CINCINNATI, April 2, 2014 /PRNewswire/ -- Frisch's
Restaurants, Inc. (NYSE MKT: FRS) reported revenue of $45,160,998 during its fiscal 2014 third quarter
ended March 4, 2014 (consisting of 12
weeks), a 1.3 percent decline from the $45,771,994 reported in the prior year's third
quarter. Net earnings decreased 9.3 percent in the third
quarter to $1,584,796 ($0.31 diluted earnings per share (EPS)) down from
$1,747,850 ($0.34 diluted EPS) in the comparable quarter last
year. The decrease in earnings was due to lower gross
profit, resulting from a weather related sales decline, favorably
offset, in part, by a lower effective tax rate and the recognition
of certain discrete tax benefits.
Year-to-date revenue was $155,614,358 versus $154,919,802 in the prior year, a 0.5 percent
increase, and year-to-date net earnings grew 28.9 percent to
$5,860,862 ($1.15 diluted EPS) from $4,548,521, ($0.90
diluted EPS) in the prior year. (Prior year net earnings included a
small charge against income tax from discontinued operations.)
Same store sales decreased 3.6 percent in the third quarter of
fiscal 2014 while overall sales decreased at a lower rate of 1.3
percent from the third quarter of fiscal 2013 reflecting the
addition of two new restaurant openings. Gross profit margin
of 7.9 percent decreased from 10.9 percent in the prior year's
third quarter, primarily as a result of lower sales volume and
higher health care costs offset partly by lower pension
costs. At the Corporate level, administrative expense
increased 5.6 percent in third quarter 2014 primarily as a result
of higher consulting fees.
The effective tax rate was a benefit of 14.1 percent in the
quarter compared to expense of 26.2 percent in last year's third
quarter. The recognition of a tax rate benefit in this year's
third quarter is due to the combination of much lower pretax
earnings and the incorporation of anticipated tax benefits
associated with the federal Domestic Production Activities
Deduction (DPAD). Income tax benefits were also recognized
in this year's third quarter on a discrete basis for DPAD tax
benefits not claimed in prior years and the release of a valuation
allowance on certain deferred state tax assets.
Craig F. Maier, President and
Chief Executive Officer, said, "Our third quarter was a struggle as
our sales volume was negatively impacted by relentless severe
weather events in our market areas which adversely reduced our
customer counts. We were able to partially offset the impact
of the decline in customer counts with the addition of new stores
combined with modest price increases. On a positive note, we
saw a 2.9 percent increase in the quarter in our drive-thru
business driven by new ordering equipment and a focus on fast
service. Lower revenues in the quarter along with higher health
care costs and costs driven by the adverse weather resulted in
significantly lower gross profit. As we look forward to our
fourth quarter, we believe our customer traffic will return to more
normal trends."
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 96 company-owned Frisch's Big Boy
restaurants and there are an additional 25 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.
