Rubio's Restaurants Inc. reported financial results for the second quarter and first half of the fiscal year ended June 27, 2010.

For the period, same-store sales decreased 3.3 percent in the second quarter of 2010 versus a comps increase of 0.9 percent during the same quarter last year. In the second quarter of 2010, the impact of decreased transaction volume more than offset an increase in the average check per customer, according to the company’s earnings release.

Average unit volume was $977,000 as compared to slightly over $1.0 million from the same year-ago quarter.

Revenues in the second quarter of 2010 totaled $48.5 million, a decrease of less than 1 percent from $48.7 million reported in the same year-ago quarter. Revenue for the first half of 2010 totaled $95.2 million, an increase of just under 1 percent from $95 million in the same year-ago period.

The company’s net loss was reported at $387,000 or $(0.04) per basic and diluted share in the second quarter of 2010 versus net income of $512,000 or $0.05 per basic and diluted share in the same year-ago quarter. Net loss in the second quarter of 2010 included non-recurring expenses associated with the ongoing evaluation of strategic alternatives of $1.1 million or a tax-effected $(0.07) per share. Before these non-recurring expenses, net income in the second quarter of 2010 was $256,000 or $0.03 per basic and diluted share.

For the first half of 2010, net loss was $20,000 or $(0.00) per basic and diluted share, compared to net income of $757,000 or $0.08 per basic and diluted share in the same year-ago period. The first half of 2010 included non-recurring expenses associated with the ongoing evaluation of strategic alternatives of $1.3 million or a tax-effected $(0.07) per share. Before these non-recurring expenses, net income in the first half of 2010 was $741,000 or $0.07 per basic and diluted share.

Cash and cash equivalents at June 27, 2010, totaled $9.5 million, unchanged from December 27, 2009.

Rubio's opened three restaurants in the second quarter of 2010, consistent with three opened in the same period a year-ago. Pre-opening expenses were $177,000 compared to $105,000 in the same quarter last year.

"The ongoing unemployment and housing challenges in the markets we serve, as well as record cool temperatures in Southern California during the second quarter, continued to put pressure on our top line," said Dan Pittard, Rubio's president and CEO. "As the economic and weather conditions continued into the third quarter, we experienced a decrease in comparable store sales of 4.5% through the first five weeks of Q3.

“In response to the continued weakness in the economy and with the prospect of a prolonged and sluggish recovery, we increased media spending and made strategic investments in research geared towards understanding the change in consumer preferences caused by the recession."

Cash merger transaction

As announced on May 10, 2010, Rubio's entered into a definitive agreement under which Mill Road Capital has agreed to acquire each share of Rubio's common stock held by the Rubio's stockholders through a cash merger transaction. Pursuant to the terms of the definitive merger agreement, the outstanding shares of common stock of Rubio's Restaurants will be acquired for $8.70 per share. The aggregate transaction value is approximately $91 million.

The merger is subject to customary closing conditions, including the approval of Rubio's stockholders and regulatory approvals, and is expected to close during the third quarter of 2010. An annual meeting for consideration of the proposed merger has been scheduled for August 23. Ralph Rubio, Dan Pittard and Rosewood Capital, who collectively own approximately 24 percent of the outstanding shares of Rubio's, have each entered into voting agreements in which they have committed to vote in favor of the proposed merger transaction. Mill Road Capital L.P. currently owns approximately 4.9 percent of the outstanding shares.