SOURCE: Meritage Hospitality Group Inc.

Meritage Hospitality Group Inc.

July 18, 2013 11:07 ET

Meritage Reports Second Quarter 2013 Results; Significant Sales & Earnings Growth

GRAND RAPIDS, MI--(Marketwired - Jul 18, 2013) - Meritage Hospitality Group, Inc. (OTCQX: MHGU), one of the nation's premier restaurant operators, today reported financial results for the second quarter ended June 30, 2013.

Second Quarter Highlights

  • Sales increased 38.6% to $35.1 million from $25.3 million for the same period last year.
  • Earnings before tax increased 165.1% to $2,367,000 compared to $893,000 for the same period last year.
  • Net Earnings increased 81.8% to $1,712,000 compared to $941,000 for the same period last year.
  • Consolidated EBITDA (a non-GAAP measure) increased 132.6% to $3,329,000 compared to $1,430,000 million for the same period last year.
  • The Company declared its 39th consecutive quarterly dividend on its Series B Cumulative convertible Preferred Stock of $0.20 per share, which was payable on July 1, 2013 to shareholders of record as of June 15, 2013.
  • The Company declared a special common stock dividend of $0.01 per share which was paid July 1, 2013 to shareholders of record as of June 15, 2013.

"We are pleased with the continued integration of our newly acquired Wendy's restaurants and the opening of our 113th restaurant. We have allocated substantial resources toward Wendy's growth, including the re-development of three 'Image Activation' restaurants, which we believe will accelerate our Wendy's portfolio transformation.

"The Company is preparing to open a new casual dining restaurant named 'Freighters' under its proprietary casual dining themed restaurant concept during the third quarter," added Meritage CEO, Robert E. Schermer, Jr. Freighters Eatery and Taproom serves as the centerpiece in a new $24.0 million Hilton Double Tree Hotel, Blue Water Convention Center and Baker College Culinary Institute, located on the St. Clair River in Port Huron, MI.

Six Months Highlights

  • Sales for the six months increased 36.5% to $66.8 million compared to sales of $48.9 million for the same period last year.
  • Income before tax increased 154.4% to $2,832,000 compared to $1,113,000 for the same period last year.
  • Net Income increased 57.7% to $2,134,000 compared to $1,353,000 for the same period last year.
  • Consolidated EBITDA (a non-GAAP measure) increased 97.6% to $4.8 million compared to $2.4 million in 2012.

Meritage is one of the nation's premier franchise operators, currently operating 113 quick-service and casual dining restaurants. The Company specializes in the development and operation of restaurants, utilizing its scalable back-of-house operating platform. The Company is headquartered in Grand Rapids, MI and employs a growing workforce of approximately 3,800. The Company's public filings can be viewed at www.otcqx.com, under the common stock symbol MHGU and the company's website at www.meritagehospitality.com.

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.