"Our expansion strategy has been executed in phases," Wagenheim says. "The proceeds from the private placement will enable us to begin our next 'rollout' phase which will increase our visibility in Mid-America."
Granite City plans to add four restaurants next year, six restaurants in 2006 and eight restaurants in 2007. The projected average revenue per unit based on current operating results of $4 to $4.2 million, and projected average income per unit from restaurant operations of 16% to 18% of revenue.
The company hopes its planned expansion will allow it to reduce its general and administrative expenses as a percentage of revenue from the current level of approximately 8% to a range of 7% to 5.7% during that period. The estimates are based on current restaurant pre-opening expense levels ranging from $275,000 to $300,000 per unit.
The company sold securities at $3.25 per share of common stock, with one warrant for every 2.5 shares of common stock sold. The warrants have a term of five years and will be exercisable at $5.00 per share. The company will get about a fifth of the proceeds and the rest once the sale is approved by its shareholders.
Granite City Food & Brewery now has eight Granite City Food & Brewery casual dining restaurants featuring traditional and regional food and handcrafted beers--three in Iowa, two in Minnesota, and one each in North Dakota, South Dakota and Nebraska.
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