CINCINNATI, July 24 /PRNewswire-FirstCall/ -- Frisch's Restaurants, Inc. (AMEX:FRS) reported record sales for the fiscal year ended May 30, 2006. Revenue rose 4.2% to $290,967,866 from $279,247,122 last year. The fourth quarter of fiscal 2006 included two additional days. Net earnings declined 38% to $9,159,765 from $14,740,825. Last year's earnings included a non- taxable gain of $4,440,000 from life insurance proceeds. Diluted earnings per share were $1.78 for fiscal 2006 versus $2.86 per share last year. Comparing the current year earnings to last year without the unusual non-taxable insurance gain, earnings declined 11.1% from last year.
For the fourth quarter ended May 30, 2006, revenues rose 7% to $70,222,125 from $65,638,815 for last year's fourth quarter. Earnings for the quarter declined 5.2% to $2,669,265 compared to $2,814,970 last year. Diluted earnings per share decreased to $.52 per share from $.55 per share last year.
Craig F. Maier, President and Chief Executive Officers, said, "Fiscal 2006 was a respectable year for us. We achieved record sales for the seventh consecutive year. Also, for the ninth consecutive year, our Big Boy restaurants had same store sales increases. Total sales for our Golden Corral restaurants exceeded $100,000,000 for the first time, despite a same store sales decline of 6.5%.
"We now operate 90 Big Boys and have two relocation units under construction that should begin operation in the fall of 2006. Average weekly sales for our Big Boy restaurants reached $38,100 this year, bringing us very close to average annual sales of $2,000,000." Mr. Maier continued, "Same store sales for Golden Corral restaurants declined at a slower pace in the second half of the year. The improvement in the sales decline came from our marketing campaign, 'Everyone Deserves a Good Meal, Every Day.' We now operate 34 Golden Corral restaurants. Our current plans call for opening only one more Golden Corral over the remainder of calendar year 2006. We believe this decision will allow us to build same store sales by focusing on execution in existing operations." Lower operating earnings can be attributed to both the same store sales declines and to higher operating expenses.
Frisch's Restaurants, Inc. is a regional company that operates full service family-style restaurants under the name "Frisch's Big Boy." The Company also operates grill buffet style restaurants under the name "Golden Corral" pursuant to certain licensing agreements. All Big Boy restaurants are currently located in various regions of Ohio, Kentucky and Indiana. Golden Corral restaurants currently operate primarily in the greater metropolitan areas of Cincinnati, Dayton, Toledo and Cleveland, Ohio, Louisville, Kentucky and Pittsburgh, Pennsylvania. Plans are in place to expand the Golden Corral operation into markets in Columbus, Ohio, northern Indiana and southern Michigan.
The Company owns the trademark "Frisch's" and has exclusive, irrevocable ownership of the rights to the "Big Boy" trademark, trade name and service mark in the states of Kentucky and Indiana, and in most of Ohio and Tennessee. All of the Frisch's Big Boy restaurants also offer "drive-thru" service. The Company also licenses Big Boy restaurants to other operators, currently in certain parts of Ohio, Kentucky and Indiana.
The Company has reported a profit every year since going public in 1960, and paid cash dividends to shareholders every quarter over the same period.
Statements contained in this press release which are not historical facts are forward looking statements as that item is defined in the Private Securities Litigation Act of 1995. Such forward looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Such risks and uncertainties are detailed in the Company's filings with the Securities and Exchange Commission.
Frisch's Restaurants, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share data) Year ended Twelve weeks ended
May 30, May 29, May 30, May 29,
2006 2005 2006 2005 Sales $290,968 $279,247 $70,222 $65,639
Cost of sales
Food and paper 102,106 98,570 24,788 23,426
Payroll and related 96,098 92,352 23,129 21,368
Other operating costs 64,338 57,800 15,622 13,779
262,542 248,722 63,539 58,573 Gross profit 28,426 30,525 6,683 7,066 Administrative and advertising 13,976 13,929 2,818 3,041
Franchise fees and other revenue (1,250) (1,352) (289) (325)
(Gains) losses on sale of assets (568) (87) (175) 2
Operating profit 16,268 18,035 4,329 4,348
Interest expense 2,771 2,820 667 647
Life Insurance - death benefit
in excess of cash surrender
value - (4,440) - -
Earnings before income tax 13,497 19,655 3,662 3,701
Income taxes 4,337 4,914 993 886
NET EARNINGS $9,160 $14,741 $2,669 $2,815 Earnings per share (EPS) of common
stock:
Basic net earnings per share $1.81 $2.92 $.53 $.56
Diluted net earnings per share $1.78 $2.86 $.52 $.55 Diluted average shares outstanding 5,160 5,157 5,158 5,159
Depreciation included above $13,125 $12,116 $3,239 $3,101
Opening expense included above $1,415 $1,487 $35 $341 Frisch's Restaurants, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET
(In thousands of dollars) May 30, May 29,
2006 2005
Assets
Current assets
Cash and equivalents $815 $306
Receivables 1,538 1,390
Inventories 4,792 4,592
Other current assets 4,918 3,762
12,063 10,050 Property and equipment 154,370 148,202 Other assets
Goodwill & other intangible assets 2,125 2,141
Property held for sale and land investments 3,078 2,832
Other 3,647 4,240
8,850 9,213 $175,283 $167,465 Liabilities and shareholders' equity
Current liabilities
Accounts payable $10,330 $12,799
Accrued expenses 9,640 8,764
Other 10,613 9,399
30,583 30,962 Long-term obligations
Long-term debt 30,992 29,570
Other long-term obligations 13,027 13,532
44,019 43,102 Shareholders' equity 100,681 93,401 $175,283 $167,465
DATASOURCE: Frisch's Restaurants, Inc.
CONTACT: Donald H. Walker, Vice President-Finance and CFO of Frisch's Restaurants, Inc., +1-513-559-5202 Web site: http://www.frischs.com/
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