CINCINNATI, Jan. 16, 2013 /PRNewswire/ -- Frisch's
Restaurants, Inc. (NYSE MKT: FRS) reported a modest decline in
revenue from continuing operations during its 12-week fiscal 2013
second quarter ended December 11,
2012 as consolidated revenue from continuing operations
declined 2.8 percent to $48,522,512
from $49,937,574 in last year's
second quarter. Net earnings from continuing operations
for the quarter also declined 2.8 percent to $2,000,384 compared to $2,058,823 last year. Diluted earnings per share
from continuing operations were $0.39
per share compared to $0.42 per share
last year. Year-to-date revenue from continuing operations was
$109,147,808 versus $111,298,919 in the prior year, and year-to-date
earnings from continuing operations grew 17.5% to $2,958,377 from $2,518,853 in the prior year.
Same store sales from continuing operations were down 1.7
percent in the second quarter fiscal 2013 while overall sales
decreased 2.8 percent as a result of last fiscal year's closures of
underperforming Big Boy restaurants offset in part by new
restaurant openings. Gross profit from continuing operations
increased 2.7 percent in the quarter versus the prior year,
resulting from lower food and payroll costs as a percentage of
revenues combined with menu price increases.
At the Corporate level, administrative and advertising expense
decreased 2.6 percent in second quarter fiscal 2013 primarily as a
result of lower head count resulting from cost cutting measures
implemented in fiscal 2013. The effective tax rate increased
to 34.7 percent in the quarter compared to 23.4 percent in last
year's second quarter due to changes in tax credits and the
placement of a valuation allowance on certain deferred state
taxes.
As previously reported, the Company disposed of its Golden Corral restaurant operations in
May 2012, which consisted of the
assets of 29 restaurants. In addition, the Company had
previously closed six under-performing Golden Corral restaurants in August 2011, which resulted in a non-cash pretax
asset impairment charge of $4,000,000
that was recorded in the first quarter fiscal 2012. The
results of operations of Golden
Corral, along with the above described first quarter fiscal
2012 impairment charge, are presented as discontinued operations in
the consolidated financial statements in the prior year's
results.
As previously reported, on July 25,
2012, the Board of Directors declared a special one-time
cash dividend of $9.50 per share
which was paid on September 14, 2012
to shareholders of record on August
31, 2012. The total for the special dividend amounted
to $47,963,000 and accounts for
significant changes in cash balances and shareholders' equity in
the quarter compared to fiscal 2012 year end.
Craig F. Maier, President and
Chief Executive Officer, said, "Our second quarter showed mixed
results as lower customer counts adversely affected same store
sales while our food and payroll costs, as a percentage of sales,
declined from the prior year resulting in gross profit margin
improving to 12.3 percent in the quarter versus 11.7 percent in the
prior year. In addition, we have reduced our costs and
personnel in the corporate headquarters to better match our
overhead structure with our business after the sale of Golden Corral."
Frisch's Restaurants, Inc. is a regional company that
operates full service family-style restaurants under the name
"Frisch's Big Boy." All Big Boy restaurants are currently
located in various regions of Ohio, Kentucky and Indiana.
The Company owns the trademark "Frisch's" and has exclusive,
irrevocable ownership of the rights to the "Big Boy" trademark,
trade name and service marks 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 opened one new Big Boy restaurant in August in our
first quarter with plans to open another restaurant in the spring
of 2013. Frisch's currently operates 94 company-owned Big Boy
restaurants and there are an additional 25 franchised Big Boy
restaurants operated by licensees.
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.
[See attached Financial Statements]
Frisch's
Restaurants, Inc. and Subsidiaries
|
CONSOLIDATED STATEMENT OF EARNINGS
(unaudited)
|
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-eight weeks ended
|
|
Twelve
weeks ended
|
|
|
Dec.
11,
|
|
Dec.
13,
|
|
Dec.
11,
|
|
Dec.
