Perkins & Marie Callender's Inc. (together with its consolidated subsidiaries, the "Company", "PMCI" or "we") is reporting today its financial results for the second quarter ended
July 11, 2010.
Highlights for the Second Quarter of 2010:
- Perkins restaurants' comparable sales decreased by 5.1% and Marie Callender's restaurants' comparable sales decreased by 5.6% in the second quarter of 2010 compared to the second quarter of 2009.
- Since the beginning of 2010, five Perkins franchised restaurants have opened. In addition, one corporate and two franchised Marie Callender's restaurants have closed.
J. Trungale, President and Chief Executive Officer of Perkins & Marie Callender's Inc., commented, "While the difficult economy continues to negatively impact away-from-home dining trends, increased franchise activity since the second quarter of 2009 at Perkins is encouraging, as are overall steady sales margins and improved pie manufacturing efficiencies at Foxtail. We will continue our efforts to hold margins and improve store level execution for the Perkins and Marie Callender's brands, while simultaneously focusing on the strategic development of both concepts."
Financial Results for the Second Quarter of 2010
Revenues in the second quarter of 2010 decreased 6.3% to $114.2 million from $121.9 million in the second quarter of 2009. The decrease resulted from a $5.5 million decrease in sales in the restaurant segment, a $2.0 million decrease in the Foxtail segment and a $0.2 million decrease in licensing and other revenues. Company-owned Perkins comparable restaurant sales decreased by 5.1% and Company-owned Marie Callender's comparable restaurant sales decreased by 5.6% in the second quarter of 2010 as compared to the second quarter of 2009.
Food cost for the quarter ended July 11, 2010 decreased to 25.5% of food sales from 26.3% for the quarter ended July 12, 2009. Restaurant segment food cost was up by 0.3 percentage points to 25.5% of food sales in the quarter ended July 11, 2010, primarily due to higher dairy, coffee and seafood costs. In the Foxtail segment, food cost decreased to 55.0% of food sales in the second quarter of 2010 from 57.6% in the second quarter of 2009, primarily due to higher sales margins and improved pie manufacturing efficiencies.
Labor and benefits costs, as a percentage of total revenues, increased by 0.4 percentage points to 34.0% in the second quarter of 2010 as compared to the prior year's second quarter. The labor and benefits ratio increased by 0.3 percentage points in the restaurant segment due primarily to the decline in revenues, while the Foxtail segment labor and benefits expense decreased from 13.4% in the second quarter of 2009 to 12.2% in the second quarter of 2010. This decrease was due primarily to improved production efficiencies, which resulted in lower production wages.
Operating expenses for the quarter ended July 11, 2010 were $32.5 million, or 28.5% of total revenues, compared to $32.1 million, or 26.3% of total revenues in the quarter ended July 12, 2009. Restaurant segment operating expenses increased by 1.5 percentage points to 30.4% of restaurant sales in the second quarter of 2010, due primarily to a decline in revenues and increases in rent, real estate taxes and utilities. Operating expenses in the Foxtail segment increased by 1.6 percentage points to 12.1% of segment food sales, due primarily to a decrease in food sales in the Foxtail segment, as operating expenses for this segment decreased by 3.2% during the second quarter of 2010.
General and administrative expenses were 9.5% of total revenues, an increase of 1.2 percentage points from the second quarter of 2009. The percentage increase is primarily due to decreased revenues, higher incentive compensation accruals and legal costs, which were partially offset by lower audit fees.
Depreciation and amortization was 4.4% and 4.6% of revenues in the second quarters of 2010 and 2009, respectively.
Interest, net was 9.0% of revenues in the quarter ended July 11, 2010, compared to 8.3% in the quarter ended July 12, 2009. This expense increased due to an approximate $7.1 million increase in the average debt outstanding during the second quarter of 2010.
