SOURCE: Meritage Hospitality Group, Inc.

Meritage Hospitality Group, Inc.

July 19, 2012 10:24 ET

Meritage Reports Second Quarter 2012 Results; Continued Sales & Earnings Growth

GRAND RAPIDS, MI--(Marketwire - Jul 19, 2012) - Meritage Hospitality Group, Inc. (OTCQX: MHGU) (PINKSHEETS: MHGU), the nation's premier franchise restaurant operator, today reported financial results for the second quarter ended July 1, 2012. 

Second Quarter 2012 Highlights

  • Sales increased 3.9% to $25.3 million from $24.4 million for the same period last year.
  • Income from Operations was $602,000 compared to $785,000 for the same period last year. (2012 included a one-time charge of $481,000 related to pre-opening and acquisition expenses and closing and disposition expenses compared to $280,000 in 2011).
  • Net Income from Continuing Operations increased 78.8% to $1,105,000 compared to $618,000 for the same period last year.
  • Consolidated EBITDA (a non-GAAP measure) increased 59.2% to $1,430,000 compared to $898,000 million for the same period last year.
  • The Company declared its 35th consecutive quarterly dividend on its Series B Cumulative convertible Preferred Stock of $0.20 per share, which was payable on July 1, 2012 to shareholders of record as of June 15, 2012. 
  • The Company declared a special common stock dividend of $0.01 per share which was paid July 1, 2012 to shareholders of record as of June 15, 2012.

"We are pleased with our continued earnings improvements and the operational integration of newly acquired and developed restaurants. The Image Activation program -- the modernization of Wendy's restaurants, along with new restaurant acquisitions remain the focus of our 150 restaurant growth plan. We are allocating substantial resources toward Wendy's capital improvements and new store development, which we believe will ultimately accelerate sales growth as the Wendy's system transitions to a modern image.

The Company opened a new casual dining restaurant under its proprietary Twisted Rooster themed concept during the quarter, and has contracted additional potential Twisted Rooster locations for 2013," said Meritage CEO, Robert E. Schermer, Jr. 

Six Months 2012 Highlights

  • Sales for the six months increased 11.7% to $48.9 million compared to sales of $43.8 million for the same period last year.
  • Income from Operations was $1,171,000 compared to $1,239,000 for the same period last year.
  • Net Income from Continuing Operations increased 86.3% to $1,532,000 compared to $822,000 for the same period last year.
  • Consolidated EBITDA (a non-GAAP measure) increased 44.7% to $2.4 million compared to $1.7 million in 2011.

The Company is working diligently to achieve its 2012 fiscal targets and "150 restaurants x 2015" growth plan. We are optimistic about the long-term growth and modernization prospects being developed by the Wendy's brand. The Wendy's opportunities for Meritage include revitalization of the core premium products, facility modernization-image activation, new store acquisitions, development and re-focused marketing initiatives. The Company's proprietary Twisted Rooster concept operating results continue to improve as the company builds scale and operating efficiencies.

SAFE HARBOR STATEMENT
Certain information in this news 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