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8-K - 8-K - FRISCHS RESTAURANTS INC | d386190d8k.htm |
Exhibit 99.1
Company Contact:
Mark R. Lanning
Vice President-Finance and CFO
Frischs Restaurants, Inc.
2800 Gilbert Avenue
Cincinnati, OH 45206
(513) 559-5200
www.frischs.com
investor.relations@frischs.com
Frischs Reports Fourth Quarter and
Fiscal 2012 Results
CINCINNATI, Ohio July 25, 2012 Frischs Restaurants, Inc. (NYSE MKT: FRS) reported revenue from continuing operations of $205,082,827 for the fiscal year ended May 29, 2012, with those revenues rising $3,365,931, or 1.7%, from $201,716,896 in the prior year. Net earnings from continuing operations for the year declined 18.3% to $5,801,540 compared to $7,104,556 last year. Diluted earnings per share from continuing operations decreased to $1.17 per share, from $1.40 per share last year. The decline in earnings from continuing operations in contrast to the revenue increase resulted in part from the fourth quarter impairment of a Big Boy location which is being closed.
On May 16, 2012, the Company closed on the sale of its Golden Corral restaurant operations to Golden Corral Corporation, consisting of the assets of 29 restaurants. The Company recorded a pretax loss on the sale of $5,590,000 ($5,256,000 in the fourth quarter) during the year ended May 29, 2012. 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 recorded in the first quarter 2012. Additional pre-tax impairment charges on the six closed stores were taken in the third quarter ($94,000) and the fourth quarter ($294,000) totaling ($388,000). The results of operations of Golden Corral, along with the above described loss on the sale and the impairment charges, are presented as discontinued operations in the consolidated financial statements. The loss from discontinued operations, net of tax, was ($3,653,329) for the fiscal year ended May 29, 2012 versus earnings of $2,368,033 in the prior year.
For the fourth quarter of fiscal 2012, revenue from continuing operations was essentially flat at $47,499,363 versus $47,835,560 in the prior year. Earnings from continuing operations in the fourth quarter were $1,566,470 compared to $1,798,949 in the prior year. The fourth quarter of fiscal 2012 includes credits to income tax expense to reflect the actual effective tax rate for the year.
Craig F. Maier, President and Chief Executive Officer, commented on the results, We completed a momentous year on a high note with the completion of the sale of our Golden Corral business. We believe this restructuring of our business will contribute to enhanced value for our shareholders. In addition, our Big Boy concept continues to generate solid profits and cash flow as we move into our new fiscal year.
The company opened one new Big Boy restaurant in July 2011, in our first quarter and a second restaurant in October in our second quarter. For the fiscal year we closed four Big Boy units. Frischs currently operates 93 company-owned Big Boy restaurants and there are an additional 25 franchised Big Boy restaurants operated by licensees.
[See attached Financial Statements]
Frischs Restaurants, Inc. is a regional company that operates full service family-style restaurants under the name Frischs Big Boy. All Big Boy restaurants are currently located in various regions of Ohio, Kentucky and Indiana.
The company owns the trademark Frischs 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 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.