Adjusted EBITDA
The Company defines adjusted EBITDA as net income or loss attributable to PMCI before income taxes or benefits, interest expense (net), depreciation and amortization, asset impairments and closed store expenses, pre-opening expenses, management fees, certain non-recurring income and expense items and other income and expense items unrelated to operating performance. The Company considers adjusted EBITDA to be an important measure of the performance of core operations because adjusted EBITDA excludes various income and expense items that are not indicative of the Company's operating performance. The Company believes that adjusted EBITDA is useful to investors in evaluating the Company's ability to incur and service debt, make capital expenditures and meet working capital requirements. The Company also believes that adjusted EBITDA is useful to investors in evaluating the Company's operating performance compared to that of other companies in the same industry, as the calculation of adjusted EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending, all of which may vary from one company to another for reasons unrelated to overall operating performance. The Company's calculation of adjusted EBITDA is not necessarily comparable to that of other similarly titled measures reported by other companies. Adjusted EBITDA is not a presentation made in accordance with U.S. generally accepted accounting principles and accordingly should not be considered as an alternative to, or more meaningful than, earnings from operations, cash flows from operations or other traditional indications of a company's operating performance or liquidity. The following table provides a reconciliation of net loss to adjusted EBITDA:
| Second Quarter
|
| Second Quarter
|
| Year-to-Date
|
| Year-to-Date
| |
| Ended
|
| Ended
|
| Ended
|
| Ended
| |
|
(in thousands)
| July 11, 2010
|
| July 12, 2009
|
| July 11, 2010
|
| July 12, 2009
| |
|
|
|
|
|
|
|
| |
|
Net loss attributable to PMCI
| $ (11,153)
|
| (5,880)
|
| $ (25,759)
|
| (15,634)
| |
|
Provision for (benefit from) income taxes
| -
|
| -
|
| -
|
| -
| |
|
Interest, net
| 10,299
|
| 10,130
|
| 23,864
|
| 23,745
| |
|
Depreciation and amortization
| 5,059
|
| 5,557
|
| 11,965
|
| 12,913
| |
|
Asset impairments and closed store expenses
| 440
|
| 346
|
| 2,105
|
| 1,208
| |
|
Pre-opening expenses
| -
|
| 33
|
| -
|
| 33
| |
|
Management fees
| 919
|
| 721
|
| 2,145
|
| 1,937
| |
|
Other items
| -
|
| (1,377)
|
| -
|
| (2,195)
| |
|
Adjusted EBITDA
| $ 5,564
|
| 9,530
|
| $ 14,320
|
| 22,007
| |
|
|
|
|
|
|
|
| |
| | | | | | | |
About the Company
Perkins & Marie Callender's Inc. operates two restaurant concepts: (1) full-service family dining restaurants, which serve a wide variety of high quality, moderately-priced breakfast, lunch and dinner entrees, under the name Perkins Restaurant and Bakery, and (2) mid-priced, casual-dining restaurants specializing in the sale of pies and other bakery items under the name Marie Callender's Restaurant and Bakery. As of July 11, 2010, the Company owned and operated 163 Perkins restaurants and franchised 319 Perkins restaurants. The Company also owned and operated 76 Marie Callender's restaurants, two Callender's Grill restaurants, an East Side Mario's restaurant and 12 Marie Callender's restaurants under partnership agreements. Franchisees owned and operated 37 Marie Callender's restaurants and one Marie Callender's Grill.
Conference Call
Perkins & Marie Callender's Inc. has scheduled a conference call for Tuesday, September 7, 2010, at 10:00 a.m. (CDT) to review second quarter of 2010 earnings. The dial-in number for the conference call is (866) 207-2203, and the conference ID number is 93324512. A taped playback of this call will be available two hours following the call through midnight (EDT) on Tuesday, September 14, 2010. The taped playback can be accessed by dialing (800) 642-1687 and by using access code number 93324512.
Forward-Looking Statements
This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements, written, oral or otherwise made, may be identified by the use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "should" or "will," or the negative thereof or other variations thereon or comparable terminology.
