Frisch's Reports Annual and Fourth Quarter Fiscal 2015 Results

Aug 14, 2015, 09:00 ET from Frisch's Restaurants, Inc.

CINCINNATI, Aug. 14, 2015 /PRNewswire/ -- Frisch's Restaurants, Inc. (NYSE MKT: FRS) reported revenue of $211,893,000 for the fiscal year ended June 2, 2015 (fiscal 2015, a 52 week period), representing a $2,720,000 or 1.3 percent increase over the prior fiscal year (fiscal 2014, a 53 week period).  Net earnings for the year increased $483,000 or 5.1 percent to $9,955,000 ($1.94 diluted earnings per share) compared to $9,472,000 ($1.86 diluted earnings per share) last year.

The additional week in fiscal 2014 contributed $3,963,000 to revenue in fiscal 2014, which yielded an estimated $737,000 in pretax earnings.  Excluding the impact of the extra week in fiscal 2014, revenues in fiscal 2015 increased $6,683,000 or 3.3 percent and pretax earnings increased $3,414,000 or 35.6 percent.  Net earnings for fiscal year 2014 also received the benefit of a much lower effective tax rate, which resulted from certain tax planning strategies.

For the fourth quarter of fiscal 2015 (12 weeks), revenue decreased $3,338,000 or 6.2 percent to $50,221,000 from $53,559,000 in the fourth quarter of fiscal 2014 (13 weeks).  The decrease was due the effect of last year's extra week.  Net earnings decreased $1,022,000 or 28.8 percent in the fourth quarter of fiscal 2015 to $2,530,000 ($0.50 diluted earnings per share) compared to $3,552,000 ($0.70 diluted earnings per share) in the fourth quarter of fiscal 2014, which consisted of 13 weeks.

Disregarding the impact of the extra week in the prior year's fourth quarter as discussed above, fourth quarter revenues increased $625,000 or 1.3 percent and pretax earnings increased $427,000 or 16.0 percent. Same store sales increased 2.5 percent in the fourth quarter of fiscal 2015 compared to the fourth quarter of the prior year.

The margin from restaurant operating income in the fourth quarter of fiscal 2015 improved to 14.5 percent from 11.7 percent in the prior year on lower food costs, payroll and health care costs. Administrative and advertising expense, a component of operating income, increased over $1,250,000 from the incurrence of professional fees associated with the announced sale of the Company.

Craig F. Maier, President and Chief Executive Officer, said, "Our restaurants had an excellent year and achieved especially strong results in the fourth quarter.  We appreciate all the hard work of our people who made these results possible.  It is a further testament to their achievements that the Company reported a profit every year since going public in 1960, which allowed the Company to pay a cash dividend to our shareholders every quarter over that 55 year period."

As previously announced on May 21, 2015, the Company and NRD Partners I, L.P., a private equity fund, entered into an agreement pursuant to which an affiliate of NRD Partners I, L.P. will acquire all of the outstanding shares of Frisch's Restaurants, Inc. for $34.00 per share in cash, or approximately $175 million. A special meeting of shareholders to approve the sale is scheduled for August 24, 2015 with the closing of the transaction subsequent to the meeting if shareholder approval is obtained.

Frisch's Restaurants, Inc. is a regional company that operates full service family-style restaurants under the name "Frisch's Big Boy."  All Frisch's 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 Frisch's Big Boy restaurants to other operators, currently in certain parts of Ohio, Kentucky and Indiana.

During the fiscal year ended June 2, 2015, the Company opened no new stores. At this time, the Company has not scheduled any new restaurant construction. A Frisch's Big Boy restaurant located in Columbus, Ohio was closed permanently in July 2014.  The Company currently operates 95 company-owned Frisch's Big Boy restaurants and there are an additional 26 franchised Frisch's Big Boy restaurants that are operated by licensees.

Statements contained in this news 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


CONDENSED CONSOLIDATED STATEMENT OF EARNINGS 


(In thousands, except per share data)








(Unaudited)




52 weeks ended


53 weeks ended


12 weeks ended


13 weeks ended




June 2,


June 3,


June 2,


June 3,




2015


2014


2015


2014












Sales

$        211,893


$        209,173


$          50,221


$          53,559


Cost of sales










Food and paper

70,536


70,088


15,940


18,222



Payroll and related

72,986


74,236


17,207


18,837



Other operating costs

42,091


42,973


9,797


10,228




185,613


187,297


42,944


47,287


Restaurant operating income

26,280


21,876


7,277


6,272



Administrative and advertising

16,725


12,539


4,437


3,186



Franchise fees and other revenue, net

(1,471)


(1,439)


(335)


(363)



(Gain) loss on sale of real property

(2,999)


(135)


4


(68)



Impairment of long-lived assets

653


-


-


-


Operating income

13,372


10,911


3,171


3,517



Interest expense

370


586


80


116


Earnings before income taxes

13,002


10,325


3,091


3,401


Income tax (benefits)

3,047


853


561


(151)


NET EARNINGS

$           9,955


$           9,472


$           2,530


$           3,552












Earnings per share (EPS) of common stock:









Basic net earnings per share

$1.94


$1.86


$.49


$.70



Diluted net earnings per share

$1.94


$1.86


$.50


$.70


Diluted average shares outstanding

5,138


5,101


5,147


5,113


Depreciation included above

$          10,427


$          10,721


$           2,410


$           2,561












         

Frisch's Restaurants, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)





June 2,


June 3,





2015


2014


Assets






Current assets







Cash and equivalents

$       4,959


$       1,124




Trade and other accounts receivable

2,218


1,900




Inventories

6,267


5,637




Other current assets

3,375


4,653





16,819


13,314










Net property and equipment

101,360


104,862










Other assets







Goodwill and other intangible assets

770


773




Real property not used in operations

6,029


6,744




Other

4,033


3,261





10,832


10,778









Total assets

$   129,011


$   128,954









Liabilities and shareholders' equity






Current liabilities







Long-term debt, current maturities

$             -


$       1,996




Accounts payable

6,248


7,594




Accrued expenses

11,536


9,319





17,784


18,909










Long-term obligations







Long-term debt, less current maturities

-


4,737




Other long-term obligations

11,217


12,055





11,217


16,792










Shareholders' equity

100,010


93,253









Total liabilities and shareholders' equity

$   129,011


$   128,954









 

SOURCE Frisch's Restaurants, Inc.



RELATED LINKS

http://www.frischs.com