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Frischs Restaurants, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share data)
Year ended | (unaudited) Quarter ended |
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May 29, 2012 |
May 31, 2011 |
May 29, 2012 |
May 31, 2011 |
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Sales |
$ | 205,083 | $ | 201,717 | $ | 47,500 | $ | 47,836 | ||||||||
Cost of sales |
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Food and paper |
69,042 | 66,349 | 15,817 | 16,186 | ||||||||||||
Payroll and related |
72,370 | 71,491 | 16,619 | 16,757 | ||||||||||||
Other operating costs |
42,156 | 41,241 | 9,472 | 9,709 | ||||||||||||
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183,568 | 179,081 | 41,908 | 42,652 | |||||||||||||
Gross profit |
21,515 | 22,636 | 5,592 | 5,184 | ||||||||||||
Administrative and advertising |
13,379 | 12,517 | 3,049 | 2,603 | ||||||||||||
Franchise fees and other revenue |
(1,322 | ) | (1,324 | ) | (328 | ) | (319 | ) | ||||||||
(Gain) loss on sale of assets |
(200 | ) | 40 | (9 | ) | 40 | ||||||||||
Impairment of long lived assets |
1,229 | | 901 | | ||||||||||||
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Operating profit |
8,429 | 11,403 | 1,979 | 2,860 | ||||||||||||
Interest expense |
1,414 | 1,582 | 278 | 355 | ||||||||||||
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Earnings from continuing operations before income taxes |
7,015 | 9,821 | 1,701 | 2,505 | ||||||||||||
Income taxes |
1,214 | 2,716 | 135 | (1) | 706 | |||||||||||
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Earnings from continuing operations |
5,801 | 7,105 | 1,566 | 1,799 | ||||||||||||
(Loss) earnings from discontinued operations, net of tax |
(3,653 | ) | 2,368 | (2,745 | )(1) | 592 | ||||||||||
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NET (LOSS) EARNINGS |
$ | 2,148 | $ | 9,473 | $ | (1,179 | ) | $ | 2,391 | |||||||
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Earnings per share (EPS) of common stock: |
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Basic net earnings per share: |
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Earnings from continuing operations |
$ | 1.18 | $ | 1.41 | $ | 0.32 | $ | 0.36 | ||||||||
(Loss) earnings from discontinued operations |
$ | (0.74 | ) | $ | 0.47 | $ | (0.56 | ) | $ | 0.12 | ||||||
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Basic net (loss) earnings per share |
$ | 0.44 | $ | 1.88 | $ | (0.24 | ) | $ | 0.48 | |||||||
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Diluted net earnings per share: |
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Earnings from continuing operations |
$ | 1.17 | $ | 1.40 | $ | 0.31 | $ | 0.36 | ||||||||
(Loss) earnings from discontinued operations |
$ | (0.74 | ) | $ | 0.47 | $ | (0.55 | ) | $ | 0.12 | ||||||
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Diluted net (loss) earnings per share |
$ | 0.43 | $ | 1.87 | $ | (0.24 | ) | $ | 0.48 | |||||||
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Diluted average shares outstanding |
4,952 | 5,068 | 4,986 | 4,979 | ||||||||||||
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Depreciation included in continuing operations |
$ | 10,273 | $ | 9,933 | $ | 2,424 | $ | 2,373 | ||||||||
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Opening expense included in continuing operations |
$ | 398 | $ | 1,073 | $ | | $ | 91 | ||||||||
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(1) | The fourth quarter of fiscal 2012 includes credits to income tax expense to reflect the actual effective tax rate for the year, which was impacted by an impairment and other charges. |
Frischs Restaurants, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET
(In thousands of dollars)
May 29, 2012 |
May 31, 2011 |
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Assets |
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Current assets |
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Cash and equivalents |
$ | 49,455 | $ | 2,316 | ||||
Receivables |
1,683 | 1,997 | ||||||
Inventories |
5,590 | 4,940 | ||||||
Other current assets |
3,010 | 4,372 | ||||||
Current assets of discontinued operations |
190 | 1,235 | ||||||
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59,928 | 14,860 | |||||||
Property and equipment |
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Net property and equipment of continuing operations |
102,139 | 106,657 | ||||||
Property and equipment assets of discontinued operations |
| 66,265 | ||||||
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102,139 | 172,922 | |||||||
Other assets |
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Goodwill & other intangible assets |
777 | 792 | ||||||
Property held for sale and land investments |
11,484 | 3,845 | ||||||
Deferred income taxes and other |
5,641 | 3,163 | ||||||
Other assets of discontinued operations |
| 445 | ||||||
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17,902 | 8,245 | |||||||
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$ | 179,969 | $ | 196,027 | |||||
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Liabilities and shareholders equity |
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Current liabilities |
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Accounts payable |
$ | 6,293 | $ | 10,035 | ||||
Accrued expenses |
7,342 | 8,779 | ||||||
Other |
7,857 | 8,801 | ||||||
Current liabilities of discontinued operations |
683 | 1,485 | ||||||
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22,175 | 29,100 | |||||||
Long-term obligations |
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Long-term debt |
14,446 | 22,573 | ||||||
Other long-term obligations |
21,623 | 15,459 | ||||||
Long term obligations of discontinued operations |
| 3,367 | ||||||
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36,069 | 41,399 | |||||||
Shareholders equity |
121,725 | 125,528 | ||||||
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$ | 179,969 | $ | 196,027 | |||||
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