We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors affecting these forward-looking statements include, among others, the following:
- macroeconomic conditions, consumer preferences and demographic patterns, either nationally or in particular regions in which we operate;
- our substantial indebtedness;
- our liquidity and capital resources;
- competitive pressures and trends in the restaurant industry;
- prevailing prices and availability of food, labor, raw materials, supplies and energy;
- a failure to obtain timely deliveries from our suppliers or other supplier issues;
- our ability to successfully implement our business strategy;
- relationships with franchisees and the financial health of franchisees;
- legal proceedings and regulatory matters; and
- our development and expansion plans.
Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments
PERKINS & MARIE CALLENDER'S INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands)
| |
| Quarter
|
| Quarter
|
| Year-to-Date
|
| Year-to-Date
| |
| Ended
|
| Ended
|
| Ended
|
| Ended
| |
| July 11, 2010
|
| July 12, 2009
|
| July 11, 2010
|
| July 12, 2009
| |
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
| |
|
Food sales
| $
| 107,573
|
|
| 115,061
|
|
| 254,888
|
|
| 275,938
| |
|
Franchise and other revenue
|
| 6,580
|
|
| 6,815
|
|
| 15,070
|
|
| 15,191
| |
|
Total revenues
|
| 114,153
|
|
| 121,876
|
|
| 269,958
|
|
| 291,129
| |
|
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
| |
|
Cost of sales (excluding depreciation shown below):
|
|
|
|
|
|
|
|
|
|
|
| |
|
Food cost
|
| 27,434
|
|
| 30,301
|
|
| 64,716
|
|
| 73,275
| |
|
Labor and benefits
|
| 38,846
|
|
| 40,904
|
|
| 92,208
|
|
| 96,229
| |
|
Operating expenses
|
| 32,534
|
|
| 32,072
|
|
| 76,269
|
|
| 77,773
| |
|
General and administrative
|
| 10,835
|
|
| 10,129
|
|
| 24,941
|
|
| 24,218
| |
|
Depreciation and amortization
|
| 5,059
|
|
| 5,557
|
|
| 11,965
|
|
| 12,913
| |
|
Interest, net
|
| 10,299
|
|
| 10,130
|
|
| 23,864
|
|
| 23,745
| |
|
Asset impairments and closed store expenses
|
| 440
|
|
| 346
|
|
| 2,105
|
|
| 1,208
| |
|
Other, net
|
| (140)
|
|
| (1,716)
|
|
| (358)
|
|
| (2,677)
| |
|
Total costs and expenses
|
| 125,307
|
|
| 127,723
|
|
| 295,710
|
|
| 306,684
| |
|
Loss before income taxes
|
| (11,154)
|
|
| (5,847)
|
|
| (25,752)
|
|
| (15,555)
| |
|
Benefit from (provision for) income taxes
|
| -
|
|
| -
|
|
| -
|
|
| -
| |
|
Net loss
|
| (11,154)
|
|
| (5,847)
|
|
| (25,752)
|
|
| (15,555)
| |
|
Less: net (loss) earnings attributable to
|
|
|
|
|
|
|
|
|
|
|
| |
|
non-controlling interests
|
| (1)
|
|
| 33
|
|
| 7
|
|
| 79
| |
|
Net loss attributable to Perkins & Marie
|
|
|
|
|
|
|
|
|
|
|
| |
|
Callender's Inc.
