SOURCE: Meritage Hospitality Group

Meritage Hospitality Group

October 16, 2013 09:23 ET

Meritage Reports 2013 Year to Date and Third Quarter Results; Continued Strong Sales and Earnings Growth

GRAND RAPIDS, MI--(Marketwired - Oct 16, 2013) -  Meritage Hospitality Group Inc. (OTCQX: MHGU), one of the nation's premier restaurant operators, today reported financial results for the nine months and quarter ended September 30, 2013.

Nine Months 2013 Highlights

  • Sales for the nine months ended September 30, increased 38.9% to $102.6 million compared to sales of $73.9 million for the same period last year.

  • Earnings before income taxes increased 134.7% to $ 3.8 million compared to $1.6 million for the same period last year. 

  • Net Income increased 10.8% to $2.4 million compared to $2.2 million for the same period last year -- which included certain non-recurring tax benefits.

  • Consolidated EBITDA (a non-GAAP measure) increased 67.4% to $6.9 million compared to $4.1 million last year.

  • The Company declared its 40th consecutive quarterly dividend on its Series B Cumulative Convertible Preferred Stock of $0.20 per share, which was payable on October 1, 2013 to shareholders of record as of September 15, 2013.

"Company sales exceeded $100 million during the nine months period, a company milestone, but most importantly the quality of our earnings before income taxes has continued to improvement significantly throughout the year," stated Meritage CEO, Robert E. Schermer, Jr. The new Wendy's Pretzel Bacon Cheeseburger and Pretzel Chicken Pub sandwiches have been extremely well received by our customers, driving sales and transactions. Meritage continues to invest substantial resources into the Wendy's brand transformation, including major restaurant property improvements known as "Image Activation."

"We have three Image Activation restaurants under development and remain highly confident that with our demonstrated history of operational excellence and commitment to the Wendy's brand transformation we will continue to drive higher sales and create greater guest satisfaction in our Wendy's restaurant portfolio," added Mr. Schermer.

The Company's proprietary casual dining restaurants which feature unique "made from scratch" recipes using locally sourced ingredients, reported 14% same store sales growth over the nine months period.

Third Quarter 2013 Highlights

  • Sales increased 43.4% to $35.8 million compared to $25.0 million for the same period last year.

  • Earnings before income taxes increased 23.7% to $954,000 compared to $771,000 for the same period last year.

  • Net Income was $303,000 compared to $845,000 for the same period last year -- which included non-recurring tax benefits.

  • Consolidated EBITDA (a non GAAP measure) increased 22.7% % to $2.0 million compared to $1.7 million for the same period last year.

  • The Company acquired two Wendy's restaurants located in the Jacksonville, FL market area.

  • The Company opened Freighters Eatery & Taproom, a 230 seat casual dining restaurant located on the St Clair River in Port Huron, MI.

Meritage Hospitality Group is one of the nation's premier restaurant operators, with 115 restaurants located in Florida, Georgia, Michigan, North Carolina, South Carolina and Virginia. Meritage is headquartered in Grand Rapids, MI operating with approximately 3,900 employees. The Company's public filings can be viewed at www.otcqx.com, under the stock symbol MHGU, or the Company's website www.meritagehospitality.com.

SAFE HARBOR STATEMENT 

Certain information in this new release, particularly information regarding future economic performance and finances, and plans, expectations and objectives of management, constitutes forward-looking statements. Factors set forth in our Safe Harbor Statement, in addition to other possible factors not listed, could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. Please review the Company's Safe Harbor Statement at http://www.meritagehospitality.com.