Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good day, and welcome to the Landry's Restaurant Incorporated second quarter 2008 earnings release conference call. (OPERATOR INSTRUCTIONS). This conference call contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by Safe Harbors created thereby. Stockholders are cautioned that all forward-looking statements are based largely on the Company's expectations and involve risks and uncertainties, some of which cannot be predicted or are beyond the Company's control. A statement about the merge agreement entered into the Company and Fertitta Holdings and whether it will be consummated or a statement containing a projection of revenues, income, earnings per share, same-store sales, capital expenditures or future economic performance, are just a few examples of forward-looking statements. Some factors that could realistically cause results to differ materially from those projected in the forward-looking statements include the inability to complete the merger due to the failure to obtain stockholder approval for the merger, or the failure to satisfy any condition to completion of the merger; ineffective marketing or promotions; competitions, weather; floor management turnover; a weak economy; negative same-store sales or the Company's inability to continue is expansion strategy. The Company may not update or revise any forward-looking statements made during this conference call. At this time, I would like to turn the conference call over to Chairman of the Board, President and Chief Executive Officer, Mr. Tilman Fertitta. Please go ahead, sir.
RICK H. LIEM, CFO, EVP & CONTROLLER, LANDRY'S RESTAURANTS: Hello, everybody. This is Rick Liem, the Chief Financial Officer. I would like to welcome everybody to Landry's second quarter 2008 conference call. This morning, we reported our second quarter 2008 results from continuing operations of $0.91 per share on revenues of 311 million, versus $0.44 in the prior year on revenues of 308 million. A noncash gain due to the change in value of interest rates swaps offset by a noncash impairment expense contributed $0.12 per share to the second quarter 2008 results. Expenses associated with our internal stock options review and refinancing the Golden Nugget last year reduced 2007 earnings by $0.31 per share. Net of these items, we earned $0.79 per share this year compared to $0.74 last year. Our diversified portfolio of waterfront and specialty location restaurants, entertainment and hospitality locations contributed to these results. Same-store sales for the second quarter were negative 2.5%. This year's shift of Easter to the first quarter negatively effected the second quarter. May was positive, and June was negative. July, our biggest month of the year, was flat, which is very encouraging.
For the quarter, sales were negative across most geographic regions with the exception of Texas. Strong performance at the Kemah Boardwalk, other waterfront properties and our hospitality locations helped to drive the positive result for the Texas market, and we believe the declining price of oil will be helpful to the consumer going forward. We continue to focus on efficient labor scheduling and cost controls while maintaining an emphasis on customer service. In connection with these efficiency initiatives, we analyzed the operating hours and revenues for every one of our restaurants during the second quarter, resulting in closing many units a little earlier on week days and opening a little later where the revenues did not justify the cost of being open. While this may have contributed to our same-store sales decline, those sales were not profitable. We will do this again after the summer season ends. We continue towards completion of our T-Rex unit in Disney, expected to open in October, 2008, and beginning construction on the new tower of the Golden Nugget in Las Vegas. Overall unit level margins in our restaurant hospitality group decreased 1/10 of 1% in the second quarter compared to the prior year.
Effective food cost controls and oversight of labor scheduling, offset by higher utilities in Texas, helped to maintain margins during the quarter. We anticipate cost pressures to continue for some food items, offset by stable or improving costs on beef, shrimp, lobster and fish. Saltgrass Steakhouse, our only true suburban location concept was soft in the second quarter. Sales for the concept were slowest during the …