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CINCINNATI, Jan. 20 /PRNewswire-FirstCall/ -- Frischs Restaurants, Inc.
(Amex: FRS) reported record sales for the 12-week second quarter ended
December 11, 2005. Revenues rose .3% to $66,953,103 from $66,747,477 for last
years second quarter. Earnings for the quarter declined 40% to $1,682,771
compared to $2,785,987 last year. Diluted earnings per share decreased to
$.33 per share from $.54 per share last year.
For the first half of the fiscal year, revenue rose 1.8% to $153,485,878
from $150,809,640 for the first half of last year. Earnings declined 25.4% to
$4,284,802 from $5,740,906. Diluted earnings per share were $.83 for the first
half of fiscal 2006 versus $1.11 per share last year.
Craig F. Maier, President and Chief Executive Officer, said, "Same store
sales in the second quarter at our Big Boy restaurants decreased 1.8%, and
they fell 1.2% during the first half of the year. We have now had three
straight quarters of slight declines in our Big Boy same store sales. We
believe that sharply higher energy prices and the soft Midwest economy have
had a big impact on our sales.
"Same store sales for our Golden Corral restaurants declined 10.7% for the
quarter and 10.5% year to date. The quarterly decline is the ninth
consecutive decrease for our Golden Corral restaurants. To combat these
declines, we have implemented a new marketing strategy that highlights a
different dinner theme each night of the week. Further, we believe
operational execution at our restaurants needs improvement, so we are going
back to fundamentals. We now have thirty-four Golden Corrals in operation."
Lower earnings in the quarter and first half can be attributed primarily
to the same store sales declines, and also to higher operating expenses.
Net earnings for the second quarter and first half of last year have been
restated for amounts the Company deems immaterial resulting from an error in
the actuarial determination of pension cost that overstated the pension
expense reported in prior years.
Frischs Restaurants, Inc. is a regional company that operates full
service family-style restaurants under the name "Frischs 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 "Frischs" 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 Frischs 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 Companys filings with the Securities and Exchange Commission.
Frischs Restaurants, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share data)
Twenty-eight weeks ended Twelve weeks ended
Dec. 11, Dec. 12, Dec. 11, Dec. 12,
2005 2004 2005 2004
(restated) (restated)
Sales $153,486 $150,810 $66,953 $66,747
Cost of sales
Food and paper 53,615 52,753 23,510 23,338
Payroll and related 50,752 50,043 22,200 22,136
Other operating costs 33,928 30,758 15,042 13,204
138,295 133,554 60,752 58,678
Gross profit 15,191 17,256 6,201 8,069
Administrative and
advertising 7,923 7,665 3,342 3,341
Franchise fees and other
revenue (662) (733) (290) (311)
(Gains) losses on sale
of assets - (89) - (89)
Operating profit 7,930 10,413 3,149 5,128
Interest expense 1,439 1,447 657 640
Earnings before income tax 6,491 8,966 2,492 4,488
Income taxes 2,206 3,225 809 1,702
NET EARNINGS 4,285 5,741 1,683 2,786
Earnings per share (EPS)
of common stock:
Basic net earnings per
share $.85 $1.14 $.33 $.55
Diluted net earnings per
share $.83 $1.11 $.33 $.54
Diluted average shares
outstanding 5,162 5,153 5,162 5,144
Depreciation included
above $6,861 $6,230 $3,014 $2,741
Opening expense included
above $1,131 $1,050 $370 $327
Frischs Restaurants, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET
(In thousands of dollars)
Dec. 11, May 29,
2005 2005
(Note)
(unaudited) (restated)
Assets
Current assets
Cash and equivalents $323 $306
Receivables 1,733 1,390
Inventories 4,654 4,592
Other current assets 4,022 3,762
10,732 10,050
Property and equipment 155,912 148,202
Other assets
Goodwill & other intangible assets 2,181 2,141
Property held for sale and land
investments 2,864 2,832
Other 4,209 4,240
9,254 9,213
$175,898 $167,465
Liabilities and shareholders equity
Current liabilities
Accounts payable $14,723 $12,799
Accrued expenses 8,908 8,764
Other 10,299 9,399
33,930 30,962
Long-term obligations
Long-term debt 32,424 29,570
Other long-term obligations 13,180 13,532
45,604 43,102
Shareholders equity 96,364 93,401
$175,898 $167,465
Note: The balance sheet at May 29, 2005 was derived from the audited
consolidated financial statements at that date. Certain amounts, however,
have been restated to correct an error in actuarial pension calculations.
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