Kona Grill executives assured analysts Thursday that they intend to bring the past year’s chief executive carousel to a standstill.
Current chief executive and president Berke Bakay, who was appointed in January, said the morale at the Scottsdale, Ariz.-based company remained positive, despite the CEO changes of the past year.
“It's true that there's been a lot of turnover, but I think if you were to poll the board members one by one, they're very confident that we're moving in the right direction,” Kona Grill chairman Jim Jundt told analysts in call after the company released fourth-quarter 2011 earnings.
Marc A. Buehler was let go as CEO in June to be replaced permanently by board member Michael A. Nahkunst in October, who himself was let go to make way for Bakay in January. Bakay is the investment manager to BBS Capital Fund and Kona Grill’s largest shareholder.
Kona Grill, the parent to the 23-unit grill and sushi restaurant chain, swung to a profit in its fourth quarter, booking net income after special charges of $747,000, or 8 cents a share, for quarter ended Dec. 31. In the same quarter a year earlier, Kona booked a net loss of $491,000, or 5 cents a share.
Latest-quarter revenue rose 9.2 percent to $23.1 million.
The company said same-store sales increased 7.8 percent, driven by higher average guest check and 3-percent growth in guest traffic.
In regards to top-level turnover, “The restaurant business is a very hands-on business, and Kona Grill has a lot of great people at the operating level, and we think that Berke will do a great job of empowering these people to continue the good work they've done in the last couple of years,” Jundt said.
Bakay added, “I've been coming to these headquarters for five years now. I would characterize the mood and morale to be extremely positive.”
Jundt hinted that locations of prior executives may have posed problems.
“As you are aware, there is a situation where top management hasn't resided in Phoenix in the past, and there are very few corporations that are operated with management living in one major city a thousand miles away from the headquarters,” he said. “So we're very confident that Berke has probably spent more time here in the last two weeks than part of our management spent in a month.”
Jundt added that Bakay is expected to stay. “As a substantial investor myself, my money is on Berke’s being here 18, 24 and 36 months from now,” he said.