designed to broaden Morton’s demographic appeal and attract more guests </li></ul><ul><li>As of February 23, 2009, the Company currently has signed leases for new Morton’s steakhouses in Dallas, TX; Indian Wells, CA; Miami Beach, FL; and in Mexico City, Mexico (through a joint venture structure) </li></ul>
    7. 7. <ul><li>Morton’s maintains a competitive advantage by promoting private dining for meetings and special events in their private dining Boardrooms, which generated approximately 19% of Morton’s revenues in fiscal 2008 </li></ul><ul><li>Total revenues increased 0.2% from the previous year to $345.5 million for fiscal 2008 due to the positive impact of new Morton’s steakhouses; a longer fiscal year (53 weeks vs. 52 weeks in 2007); and revenues from New Year’s Eve (12/31/07) that were included for 2008, and not in the 2007 results </li></ul>
    8. 8. <ul><li>Trends: </li></ul><ul><li>The Company’s business is somewhat seasonal in nature, with revenues generally being higher in the 1 st and 4 th quarters in part due to increased redemption of gift cards and/or certificates and increased usage of Boardrooms and holiday sales, respectively </li></ul><ul><li>There is pending and new legislation by certain states and other municipalities relating to nutritional content, nutritional labeling and menu labeling regulations </li></ul><ul><li>The Company purchases large quantities of beef, particularly USDA prime aged beef, which is subject to extreme price fluctuations due to seasonal shifts, climate conditions, industry demand and other factors (beef costs represented approx. 46%, 48% and 47% of their food and beverage costs during fiscal 2008, 2007, and 2006 respectively </li></ul>
    9. 9. <ul><li>Creating a universal standard for décor and interior design </li></ul><ul><li>Restaurant managers are provided with operations manuals to ensure uniform operations relating to F&B preparation and the operation of restaurants </li></ul><ul><li>Conducts “Morton’s University,” which is a one-week classroom experience for entry-level managers, that focuses on specific expectations, accountability, and communication </li></ul><ul><li>Each Morton’s and Italian restaurants have similar menu items and common operating methods, allowing for more effective management operating controls </li></ul><ul><li>Make extensive use of information technology to provide management with pertinent information on daily revenues and inventory requirements </li></ul><ul><li>Staff for a typical Morton’s consists of one general manager, up to four additional managers and approximately 30 to 90 hourly employees </li></ul><ul><li>Staff for their Italian restaurants consists of one general manager, up to six additional managers and approximately 40 to 125 hourly employees </li></ul>
    10. 12. 1 ST QTR 2009 1 ST QTR 20 08 Current Ratio 0.59 0.61 Debt/Equity Ratio 2.02 0.99 TIE Ratio -0.96 5.61 Working Capital Intensity -3.52 -3.16 ROIC -0.92% 0.94%
    11. 16. Who’s hungry?