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Scottsdale-based Kona Grill, Inc (KONA - Snapshot Report) recently announced that its Chief Financial Officer (CFO) and President Marc A. Buehler has resigned to pursue other opportunities.

Buehler joined the American grill and sushi bar company as the CFO and President in November 2009 and took all possible measures to improve the company’s top line and narrow down the loss. However, during his tenure, the company posted a profit only once.

Until a permanent CFO is selected, Kona Grill has decided that Michael A. Nahkunst, a member of the company’s board, will serve as the interim CFO. Nahkunst boasts an experience of 35 years in the restaurant industry and has previously served as the chief operating officer of The Cheesecake Factory Incorporated (CAKE - Analyst Report) and BJ's Restaurants Inc (BJRI - Analyst Report).

Nahkunst also held a senior position at Brinker International Inc (EAT) and played a key role in developing the restaurant concept during his tenure of 17 years. Presently, Nahkunst is a principal at Bailiwick Capital Partners, a financial advisory and investment firm focused on retail and restaurant projects.

The company’s search for the new CFO has begun. However, given the experience of Nahkunst, we believe he will do justice to the position of CFO and guide the company to new heights.

In the recent first quarter 2011 results, the company reported a loss of 1 cent, which was better than the Zacks Consensus Estimate of a loss of 4 cents and the year-ago quarter loss of 10 cents.

However, the company experienced a 12.3% upside in restaurant sales on the back of higher same-store sales (up 7.6%). Despite higher commodity pressure, the company’s restaurant operating margin expanded 14.0%.

For the second quarter of 2011, Kona Grill estimates earnings in the range of 2 cents to 4 cents and restaurant sales between $24.0 million and $25.0 million.

Kona Grill currently operates 25 restaurants in 16 states, including Arizona, Colorado, Florida and Texas.

We currently retain a Zacks #2 Rank, which translates into a short-term Buy rating on the stock. We also reiterate our long-term Outperform recommendation.

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