Meritage Reports Third Quarter 2011 Results
Oct 21, 2011
OTC Disclosure News Service
Grand Rapids, MI –
GRAND RAPIDS, Michigan, October 21, 2011. Meritage Hospitality Group Inc. (OTCQX: MHGU), the nation’s premier franchise operator, today reported financial results for the quarter ended October 2, 2011.
“We remain on target with our five-year growth and operating plans. In the Wendy’s system we have experienced disappointing restaurant margins in 2011, driven by record high beef costs during the second and third quarters. Our beef costs for the fourth quarter are expected to moderate, although we are planning on extreme volatility for the next several years, until there are long-term structural changes in the U.S. cattle herd,” stated Robert E. Schermer, Jr., Chief Executive Officer. “On a positive note, our Wendy’s restaurant sales remain strong, driven by acquisitions, remodeling, and new store development. The Company-owned Twisted Rooster casual dining concept, with three locations, continues to perform well.”
Third Quarter 2011 Highlights
· Sales increased 18.4% to $24.2 million compared to $20.4 million for the same period last year.
· Income from Operations increased 33.6% to $733,000 compared to $549,000 for the same period last year.
· Net Income was $347,000 compared to $469,000 for the same period last year.
· Consolidated EBITDA (a non GAAP measure) increased 1.7% to $932,000 compared to $916,000 for the same period last year.
· The Company declared its 32nd consecutive quarterly dividend on its Series B Cumulative Convertible Preferred Stock of $0.20 per share, which was payable on October 1, 2011 to shareholders of record as of September 15, 2011.
· The Company’s Twisted Rooster restaurant group generated Income from Operations of $173,000 compared to a loss of $149,000 for the same period last year.
Year-to-Date 2011 Highlights
· Sales for the nine months ended October 2, 2011 increased 15.1% to $68.2 million compared to sales of $59.2 million for the same period last year.
· Income from Operations was $1,840,000 compared to $1,914,000 for the same period last year. The current period included $786,000 of charges related to pre-opening and acquisition expenses, and discontinued operation expenses – a one-time charge.
· Net Income was $927,000 compared to $1,863,000 for the same period last year.
· Consolidated EBITDA (a non-GAAP measure) was $2.6 million in 2011 compared to $3.1 million in 2010.
The Company is extremely encouraged about the long-term outlook for the Wendy’s brand with the re-union of its new CEO, Emil Brolick. Emil Brolick (from Grand Haven, Michigan) is the fourth CEO in the past nine years since iconic Founder Dave Thomas passed away. Emil worked at Wendy’s with Dave Thomas prior to leaving to become President of rival Taco Bell, and then COO at Taco Bell parent YUM Brands. Emil Brolick is looking to re-establish Wendy’s niche as the premium player in QSR.
Meritage is one of the nation’s premier franchise operators, currently operating 89 quick service and casual dining restaurants. The Company specializes in the development and operation of restaurant and leisure properties. The Company is headquartered in Grand Rapids and employs a workforce of approximately 2,700. The Company seeks unique opportunities to capitalize on its substantial development and operating expertise. The Company’s public filings can be viewed at www.otcqx.com, under the stock symbol MHGU, or the Company’s website
SAFE HARBOR STATEMENT
Certain information in this new release, particularly information regarding future economic performance and finances, and plans, expectations and objectives of management, constitutes forward-looking statements. Factors set forth in our Safe Harbor Statement, in addition to other possible factors not listed, could affect the Company’s actual results and cause such results to differ materially from those expressed in forward-looking statements. Please review the Company’s Safe Harbor Statement at http://www.meritagehospitality.com.
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