[See attached financial summary]
Frisch's Restaurants,
Inc. and Subsidiaries
|
CONDENSED
CONSOLIDATED STATEMENT OF EARNINGS (unaudited)
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
40 weeks
ended
|
|
12 weeks
ended
|
|
|
March 4,
|
|
March 5,
|
|
March 4,
|
|
March 5,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Sales
|
$ 155,614
|
|
$ 154,920
|
|
$
45,161
|
|
$
45,772
|
Cost of
sales
|
|
|
|
|
|
|
|
|
Food and
paper
|
51,866
|
|
51,857
|
|
15,163
|
|
15,422
|
|
Payroll and
related
|
55,399
|
|
54,367
|
|
16,679
|
|
16,281
|
|
Other operating
costs
|
32,745
|
|
31,961
|
|
9,752
|
|
9,102
|
|
|
140,010
|
|
138,185
|
|
41,594
|
|
40,805
|
Gross
profit
|
15,604
|
|
16,735
|
|
3,567
|
|
4,967
|
|
Administrative and
advertising
|
9,443
|
|
10,109
|
|
2,846
|
|
2,695
|
|
Franchise fees and
other revenue
|
(1,076)
|
|
(1,057)
|
|
(293)
|
|
(306)
|
|
(Gain) Loss on sale
of assets
|
(67)
|
|
14
|
|
-
|
|
-
|
|
Impairment of long
lived assets
|
-
|
|
71
|
|
-
|
|
-
|
Operating
profit
|
7,304
|
|
7,598
|
|
1,014
|
|
2,578
|
|
Interest
expense
|
471
|
|
759
|
|
120
|
|
209
|
Earnings from
continuing operations before income taxes
|
6,833
|
|
6,839
|
|
894
|
|
2,369
|
Income
taxes
|
972
|
|
2,133
|
|
(691)
|
|
621
|
Earnings from
continuing operations
|
5,861
|
|
4,706
|
|
1,585
|
|
1,748
|
(Loss) from
discontinued operations, net of tax
|
-
|
|
(158)
|
|
-
|
|
-
|
NET
EARNINGS
|
$
5,861
|
|
$
4,548
|
|
$
1,585
|
|
$
1,748
|
|
|
|
|
|
|
|
|
|
Earnings per share
(EPS) of common stock:
|
|
|
|
|
|
|
|
|
Basic net earnings
per share:
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
1.15
|
|
$
0.94
|
|
$
0.31
|
|
$
0.35
|
|
(Loss) from
discontinued operations
|
-
|
|
(0.03)
|
|
-
|
|
-
|
|
Basic net earnings
per share
|
$
1.15
|
|
$
0.91
|
|
$
0.31
|
|
$
0.35
|
|
Diluted net earnings
per share:
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
1.15
|
|
$
0.94
|
|
$
0.31
|
|
$
0.34
|
|
(Loss) from
discontinued operations
|
-
|
|
(0.03)
|
|
-
|
|
-
|
|
Diluted net earnings
per share
|
$
1.15
|
|
$
0.91
|
|
$
0.31
|
|
$
0.34
|
Diluted average
shares outstanding
|
5,097
|
|
5,039
|
|
5,111
|
|
5,073
|
Depreciation included
above
|
$
8,160
|
|
$
7,936
|
|
$
2,497
|
|
$
2,402
|
Opening expense
included above
|
$
307
|
|
$
461
|
|
$
119
|
|
$
183
|
|
|
|
|
|
|
|
|
|
Frisch's Restaurants,
Inc. and Subsidiaries
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
(In thousands of
dollars)
|
|
|
|
March 4,
|
|
May 28,
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and
equivalents
|
$
1,796
|
|
$
4,256
|
|
|
|
Receivables
|
1,460
|
|
1,297
|
|
|
|
Inventories
|
6,403
|
|
5,765
|
|
|
|
Other current
assets
|
2,639
|
|
3,103
|
|
|
|
|
12,298
|
|
14,421
|
|
|
Property and
equipment
|
105,624
|
|
102,145
|
|
|
Other
assets
|
|
|
|
|
|
|
Goodwill & other
intangible assets
|
773
|
|
775
|
|
|
|
Property held for
sale and land investments
|
7,637
|
|
8,405
|
|
|
|
Deferred income taxes
and other
|
4,754
|
|
2,966
|
|
|
|
|
13,164
|
|
12,146
|
|
|
|
|
|
|
|
|
|
|
|
$
131,086
|
|
$
128,712
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
$
7,955
|
|
$
5,879
|
|
|
|
Accrued
expenses
|
7,555
|
|
8,025
|
|
|
|
Other
|
2,746
|
|
5,357
|
|
|
|
|
18,256
|
|
19,261
|
|
|
|
|
|
|
|
|
|
Long-term
obligations
|
|
|
|
|
|
|
Long-term
debt
|
8,409
|
|
9,600
|
|
|
|
Other long-term
obligations
|
16,532
|
|
16,195
|
|
|
|
|
24,941
|
|
25,795
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
87,889
|
|
83,656
|
|
|
|
|
|
|
|
|
|
|
|
$
131,086
|
|
$
128,712
|
|
SOURCE Frisch's Restaurants, Inc.