CINCINNATI, March 13, 2015 /PRNewswire/ -- Frisch's
Restaurants, Inc. (NYSE MKT: FRS) reported revenue of $52,016,000 during its fiscal 2015 second quarter
ended December 16, 2014 (consisting
of 12 weeks), a 5.7 percent increase over the $49,217,000 reported in the prior year's second
quarter. Net earnings increased 4.9 percent in the second
quarter to $2,464,000 ($0.48 diluted earnings per share (EPS)) up from
$2,350,000 ($0.46 diluted EPS) in the comparable quarter last
year. Several factors contributed to the increase in
net earnings. Increased operating income was driven by
higher sales and lower pension costs, which were offset partly by
higher administrative costs and the impairment in value of a parcel
of real estate. In addition, this year's net earnings for the
second quarter benefitted from an effective tax rate of 23.7
percent, which was an improvement over last year's 26.3 percent
rate.
Year-to-date revenue was $114,599,000 versus $110,453,000 in the prior year, a 3.8
percent increase, and year-to-date net earnings grew 18.7 percent
to $5,087,000 ($0.99 diluted EPS) from $4,286,6000 ($0.84
diluted EPS) in the prior year. In the Company's Quarterly Report
on Form 10-Q for the period ended December
16, 2014, which is being filed today, the Company also
discussed the financial statement impacts of the previously
disclosed embezzlement and revision deemed immaterial in accordance
with applicable accounting rules. The 10-Q discloses a charge
to administrative expense of $232,000
to correct the understatement of gift card liabilities and
overstatement of cash that had occurred in the current fiscal
year.
Same store sales increased 4.8 percent in the second quarter of
fiscal 2015 while customer counts increased 2.0 percent. The
restaurant operating margin in this year's second quarter was 13.3
percent, which compares with 11.8 percent in the prior year's
second quarter, primarily as a result of higher sales, lower
pension costs, and relatively fixed operating costs being spread
over higher sales, offset partly by higher beef costs.
At the Corporate level, administrative expense increased 30.2
percent in second quarter 2015 over last year's second quarter, the
result of the $232,000 charge to
correct certain balance sheet accounts, higher fees for legal
services, higher advertising costs and compensation
accruals.
Craig F. Maier, President and
Chief Executive Officer, said, "Our second quarter showed solid
operating results and good cash flows. Customer counts and
same store sales both showed nice growth with the introduction of
new menu items combined with good growth in our drive-thru
business. As previously disclosed in an earlier news release,
shortly after our second quarter ended on December 16 we discovered that embezzlement had
occurred over a multi-year period. The discovery and a
forensic investigation of the embezzlement resulted in a delayed
filing of our second quarter 2015 10Q with the Securities Exchange
Commission (SEC). That delayed 10Q is now being filed with the SEC
concurrently with this announcement. Readers should refer to
that 10Q for additional information about the embezzlement's impact
on our Company."
Frisch's Restaurants, Inc. is a regional company that
operates full service family-style restaurants under the name
"Frisch's Big Boy." All Frisch's 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 Frisch's Big Boy restaurants to other
operators, currently in certain parts of Ohio, Kentucky and Indiana.
The Company currently operates 95 company-owned Frisch's Big Boy
restaurants and there are an additional 26 franchised Frisch's Big
Boy restaurants that are 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 news 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.
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SOURCE Frisch's Restaurants, Inc.