Benihana Inc. (BNHN) announced the appointment of David Flanery, as its new chief financial officer (CFO), effective immediately. Flanery served the same post at Papa John's International Inc. (PZZA) before joining Benihana.
With 17 years of experience at Papa John, Flanery can easily be called an industry veteran. At Benihana, he succeeds interim CFO, Gene R. Baldwin, who took up the post in January 2010 and will continue for some time to facilitate the transition. Flanery will be based in Miami and report directly to Richard Stockinger, the chairman, president and chief executive officer of Benihana.
Earlier, Flanery played a key role in developing the restaurant concept at Papa John’s, mentoring its growth from a regional chain of 400 restaurants to a global brand with 3,700 restaurants in all U.S. states and 32 countries. From 2004 to 2011, he worked as a CFO at Papa John’s. He also handled international operations for approximately three years. Flanery’s finance functions included SEC reporting, treasury management and investor relations. Prior to joining Papa John's in 1994, he spent 15 years with Ernst & Young.
In the fourth quarter of 2011, Benihana’s earnings missed our estimates and were also down 77.8% from the year-ago level. However, the leading operator of Japanese restaurants in the U.S. posted a 5.1% year-over-year increase in total revenue to $81.8 million. The growing trend of revenue was maintained in its monthly results as evident from the 6.3% increase in sales for the four-week period ending July 17, 2011. For the four-week periods ending April 24, May 22 and June 19, restaurant sales also grew 5.8%, 4.5% and 6.0%, respectively.
Management believes that, with exceptional restaurant service expertise, Flanery will add further value and drive Benihana's growth and profitability ahead.
However, the transition is still at its early stage, keeping us cautious until there is further evidence of successful execution. We are maintaining our long-term Underperform recommendation on the stock.
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