Humpty's Restaurants International Inc.

Humpty's Restaurants International Inc.

August 29, 2005 15:58 ET

Humpty's Restaurants International Inc. Second Quarter Results

CALGARY, ALBERTA--(CCNMatthews - Aug. 29, 2005) - Humpty's Restaurants International Inc. (TSX VENTURE:HMP) today released financial results for the 6-month period ending June 30, 2005.

For the 6 - Months ended June 30
2004 2005
Consolidated Revenue: $4,103,501 $4,212,789
Net Income: 90,771 154,511
Net Income/Share: 0.006 0.01
Shares Outstanding: 14,872,285 14,845,785

We are pleased to present the Second Quarter report of Humpty's Restaurants International Inc. (H.R.I.I.) for the six months ending June 30, 2005. Net income for the period was down 2.9%, $110,261 vs. $113,587 in fiscal 2004. The reason for this slight decrease was due to us collecting $100,000 in lease settlement debt in the Second Quarter of 2004. However with the income still relatively positive in the Second Quarter the operating results for the six-month period ending June 30, 2005 improved by 70.2% (net income $154,511 vs. net income $90,771 in fiscal 2004).

Year-over year Second Quarter combined revenue (Franchise Revenue and Restaurant Operations) decreased 2.4% during the period from $2.12 million (Q2/04) to $2.07 million (Q2/05). Franchise revenue increased by 0.4% whereas Restaurant sales had a shortfall of 4.3%. Restaurant revenue was negative because we sold a corporate location in Edmonton in March 2005. In 2004 this location generated $135,246 revenue. As a result of some changes made in 2004, Restaurant Operations continue to contribute significantly to operating profits. In the Second Quarter cash flow (before amortization interest and income taxes) increased by over $70,000 from the same period in 2004. Year to date cash flow from Restaurant Operations is nearly 275% ahead of fiscal 2004. G & A expenses in the Second Quarter decreased by 4.8% whereas operating expenses in Restaurant Operations were reduced by nearly 25%.

Second Quarter earnings before interest amortization and taxes (EBITDA) were the same as fiscal 2004 (355,064 Q2/05 vs. 355,139 Q2/04). Year to date these earnings are 22.1% positive ($592,878 vs. $485,514) or $0.040/share (Q2/05) vs. $0.033/share (Q2/04).

The consolidated balance sheet working capital ratio of 0.58 to 1.00 is virtually the same as 2004 however this will change in the Fourth Quarter. Our property on Gasoline Alley in Red Deer AB has been sold with a closing date of October 1 2005. The proceeds from the sale of this property will be used for debt servicing, development of a corporate location in Sherwood Park, AB and future development in the Ontario market. Refer to the MD & A report for further details on this major transaction.

Year to date system-wide sales (52 locations) are only up .44% over 2004. However this can be considered positive since we have had to reduce hours of operation in many locations due to the extreme lack of quality labour. Twenty-four hour operations are the stores having to cut back and in some situations this means as much as a 20% reduction in sales. Recruitment and retaining of staff is a high priority for H.R.I.I. over the next twelve months.

The Sherwood Park AB Location with the System's first "drive thru" is scheduled to open in the first week in October.

The Third Quarter has started in the right direction with July's same store sales up 2% over 2004. So as we mentioned in our First Quarter report the outlook for 2005 continues to be very favourable. The Corporation's 2005 objective to "Polish its strengths and improve its weaknesses" continues.

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)