| $
| (11,153)
|
|
| (5,880)
|
|
| (25,759)
|
|
| (15,634)
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
| | | | | | | | | | | |
PERKINS & MARIE CALLENDER'S INC. CONSOLIDATED BALANCE SHEETS (In thousands, except par and share amounts)
| |
|
| July 11,
|
| December 27,
|
| |
|
| 2010
|
| 2009
|
| |
ASSETS
|
| (Unaudited)
|
|
|
| |
|
CURRENT ASSETS:
|
|
|
|
|
| |
|
Cash and cash equivalents
|
| $ 2,263
|
| 4,288
|
| |
|
Restricted cash
|
| 7,462
|
| 8,110
|
| |
Receivables, less allowances for doubtful accounts of $859 and $829 in 2010 and 2009, respectively
|
| 15,141
|
| 18,125
|
| |
|
Inventories
|
| 10,383
|
| 11,062
|
| |
|
Prepaid expenses and other current assets
|
| 3,676
|
| 1,864
|
| |
|
Assets held for sale, net
|
| 1,304
|
| -
|
| |
|
Total current assets
|
| 40,229
|
| 43,449
|
| |
|
|
|
|
|
| |
<
Johnny Rockets, known worldwide for its authentic, all-American menu, announces the addition of 17 Deluxe Shakes to its Company-wide selection of classic Shakes and malts. In celebration of the national Deluxe Shake roll-out and September's National Shake Month status, Johnny Rockets today launched its "Snap and Shake" giveaway. Fans can post snapshots of themselves drinking a Johnny Rockets Shake on the Company's Facebook wall or Twitter page for a chance to win free Shakes and free passes to Six Flags theme parks.
(Photo: http://photos.prnewswire.com/prnh/20100901/LA57825)
(Photo: http://www.newscom.com/cgi-bin/prnh/20100901/LA57825)
Throughout September, Johnny Rockets will award 100 Six Flags passes and 100 Johnny Rockets world-famous Shakes to guests who share a picture of themselves with a classic or Deluxe Shake, in any Johnny Rockets restaurant. Fans must upload their images to the official Johnny Rockets Facebook page (http://www.facebook.com/johnnyrocketsus) or tweet the picture to @Johnny_Rockets. The first 50 fans who submit snapshots with a Shake will be awarded two free passes to any Six Flags theme park, nationwide. The second 50 will each receive two vouchers for a free Johnny Rockets Shake. One randomly drawn photo submission winner will be able to shake things up at their favorite concert with a $200 Ticketmaster gift certificate.
Made with premium ingredients, Johnny Rockets' Deluxe Shake varieties include Banana, Big Apple, Black Forest, Butterfinger®, Chocolate-Banana, Chocolate Madness, Chocolate-Peanut Butter, Chocolate-Strawberry Kiss, Chocolate Vanilla Twist, Coffee, Mocha Fudge, Orange Dreamsicle®, Oreo® Cookies & Cream, Peanut Butter, Strawberry-Banana, Strawberry Oreo® Crumble and Very Cherry.
"Beyond our all-American classic fare, including everyone's favorite Original Hamburger, Johnny Rockets is renowned for our unbelievably creamy, hand-dipped Shakes...which start with our custom blend of premium vanilla ice cream," said Johnny Rockets Vice President of Brand Marketing and Communications, Cozette Koerber. "And now that all of our restaurants are promoting Deluxe Shakes, we want to show them off through our Guests' photos on Facebook and Twitter."
Koerber adds, "We know our Facebook Fans and Twitter Followers are great ambassadors for our brand and we want to reward them with some of the things that we like best - milkshakes, amusement parks and music. In fact, we hope to create many more compelling reasons for our Guests to become and stay connected with us by implementing contests, 'secret' events, exclusive announcements and social network specials throughout the coming months."
For more information about Johnny Rockets or franchising partnership opportunities go to www.johnnyrockets.com.
About Johnny Rockets
Since 1986, Johnny Rockets has offered the timeless food, fun and friendliness of classic Americana. Every Johnny Rockets restaurant serves great-tasting food from a menu of all-American favorites, including juicy hamburgers, classic sandwiches and hand-dipped Shakes and malts. It's the place to go for friendly service, flavorful food, uplifting music and relaxed, casual fun. Headquartered in Lake Forest, Calif., Johnny Rockets has 295 corporate and franchise-owned restaurants in 32 states, including D.C. and Puerto Rico, and 15 countries, including those found in Six Flags amusement parks, FedEx Field and on board 10 Royal Caribbean cruise ships.
SOURCE Johnny Rockets
Back to top
RELATED LINKS
http://www.johnnyrockets.com
|