CINCINNATI, April 10 /PRNewswire-FirstCall/ -- Frisch's Restaurants, Inc. (AMEX:FRS) reported record sales for the 12-week third quarter ended March 5, 2006. Revenues rose 7.1% to $67,259,863 from $62,798,667 for last year's third quarter. Earnings for the quarter declined 64% to $2,205,698 compared to $6,184,949 last year, which included a non-taxable gain of $4,440,000 from life insurance proceeds. Diluted earnings per share decreased to $.43 per share from $1.20 per share last year. Excluding the insurance gain, earnings for the third quarter last year were $1,744,949, or $.34 per diluted share. Comparing current year earnings to these adjusted amounts, net earnings rose 26.4% for the quarter.
For the first three quarters of the fiscal year, revenue rose 3.3% to a record $220,745,741 from $213,608,307 for the first three quarters of last year. Earnings declined 46% to $6,490,500 from $11,925,855. Diluted earnings per share were $1.26 for the first three quarters of fiscal 2006 versus $2.31 per share last year. Comparing the current year earnings to last year without the unusual non-taxable insurance gain, earnings for the first three quarters declined 13.3% from last year.
Craig F. Maier, President and Chief Executive Officers, said, "As always, results in the third quarter are heavily dependent upon winter weather. This year, our major snowstorm arrived in the second quarter rather than the third quarter, as it did last year. In addition, it was in the third quarter last year that the Midwest economy weakened. That makes the year over year comparisons much easier. For both these reasons, our Big Boy sales were up 1.8% in the third quarter. While we are still down .3% year to date, we expect that we will be able to make up the difference by year's end." Mr. Maier continued, "Same store sales for Golden Corral restaurants declined 1.5% during the quarter and are off 7.8% on a year to date basis. The improvement to a sales decline of only 1.5% is significant because it ended three consecutive quarters of double-digit decreases. And although mild winter weather played its part, we saw immediate improvement 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 year to date 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) Forty weeks ended Twelve weeks ended
March 5, March 6, March 5, March 6,
2006 2005 2006 2005
(restated) (restated) Sales $220,746 $213,608 $67,260 $62,799 Cost of sales
Food and paper 77,317 75,144 23,703 22,391
Payroll and related 72,970 70,984 22,218 20,941
Other operating costs 48,716 44,021 14,787 13,263
199,003 190,149 60,708 56,595
Gross profit 21,743 23,459 6,552 6,204 Administrative and advertising 11,158 10,887 3,235 3,222
Franchise fees and
other revenue (961) (1,026) (298) (292)
(Gains) losses on
sale of assets (393) (89) (394) Operating profit 11,939 13,687 4,009 3,274
Interest expense 2,104 2,173 665 726
Life Insurance - death
benefit in excess of
cash surrender value - (4,440) - (4,440)
Earnings before income tax 9,835 15,954 3,344 6,988
Income taxes 3,344 4,028 1,138 803
NET EARNINGS $6,491 $11,926 $2,206 $6,185 Earnings per share (EPS)
of common stock:
Basic net earnings per share $1.28 $2.37 $.43 $1.22
Diluted net earnings per share $1.26 $2.31 $.43 $1.20 Diluted average shares outstanding 5,161 5,156 5,160 5,163
Depreciation included above $9,886 $9,015 $3,025 $2,785
Opening expense included above $1,380 $1,146 $249 $96 Frisch's Restaurants, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET
(In thousands of dollars) March 5, May 29,
2006 2005
(unaudited)
Assets
Current assets
Cash and equivalents $534 $306
Receivables 2,242 1,390
Inventories 4,668 4,592
Other current assets 3,490 3,762
10,934 10,050 Property and equipment 154,102 148,202 Other assets
Goodwill & other intangible assets 2,161 2,141
Property held for sale
and land investments 3,961 2,832
Other 3,919 4,240
10,041 9,213 $175,077 $167,465
Liabilities and shareholders' equity
Current liabilities
Accounts payable $11,689 $12,799
Accrued expenses 9,601 8,764
Other 10,372 9,399
31,662 30,962 Long-term obligations
Long-term debt 32,488 29,570
Other long-term obligations 12,357 13,532
44,845 43,102 Shareholders' equity 98,570 93,401 $175,077 $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/
|