13,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
Sales
|
$
109,148
|
|
$
111,299
|
|
$
48,523
|
|
$
49,938
|
Cost of
sales
|
|
|
|
|
|
|
|
|
Food and
paper
|
36,435
|
|
37,610
|
|
16,159
|
|
16,772
|
|
Payroll
and related
|
38,086
|
|
39,237
|
|
16,634
|
|
17,334
|
|
Other
operating costs
|
22,859
|
|
23,470
|
|
9,738
|
|
9,995
|
|
|
97,380
|
|
100,317
|
|
42,531
|
|
44,101
|
|
|
|
|
|
|
|
|
Gross
profit
|
11,768
|
|
10,982
|
|
5,992
|
|
5,837
|
|
|
|
|
|
|
|
|
|
|
Administrative and advertising
|
7,414
|
|
7,582
|
|
3,021
|
|
3,102
|
|
Franchise
fees and other revenue
|
(751)
|
|
(694)
|
|
(322)
|
|
(304)
|
|
Loss on
sale of assets
|
14
|
|
-
|
|
2
|
|
-
|
|
Impairment
of long lived assets
|
70
|
|
-
|
|
-
|
|
-
|
Operating
profit
|
5,021
|
|
4,094
|
|
3,291
|
|
3,039
|
|
Interest
expense
|
550
|
|
808
|
|
229
|
|
351
|
Earnings
from continuing operations before income taxes
|
4,471
|
|
3,286
|
|
3,062
|
|
2,688
|
Income
taxes
|
1,512
|
|
767
|
|
1,062
|
|
629
|
Earnings
from continuing operations
|
2,959
|
|
2,519
|
|
2,000
|
|
2,059
|
(Loss)
Earnings from discontinued operations, net of tax
|
(158)
|
|
(2,005)
|
|
-
|
|
729
|
NET
EARNINGS
|
$
2,801
|
|
$
514
|
|
$
2,000
|
|
$
2,788
|
|
|
|
|
|
|
|
|
|
Earnings
per share (EPS) of common stock:
|
|
|
|
|
|
|
|
|
Basic net
earnings per share:
|
|
|
|
|
|
|
|
|
Earnings
from continuing operations
|
$
0.59
|
|
$
0.51
|
|
$
0.40
|
|
$
0.42
|
|
(Loss)
Earnings from discontinued operations
|
$
(0.03)
|
|
$
(0.41)
|
|
$
-
|
|
$
0.15
|
|
Basic net
earnings per share
|
$
0.56
|
|
$
0.10
|
|
$
0.40
|
|
$
0.57
|
|
|
|
|
|
|
|
|
|
|
Diluted
net earnings per share:
|
|
|
|
|
|
|
|
|
Earnings
from continuing operations
|
$
0.59
|
|
$
0.51
|
|
$
0.39
|
|
$
0.42
|
|
(Loss)
Earnings from discontinued operations
|
$
(0.03)
|
|
$
(0.41)
|
|
$
-
|
|
$
0.14
|
|
Diluted
net earnings per share
|
$
0.56
|
|
$
0.10
|
|
$
0.39
|
|
$
0.56
|
|
|
|
|
|
|
|
|
Diluted
average shares outstanding
|
5,028
|
|
4,939
|
|
5,070
|
|
4,937
|
|
|
|
|
|
|
|
|
Depreciation included above
|
$
5,534
|
|
$
5,473
|
|
$
2,422
|
|
$
2,361
|
|
|
|
|
|
|
|
|
Opening
expense included above
|
$
277
|
|
$
398
|
|
$
73
|
|
$
115
|
|
|
|
|
|
|
|
|
|
Frisch's
Restaurants, Inc. and Subsidiaries
|
CONSOLIDATED BALANCE SHEET
|
(In
thousands of dollars)
|
|
|
|
December
11,
|
|
May
29,
|
|
|
|
2012
|
|
2012
|
|
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and
equivalents
|
$
3,747
|
|
$
49,455
|
|
|
Receivables
|
1,565
|
|
1,683
|
|
|
Inventories
|
6,010
|
|
5,590
|
|
|
Other
current assets
|
2,211
|
|
3,010
|
|
|
Current
assets of discontinued operations
|
115
|
|
190
|
|
|
|
13,648
|
|
59,928
|
|
|
|
|
|
|
|
Property
and equipment
|
102,509
|
|
102,139
|
|
|
|
|
|
|
|
Other
assets
|
|
|
|
|
|
Goodwill
& other intangible assets
|
776
|
|
777
|
|
|
Property
held for sale and land investments
|
8,968
|
|
11,484
|
|
|
Deferred
income taxes and other
|
6,043
|
|
5,641
|
|
|
|
15,787
|
|
17,902
|
|
|
|
|
|
|
|
|
|
$
131,944
|
|
$
179,969
|
|
|
|
|
|
|
Liabilities and shareholders' equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
$
7,975
|
|
$
6,293
|
|
|
Accrued
expenses
|
7,966
|
|
7,342
|
|
|
Other
|
6,403
|
|
7,857
|
|
|
Current
liabilities of discontinued operations
|
186
|
|
683
|
|
|
|
22,530
|
|
22,175
|
|
|
|
|
|
|
|
Long-term
obligations
|
|
|
|
|
|
Long-term
debt
|
11,434
|
|
14,446
|
|
|
Other
long-term obligations
|
21,843
|
|
21,623
|
|
|
|
33,277
|
|
36,069
|
|
|
|
|
|
|
|
Shareholders' equity
|
76,137
|
|
121,725
|
|
|
|
|
|
|
|
|
|
$
131,944
|
|
$
179,969
|
|
|
|
|
|
|
SOURCE Frisch's Restaurants, Inc.