69 percent Revenue Growth For Perkins Restaurant Franchise
Posted on: 30/08/2006
The Perkins & Marie Callender's restaurant franchise group, formerly The Restaurant Company, reports results for fiscal 2006 second quarter.
Perkins & Marie Callender's Inc. (together with its consolidated subsidiaries, the "Company") today reported financial results for its fiscal 2006 second quarter ended July 9, 2006.
Revenues for the second quarter of fiscal 2006 increased 69.8% to $136.9 million from $80.6 million for the second quarter of fiscal 2005. The growth in revenues is primarily attributable to the inclusion of $55.3 million of revenues from Marie Callender's. Perkins' and Marie Callender's restaurants experienced a 0.6% increase in comparable restaurant sales, each of which resulted primarily from an increase in the average guest check.
Food costs for the second quarter of fiscal 2006 totalled 29.2% of food sales, up 1.1 percentage points from the second quarter of fiscal 2005. This increase resulted primarily from the inclusion of Marie Callender's operations in the current quarter. Marie Callender's restaurants have a higher food cost as a percentage of revenues as compared to Perkins, since Marie Callender's has a higher proportion of lunch and dinner menu items sold. Perkins' restaurants have a higher proportion of breakfast menu items sold, which generally have a lower food cost relative to their sales prices than lunch and dinner menu items.
Labor and benefits costs, as a percentage of total revenues, decreased 0.9 percentage points for the second quarter of fiscal 2006. Marie Callender's labor and benefits costs, as a percentage of revenue, were slightly below the labor and benefits percentage for Perkins for the current quarter. The overall decrease in costs was primarily due to the favourable impact of Perkins and Marie Callender's menu price increases, partially offset by wage rate increases impacting Perkins' restaurants in Florida and Minnesota.
Operating expenses for the second quarter of fiscal 2006 were $32.9 million, compared to $15.0 million for the second quarter of fiscal 2005. This increase is primarily due to the inclusion of $15.1 million of Marie Callender's operating expenses in the current quarter, as well as increased restaurant rent expense at Perkins' restaurants, resulting from the sale- leaseback transaction consummated by Perkins during 2005.
General and administrative expenses, as a percentage of total revenues, decreased by 2.3 percentage points for the second quarter of fiscal 2006 as compared to the second quarter of fiscal 2005. The decrease was primarily due to a lower general and administrative expense as a percentage of revenues at Marie Callender's than Perkins, plus headcount reductions at both Perkins and Marie Callender's during the quarter.
For the second quarter of fiscal 2006, the Company reported net income of $3.8 million, compared to net income of $0.2 million for the second quarter of fiscal 2005. The increase in net income is primarily a result of the $12.6 million gain on the extinguishment of Marie Callender's debt, partially offset by increased Perkins rent expense resulting from the sale-leaseback transaction, increased depreciation and amortization expense resulting from the purchase accounting adjustments recorded during the quarter that related to Castle Harlan Partners IV, L.P.'s purchase of the Company in September 2005, transaction costs related to the merger and interest expense.
Perkins & Marie Callender's Inc., formerly The Restaurant Company, operates and franchises mid-scale 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 operates and franchises mid-priced, casual-dining restaurants specializing in the sale of pie and other bakery items under the name Marie Callender's Restaurant and Bakery. As of July 9, 2006, we operated 151 and franchised 329 Perkins' restaurants and operated 79 and franchised 46 Marie Callender's restaurants.
Additionally, we operated 11 Marie Callender's as partnership locations, two Company-owned and one franchised Marie Callender's Grill locations and one East Side Mario's. Please refer to Marie Callender's website at www.mariecallenders.com for historical comparative sales data under the "About Us -- In the News" link.
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