- Fiscal 2008 Full-Year Revenues Increased 0.2% to $354.5 Million -

- Fiscal 2008 Fourth Quarter Revenues of $93.5 Million -

- Company Provides Guidance for Fiscal First Quarter and Full Year 2009 -

CHICAGO, March 9 /PRNewswire-FirstCall/ -- Morton's Restaurant Group, Inc. (NYSE: MRT) today reported unaudited financial results for its fiscal 2008 fourth quarter and its fiscal year ended January 4, 2009.

The three month period ended January 4, 2009 as compared to the three month period ended December 30, 2007 (14 weeks to 13 weeks)

• Revenues decreased 7.0% to $93.5 million.
• Comparable restaurant revenues for Morton's steakhouses decreased 12.0% for the three month period ended January 4, 2009. The fourth quarter of fiscal 2008 included 14 weeks as compared to 13 weeks in the fourth quarter of fiscal 2007. The fourth quarter of fiscal 2008 also included revenue from New Year's Eve and the fourth quarter of fiscal 2007 did not include revenue from New Year's Eve. Excluding the last week of fiscal 2008, comparable restaurant revenues for Morton's steakhouses would have decreased 17.9% for the fourth quarter of fiscal 2008. For the prior year's comparable quarter, the three month period ended December 30, 2007, comparable restaurant revenues for Morton's steakhouses had decreased 0.4%.
• The decrease in revenues is primarily attributable to the decrease in comparable restaurant revenues. A portion of the decrease was offset by an increase in revenues from four new Morton's steakhouses which opened during fiscal 2008.
• The fourth quarter of fiscal 2008 included three unusual items:
  • During the fourth quarter of fiscal 2008, the Company performed its annual impairment analysis and completed the fair value allocation process necessary to determine the impairment of goodwill and recorded an additional charge of $8.1 million or $0.52 per diluted share. In addition, the Company recorded a non-cash impairment charge for certain long-lived assets of $2.3 million pre-tax and $1.3 million after-tax or $0.08 per diluted share.
  • Wage and hour and similar labor claims have been plaguing the industry. The Company settled several such claims and recorded a charge of $3.7 million pre-tax and $2.3 million after-tax or $0.15 per diluted share, for these and certain other labor claims. This charge was included in general and administrative expenses in the consolidated statements of operations.
  • The Company recorded lease exiting and related costs of $0.9 million pre-tax and $0.6 million after-tax or $0.04 per diluted share relating to the closures of the New York office and two Morton's steakhouses.
• Including these unusual items, the Company's net loss was $(8.1) million, or $(0.51) per diluted share, for the three month period ended January 4, 2009 compared to net income of $6.4 million, or $0.38 per diluted share, for the three month period ended December 30, 2007.
• Excluding these unusual items, the Company had adjusted net income of $4.3 million, or $0.27 per diluted share, for the three month period ended January 4, 2009 compared to adjusted net income of $6.2 million, or $0.36 per diluted share, for the three month period ended December 30, 2007. (Please refer to the reconciliation of adjusted net income to GAAP net income (loss) in the financial tables that follow.)

Fiscal year 2008 as compared to fiscal year 2007 (53 weeks to 52 weeks)

• Revenues increased 0.2% to $354.5 million.
• Comparable restaurant revenues for Morton's steakhouses decreased 5.2% for the fiscal year ended January 4, 2009. Due to a fiscal calendar shift, the first quarter of fiscal 2008 included revenue from New Year's Eve (December 31, 2007) and the first quarter of fiscal 2007 did not include revenue from New Year's Eve. Furthermore, fiscal 2008 included 53 weeks compared to 52 weeks in fiscal 2007. Excluding the first day of both fiscal years and excluding the last week of fiscal 2008, comparable restaurant revenues for Morton's steakhouses would have decreased 7.6% for fiscal 2008. For fiscal 2007, the Company had reported an increase of comparable restaurant revenues for Morton's steakhouses of 2.6%.
• The increase in revenues is primarily attributable to revenues from five new Morton's steakhouses, which opened during fiscal 2007, and four new Morton's steakhouses, which opened during fiscal 2008, as well as the additional week in fiscal 2008 and the revenue from two New Year's Eves (December 31, 2007 and 2008) being included in fiscal 2008. A substantial portion of this increase was offset by the decrease in comparable restaurant revenues.
• Fiscal 2008 included three unusual items:
  • As previously reported, after performing the interim test for impairment, it was determined that goodwill, the intangible asset and certain long-lived assets were impaired and the Company accordingly recorded non-cash impairment charges of $69.8 million pre-tax and $60.7 million after-tax or $3.83 per diluted share during the third quarter of fiscal 2008. The non-cash impairment charges of $69.8 million consisted of $44.0 million for goodwill, $6.0 million for the intangible asset and $19.8 million for certain long-lived assets. The Company performed its annual impairment analysis and completed the fair value allocation process necessary to determine the impairment of goodwill during the fourth quarter of fiscal 2008 and recorded an additional charge of $8.1 million or $0.52 per diluted share. In addition, during the fourth quarter of fiscal 2008, the Company recorded a non-cash impairment charge for certain long-lived assets of $2.3 million pre-tax and $1.3 million after-tax or $0.08 per diluted share.
  • As stated above, the Company settled several wage and hour and similar labor claims and recorded a charge of $3.7 million pre-tax and $2.3 million after-tax or $0.15 per diluted share, for these and certain other labor claims. This charge was included in general and administrative expenses in the consolidated statements of operations.
  • As stated above, the Company recorded lease exiting and related costs of $0.9 million pre-tax and $0.6 million after-tax or $0.04 per diluted share relating to the closures of the New York office and two Morton's steakhouses.
• Including these unusual items, the Company's net loss was $(67.7) million, or $(4.21) per diluted share, for fiscal year ended January 4, 2009 compared to net income of $13.0 million, or $0.77 per diluted share, for fiscal year ended December 30, 2007.
• Excluding these unusual items, the Company had adjusted net income of $5.4 million, or $0.33 per diluted share, for fiscal year ended January 4, 2009 compared to adjusted net income of $12.7 million, or $0.75 per diluted share, for fiscal year ended December 30, 2007. (Please refer to the reconciliation of adjusted net income to GAAP net income (loss) in the financial tables that follow.)

As previously announced, Morton's revenues and results have been pressured by the continuing global recession, which has impacted guest traffic throughout the industry. Negative comparable restaurant revenues adversely impacted earnings due to the deleveraging on the fixed cost base.

'We firmly believe that our strong Morton's brand, our warm, genuine hospitality, our world-class menu featuring 'The Best Steak Anywhere' and our broad wine and spirits selections truly distinguish Morton's,' said Thomas J. Baldwin, Chairman and Chief Executive Officer of Morton's Restaurant Group, Inc. 'We are continually striving to enhance our relationships with our guests and their Morton's experiences. We place great emphasis on the many operational, marketing and strategic initiatives we have undertaken to address the weakened economy and continue to work hard to aggressively manage those elements of our business that are within the Company's control.