Humpty's Restaurants International Inc.
TSX VENTURE : HMP

Humpty's Restaurants International Inc.

April 28, 2009 18:38 ET

Humpty's Restaurants International Inc. (HMP-TSX) today released Financial Results for the 12-Month Period Ending December 31, 2008

CALGARY, ALBERTA--(Marketwire - April 28, 2009) - Humpty's Restaurants International Inc.(TSX VENTURE:HMP) -



For the 12- Months ended December 31
2008 2007
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Consolidated Revenue: $7,004,516 $12,681,360
Net Income: 503,195 507,284
Net Income/Share: 0.034 0.035
Shares Outstanding: 14,629,785 14,651,785
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We are pleased to present to you our Company's operating results for 2008. The positive results reflect our continuing efforts to solidify our position in the market place and strengthen our financial status. Our net income of $503,195 recorded in fiscal 2008 represents only a marginal decrease of .8% from 2007 when we recorded $507,284 net earnings.

Our Operating Results

Total revenue for fiscal 2008 was $7,004,516, which represents a 44.8% decrease from fiscal 2007 ($12,681,360). The decrease was largely due to the sale of our high volume Restaurant, Convenience Store and Gas location (Red Deer, AB) on December 1, 2007. For the eleven months from January - November 2007 this location contributed $5,902,806 to the total revenue. Royalties and Advertising fees increased 3.1% and 2.8% respectively, which indicates overall increased sales in our Franchise locations for 2008.

Despite the decrease in revenues in fiscal 2008 our operating expenses recorded a very positive decrease. In fiscal 2007 operating expenses were 97.7% of revenue. This compares to operating expenses for fiscal 2008 being 91.3% of revenue. This significant decrease in operating expenses contributed an increase of $321,628 to earnings (before income taxes). The expense item recording the most positive improvement was "Lease settlements and franchise assistance". This category was reduced by $414,096 or 67.2% in fiscal 2008. The plan for 2008 was to reduce this category in the 25% - 30% range; therefore, we are very pleased to have greatly exceeded that projection.

It should be noted that even though earnings for fiscal 2008 were very close to 2007 these earnings were over 90% earned whereas in 2007 over 50% of our earnings were from the sale of property and equipment.

Normal Course Issuers Bid

Since September 2002 the Company has been repurchasing its capital stock through a Normal Course Issuers Bid. Annually since 2002 including 2008 the Company has continued to renew its Bid to repurchase this stock. In 2008 the Company repurchased 22,000 shares bringing the total to date to 565,000 or 3.72% of the original outstanding total. By repurchasing these shares for cancellation the Company continues to enhance shareholder value.

Our Market Position

2009 marks the 32nd year of the Humpty's System in Canada. Our market share on December 31, 2008 was forty-eight (48) locations operating, one location closed for renovations and one new location opening (Calgary, AB) in July 2009. The Company currently owns and operates four locations. One of these locations will be franchised in December 2009. The new location opening in Calgary in July 2009 will also be corporately owned and operated.

Looking Forward

The current downturn in the economy has had some negative impact on our sales particularly in northern B.C. and Alberta, although not to the extent that it has for high-end restaurants. Consumers continue to dine out, as it is still an "event", however they are not spending as much. Humpty's will benefit due to our mid-scale casual restaurant classification, offering similar products at lower prices. The Company has received more inquiries for franchise information in the past five months then in the previous two years. When there is a downturn in the economy there are layoffs. Many of those who receive severance packages begin looking for business opportunities.

We believe the economy is going through a market correction and the positive impact is that being an entrepreneur is now affordable again. Whether it's the cost of leasing, material or skilled trades people, costs have almost reverted to where they were a few years ago. Many of our locations will be conducting renovations in 2009 because now it is more affordable and trades people are available.

The extreme labour shortage experienced in Western Canada for the past three years has improved substantially. We are now able to staff our locations with more qualified employees thus improving our service and quality. This will further enhance our ability to maintain our revenue stream over the next year.

Summary

If we stay focused on profitability growth we will be prepared for expansion opportunities when they present themselves.

We are proud to be associated with a team of dedicated staff and Franchisees who continually contribute an admirable effort to deliver services that exceed our customers' expectations. We acknowledge those staff and Franchisees for their continued commitment and dedication to the Humpty's System. We also appreciate your continued support as shareholders of our Company.

For detailed financial information, audited statements can be found at www.sedar.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Humpty's Restaurants International Inc.
    Mr. Koenig
    (403) 269-4675
    (403) 266-1973 (FAX)
    or
    Humpty's Restaurants International Inc.
    Tom Scappatura
    Controller
    (403) 269-4675
    (403) 266-1973 (FAX)
    Email: info@humptys.com
    Website: www.humptys.com