Frisch's Reports Second Quarter Fiscal 2014 Results

CINCINNATI, Jan. 8, 2014 /PRNewswire/ -- Frisch's Restaurants, Inc. (NYSE MKT: FRS) reported revenue of $49,216,739 during its fiscal 2014 second quarter ended December 10, 2013 (consisting of 12 weeks), a 1.4 percent increase over the $48,522,512 reported in the prior year's second quarter.  Net earnings increased 18.2 percent in the second quarter to $2,364,019 ($0.46 diluted earnings per share (EPS)) up from $2,000,384 ($0.39 diluted EPS) in the comparable quarter last year.   The increase in earnings was due to the benefits of lower administrative expense, lower interest expense and a lower effective tax rate offset partly by a lower gross profit margin. Year-to-date revenue was $110,453,360 versus $109,147,808 in the prior year, a 1.2 percent increase, and year-to-date net earnings grew 52.7 percent to $4,276,066 ($0.84 diluted EPS) from $2,800,672, ($0.56 diluted EPS) in the prior year. (Prior year earnings included a small charge against income tax from discontinued operations.)

Same store sales were essentially flat in the second quarter of fiscal 2014 while overall sales increased 1.4 percent over the second quarter of fiscal 2013 as a result of two new restaurant openings.  Gross profit margin of 11.8 percent decreased from 12.3 percent in the prior year's second quarter, primarily as a result of higher new store opening costs and higher payroll costs offset partly by lower pension costs and improved efficiency in our commissary operations. 

At the Corporate level, administrative expense decreased 6.3 percent in second quarter 2014 primarily as a result lower head-count, lower stock compensation expense, and lower pension expense than last year's second quarter.  The effective tax rate decreased to 26.3 percent in the quarter compared to 34.7 percent in last year's second quarter due to changes in deferred taxes and last year's placement of a valuation allowance on certain deferred tax assets.  Franchise fees and other revenue increased in second quarter 2014 versus second quarter 2013 due to the granting of a new license to a franchisee in the quarter. 

Craig F. Maier, President and Chief Executive Officer, said, "Our second quarter showed good results despite lower customer counts.  We continue to counter softness in customer counts with the introduction of new menu items combined with an emphasis on growing our drive-thru service with new equipment and fast service. The modest revenue increase combined with good cost control measures, including head-count reductions, drove our double-digit increase in earnings.  Beginning in our third quarter, we are looking forward to offering an enhanced line of soft drinks with the introduction of Pepsi products in all of our units."

*************************

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.

The Company currently operates 96 company-owned Frisch's Big Boy restaurants and there are an additional 25 franchised Frisch's Big Boy restaurants that are 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 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 (unaudited)


(In thousands, except per share data)














28 weeks ended


12 weeks ended




Dec. 10,


Dec. 11,


Dec. 10,


Dec. 11,




2013


2012


2013


2012












Sales

$      110,453


$     109,148


$        49,217


$           48,523


Cost of sales










Food and paper

36,703


36,435


16,353


16,159



Payroll and related

38,720


38,086


17,087


16,634



Other operating costs

22,993


22,859


9,962


9,736




98,416


97,380


43,402


42,529


Gross profit

12,037


11,768


5,815


5,994



Administrative and advertising

6,597


7,413


2,831


3,023



Franchise fees and other revenue

(782)


(751)


(358)


(322)



(Gain) loss on sale of assets

(67)


14


-


2



Impairment of long lived assets

-


71


-


-


Operating profit 

6,289


5,021


3,342


3,291



Interest expense

350


550


135


229


Earnings from continuing operations before income taxes

5,939


4,471


3,207


3,062


Income taxes

1,663


1,512


843


1,062


Earnings from continuing operations

4,276


2,959


2,364


2,000


(Loss) from discontinued operations, net of tax

-


(158)


-


-


NET EARNINGS 

$         4,276


$        2,801


$         2,364


$            2,000












Earnings per share (EPS) of common stock:










Basic net earnings per share:










Earnings from continuing operations

$           0.84


$          0.59


$           0.46


$              0.40



(Loss) from discontinued operations

$                 -


$        (0.03)


$                 -


$                    -



Basic net earnings per share

$           0.84


$          0.56


$           0.46


$              0.40



Diluted net earnings per share:










Earnings from continuing operations

$           0.84


$           0.59


$           0.46


$              0.39



(Loss) from discontinued operations

$                 -


$         (0.03)


$                 -


$                    -



Diluted net earnings per share

$           0.84


$           0.56


$           0.46


$              0.39


Diluted average shares outstanding

5,091


5,028


5,104


5,070


Depreciation included above

$         5,663


$        5,534


$         2,436


$            2,422


Opening expense included above

$            188


$           277


$            120


$                 73












 

Frisch's Restaurants, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands of dollars)





December 10,


May 28,





2013


2013





(unaudited)




Assets






Current assets







Cash and equivalents

$        1,144


$        4,256




Receivables

1,384


1,297




Inventories

6,578


5,765




Other current assets

2,219


3,103





11,325


14,421



Property and equipment

106,254


102,145



Other assets







Goodwill & other intangible assets

774


775




Property held for sale and land investments

7,637


8,405




Deferred income taxes and other

3,498


2,966





11,909


12,146












$    129,488


$    128,712









Liabilities and shareholders' equity






Current liabilities







Accounts payable

$        8,621


$        5,879




Accrued expenses

7,971


8,025




Other

2,920


5,357





19,512


19,261










Long-term obligations







Long-term debt

7,328


9,600




Other long-term obligations

15,751


16,195





23,079


25,795










Shareholders' equity

86,897


83,656












$    129,488


$    128,712









 

SOURCE Frisch's Restaurants, Inc.



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http://www.frischs.com

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