FOG CUTTER CAPITAL GROUP INC. REPORTS FIRST QUARTER 2008 OPERATING RESULTS
May 15, 2008
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FOG CUTTER CAPITAL GROUP INC. |
| CONTACT: |
Fog Cutter Capital Group Inc. |
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(503) 721-6500 Andrew A. Wiederhorn, Chairman and CEO |
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(503) 721-6500 R. Scott Stevenson, CFO |
For Immediate Release
FOG CUTTER CAPITAL GROUP INC.
REPORTS FIRST QUARTER 2008 OPERATING RESULTS
PORTLAND, Ore. — May 15, 2008 – Fog Cutter Capital Group Inc. (OTCBB: FCCG.OB) reported a net loss of $0.4 million or $0.05 per share for the three months ended March 31, 2008. These results compare to a net loss of $3.7 million or $0.46 per share for the first quarter of 2007.
The Company’s Fatburger business segment continues to operate in a growth stage, which is anticipated will yield long term value. Thus far during 2008, Fatburger has opened five new franchise locations and acquired ownership of two existing franchise restaurants.
The Company is continuing its strategy to dispose of its non-core businesses in order to focus on the Fatburger expansion. On February 15, 2008, the Company sold its interest in Fog Cap Retail Investors LLC, a wholly owned subsidiary that owned a portfolio of leased real estate consisting of 72 freestanding retail locations throughout the United States. The Company recorded a $4.2 million gain on the sale.
Fatburger Operations
Fatburger, “The Last Great Hamburger Stand”®, opened its first restaurant in Los Angeles in 1952. At March 31, 2008, there were 96 Fatburger restaurants located in 15 states, Canada, and the Company’s first store in China. Since that date, one more franchise restaurant has opened, bringing the total number of restaurants to 97. Fatburger also caters local events with its “Fatmobile” facility. The Company expects to open an additional 10 to 20 franchise and company owned restaurants during the rest of 2008. Fatburger specializes in fresh, made to order hamburgers and other specialty sandwiches. French fries, homemade onion rings, hand-scooped ice cream shakes and soft drinks round out the menu.
In September 2007, the Company opened its first Fatburger restaurant in China, located in the Venetian® Macao-Resort-Hotel. Fatburger plans to open additional locations in China, including locations in Hong Kong, Macao, Shenzhen, Beijing and Shanghai. Fatburger also recently signed its first development agreement to open locations this year in Dubai and elsewhere in the United Arab Emirates.
Fatburger plans to open additional restaurants throughout the United States and internationally through a combination of company owned restaurants and franchised locations. Franchisees currently own and operate 55 of the Fatburger locations and the company has agreements for 245 new franchise locations.
For the three months ended March 31, 2008, company-owned restaurant sales increased 4.0% to $7.9 million compared to the same period in 2007.
Other Operations
In addition to restaurant operations through Fatburger, the Company currently conducts operations in three other business segments: (1) manufacturing activities conducted through its DAC International subsidiary; (2) real estate operations; and (3) software development and sales conducted through its Centrisoft Corporation subsidiary.
Manufacturing Operations
The Company’s manufacturing activities are conducted through DAC International, a supplier of computer controlled lathes and milling machinery for the production of eyeglass, contact, and intraocular lenses.
Real Estate Operations
As of March 31, 2008 the Company owned two apartment buildings through equity participating loans to special purpose Spanish corporations. The properties consist of 33 residential and commercial units located in Barcelona, Spain. The two buildings were acquired subject to below market leases and the Company has relocated most of these tenants and is now selling the properties for redevelopment. These properties are classified as Held for Sale.
Software Development and Sales
The Company’s Centrisoft subsidiary develops and sells software that controls and enhances the productivity of enterprise networks and provides first level security against unauthorized applications and users. Centrisoft is marketing its software to potential customers primarily through re-seller relationships.
Forward Looking Statements
Certain statements contained herein and certain statements contained in future filings by the Company with the SEC may not be based on historical facts and are “Forward-Looking Statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-Looking Statements are based on various assumptions and events (some of which are beyond the Company’s control) and may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Actual results could differ materially from those set forth in Forward-Looking Statements due to a variety of factors, including, but not limited to the Risk Factors identified herein and the following:
• economic factors, particularly in the market areas in which the Company operates;
• the financial and securities markets and the availability of and costs associated with sources of liquidity;
• competitive products and pricing;
• the real estate market, including the residential real estate market in Barcelona, Spain;
• the ability to sell assets to maintain liquidity;
• fiscal and monetary policies of the U.S. Government;
• changes in prevailing interest rates;
• changes in currency exchange rates;
• acquisitions and the integration of acquired businesses;
• performance of retail/consumer markets, including consumer preferences and concerns about diet;
• effective expansion of the Company’s restaurants in new and existing markets;
• profitability and success of franchisee restaurants;
• availability of quality real estate locations for restaurant expansion;
• the market for Centrisoft’s software products;
• credit risk management; and asset/liability management
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