CINCINNATI, April 10 /PRNewswire-FirstCall/ -- Frisch's Restaurants, Inc. (AMEX:FRS) reported lower sales for its 12-week fiscal third quarter ended March 6, 2007. Revenues declined 2.7% to $65,451,505 from $67,259,863 for last year's third quarter. Net earnings for the quarter declined 13.2% to $1,914,997 compared to $2,205,698 last year. Diluted earnings per share decreased to $.37 per share, from $.43 per share last year. Last year's third quarter included the benefit of a $394,000 pretax gain from the disposal of property, which added $.05 per share.
For the first three quarters of fiscal 2007, revenue rose 0.6% to $221,968,379 from $220,745,741 for the same period last year. Earnings increased 7.8% to $6,995,223 from $6,490,500. Diluted earnings per share rose to $1.35 from $1.26 last year.
Craig F. Maier, President and Chief Executive Officer, said, "Same store sales at our Big Boy Restaurants decreased 0.8% in the third quarter. Mild weather during the first several weeks of the quarter eventually turned to the inclement winter conditions that we are more accustomed to in our markets. The impact of the snow and ice more than erased the sales gains we saw in December and early January, severely affecting our operating results. To still be ahead in same store sales on a year to date basis is actually quite an achievement." Maier added, "The harsh weather also impacted our Golden Corral restaurants as they posted a same store sales decline of 5.8% during the third quarter. We look forward to renewed sales strength as we enter the spring." The lower earnings for the quarter can be attributed to lower sales driven by the winter weather. On a positive note, even though Golden Corral experienced lower same store sales, lower food cost and payroll expenses led to modest earnings in the Golden Corral restaurants.
During the quarter, there were no new Big Boy or Golden Corral restaurants opened. An older Big Boy was closed in Cincinnati. Also during the quarter, construction began on a new Big Boy restaurant in the Dayton, Ohio market. Frisch's operates 34 Golden Corral restaurants and 89 company-owned Big Boy restaurants, and there are an additional 28 franchised Big Boy restaurants operated by licensees.
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 (unaudited)
(In thousands, except per share data) Forty weeks ended Twelve weeks ended
March 6, March 5, March 6, March 5,
2007 2006 2007 2006 Sales $221,968 $220,746 $65,452 $67,260
Cost of sales
Food and paper 77,214 77,317 22,824 23,703
Payroll and related 73,403 72,970 21,911 22,218
Other operating costs 48,745 48,716 13,987 14,787
199,362 199,003 58,722 60,708
Gross profit 22,606 21,743 6,730 6,552
Administrative and advertising 11,177 11,158 3,488 3,235
Franchise fees and other
revenue (965) (960) (276) (298)
(Gains) losses on sale of
assets (250) (394) - (394)
Operating profit 12,644 11,939 3,518 4,009
Interest expense 2,046 2,104 617 665
Earnings before income tax 10,598 9,835 2,901 3,344
Income taxes 3,603 3,344 986 1,138
NET EARNINGS $6,995 $6,491 $1,915 $2,206 Earnings per share (EPS) of common
stock:
Basic net earnings per share $1.38 $1.28 $.38 $.43
Diluted net earnings per share $1.35 $1.26 $.37 $.43
Diluted average shares outstanding 5,193 5,161 5,235 5,160
Depreciation included above $10,413 $9,886 $3,249 $3,025
Opening expense included above $241 $1,380 $- $249 Frisch's Restaurants, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET
(In thousands of dollars) March 6, May 30,
2007 2006
(unaudited)
Assets
Current assets
Cash and equivalents $389 $815
Receivables 1,861 1,538
Inventories 5,486 4,792
Other current assets 4,976 4,918
12,712 12,063
Property and equipment 157,147 154,370
Other assets
Goodwill & other intangible assets 2,070 2,125
Property held for sale and land
investments 3,411 3,078
Other 2,843 3,647
8,324 8,850 $178,183 $175,283 Liabilities and shareholders' equity
Current liabilities
Accounts payable $10,268 $10,330
Accrued expenses 9,295 9,640
Other 14,528 10,613
34,091 30,583 Long-term obligations
Long-term debt 26,880 30,992
Other long-term obligations 10,322 13,027
37,202 44,019 Shareholders' equity 106,890 100,681 $178,183 $175,283
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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