Attached files

file filename
8-K - CURRENT REPORT - FRISCHS RESTAURANTS INCv332277_8k.htm

Exhibit 99.1

 

Company Contact:
    Mark R. Lanning
    Vice President-Finance and CFO  
    Frisch’s Restaurants, Inc.
    2800 Gilbert Avenue 
    Cincinnati, OH  45206
      (513) 559-5200
    www.frischs.com
  investor.relations@frischs.com

 

Frisch’s Reports Second Quarter Fiscal 2013 Results

 

CINCINNATI, Ohio — January 16, 2013 — 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