Humpty's Restaurants International Inc.
TSX VENTURE : HMP

Humpty's Restaurants International Inc.

December 03, 2007 01:24 ET

Humpty's Restaurants International Inc. Third Quarter 2007 Results

CALGARY, ALBERTA--(Marketwire - Dec. 3, 2007) - Humpty's Restaurants International Inc. (TSX VENTURE:HMP) today released financial results for the 9-month period ending September 30, 2007.



For the 9- Months ended September 30
2007 2006
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Consolidated Revenue: $10,091,725 $ 9,110,777
Net Income: 319,994 315,737
Net Income/Share: 0.022 0.021
Shares Outstanding: 14,661,785 14,776,785
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We are pleased to present the Third Quarter Report for Humpty's Restaurants International Inc. (HRII) for the nine months ending September 30, 2007.

Operating results as compared to the same period in fiscal 2006 decreased by 20.1% ($92,493 vs. $115,791 in Q3/06). Even though our 2007 "30 DAYS OF WINNING" promotion occurred in Q4/07 we expensed approximately $90,000 for this promotion in Q3/07. Overall the operating results for the nine-month period ending September 30, 2007 increased marginally by 1.4% (net income $319,994 vs. net income $315,737 in fiscal 2006).

Year-over year Third Quarter combined revenue (Franchise Revenue and Corporate Store Operations) increased during the period from $3.495 million (Q3/06) to $3.676 million (Q3/07) Franchise revenue decreased by 6.8% which can be attributed to HRII terminating two Franchise locations in Q3/07 and subsequently writing off outstanding Royalty and Advertising fees. Corporate Store Operations continues to record positive results as was evident in Q3/07 with a 9.2% increase. Despite the increase in revenue, the profit dollars that were contributed decreased by 23.2%. The increase in operating expenses decreased by 5% from Q2/07 however the $80,185 increase over Q3/06 was the main contributor to the reduced profitability in this Quarter. We were pleased to limit our Salaries and Employee Benefits increase to only 5.6% ($27,142 vs. sales increase of $240,742).

Significant events that occurred in the Third Quarter were as follows.

a) Franchise locations in Brooks and Camrose, AB were terminated. These locations were not lacking in sales. As in most cases, the terminations occurred due to mismanagement of finances. The Brooks location was re-franchised in September /07 and the Camrose location will re-open in December /07.

b) Sherwood Park, AB that closed in June /07 due to a lack of staff has been franchised (formerly a Corporate location) and was re-opened at the end of November /07.

c) HRII sold its Classic Cafe/C. Store/Gas Bar/Car Wash operation in Red Deer. The closing date for this sale is December /07. (Refer to the MD & A report for more details). Although this business was very high volume for HRII it lacked the "on hands" supervision that a Franchisee can offer. We predict this business will increase an additional 6-8% due strictly to this type of management control.

d) The Franchise Agreement for the Golden, B.C. location expired October 31/07. We did not renew the Agreement therefore the location now sits vacant. This location is on the Trans Canada Highway and also has an Esso Gas Bar and Convenience Store attached. Plans are presently in the works for a complete retrofit of this location with a scheduled re-opening in April /08. With these proposed renovations, this location should generate similar revenue to our Red Deer location. It will be Franchised.

Currently HRII has fifty (50) locations in Western Canada. Eight (8) of these locations are corporately owned and one (Golden) is currently closed for renovations. Our mandate is to continually 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 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
    or
    Humpty's Restaurants International Inc.
    Tom Scappatura
    Controller
    (403) 269-4675
    (403) 266-1973 (FAX)
    Email: info@humptys.com
    Website: www.humptys.com