Humpty's Restaurants International Inc.

Humpty's Restaurants International Inc.

August 29, 2007 21:22 ET

Humpty's Restaurants International Inc. Second Quarter 2007 Results

CALGARY, ALBERTA--(Marketwire - Aug. 29, 2007) - Humpty's Restaurants International Inc. (TSX VENTURE:HMP) today released financial results for the 6-month period ending June 30, 2007.

For the 6- Months ended June 30
2007 2006
Consolidated Revenue: $6,415,967 $5,616,172
Net Income: 227,501 199,945
Net Income/Share: 0.015 0.014
Shares Outstanding: 14,691,785 14,783,785

We are pleased to present the Second Quarter Report of Humpty's Restaurants International Inc. (H.R.I.I.) for the six months ended June 30, 2007. Net income for the period decreased 11.7% ($126,442 vs. $143,216) from the same fiscal period in 2006. However the income results were positive, therefore, the operating results for the six-month period ended June 30, 2007 improved 13.8% (net income $227,501 vs. net income $199,945 in fiscal 2006).

Year-over-year Second Quarter combined revenue (Franchise revenue and Restaurant operations) increased favourably by 12.3% during the period from $3.07 million (Q2/06) to $3.44 million (Q2/07). Franchise revenue increased by 0.9% whereas Restaurant operations had an increase of 16.5%. Earnings before interest, amortization and taxes decreased by nearly $23,000 (6.8%) from the same period in 2006. The differences can be attributed solely to the disappointing performance of Restaurant operations. Despite an increase of 16.5% in revenue the profit dollars that were contributed decreased by 78.1%. The increase of 29.3% in operating expenses was the main contributor of the reduced profitability. Achieving 100% full hours of operation was not accomplished in the Second Quarter therefore considerable revenue was not forthcoming. This extra revenue would have justified much of the additional expenses. Approximately $52,000 of leasehold improvements was expensed in the Second Quarter for Corporate locations in Calgary and Nanton. Salaries and employee benefits increased by 15.2% and despite an increase of 16.5% in revenue this category should only increase by 33% of the revenue growth. The labour shortage is forcing us to continually award increased salary adjustments and expense considerable training dollars.

Our industry, like many other business operations in Western Canada, continues to experience serious staff shortages. Unfortunately we cannot properly manage our businesses without people. The positive side to the whole equation is that we are experiencing very strong revenue growth. Along the way it is forcing us to be better managers. As we continue to develop people the productivity will improve thus the margins. Unfortunately Western Canada does not have the available manpower to feed the increased economic growth therefore we will continue to depend on foreign employees. By the end of the Third Quarter we will have received and trained over twenty-five of these workers with another twenty-five to come. Two of our current foreign workers are already being trained for management positions and we see the opportunity for others to achieve these management goals. We describe the current labour dilemma as short-term pain for long-term gain.

We are still optimistic looking forward to the remainder of 2007. Our mandate is to explore and examine every opportunity that presents itself to grow the system geographically, however, we must remain diligent in our efforts to assist our existing Franchisees and Corporate Managers in improving sales and profitability.

For detailed financial information, audited statements can be found at

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
    Humpty's Restaurants International Inc.
    Tom Scappatura
    (403) 269-4675
    (403) 266-1973 (FAX)