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Restaurant Industry News
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Friday November 21st, 2008 |
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Mexican Restaurants 4Q Profit Jumps
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Mexican Restaurants, Inc. Announces Fiscal Year-End Results (NASDAQ:CASA) |
Click here for financial tables
For the Company's 2005 fiscal year ended January 1, 2006, the Company reported net income of $2,316,997 or $0.63 cents per diluted share compared with net income of $1,760,974 or $0.48 per diluted share for fiscal year 2004. For the fourth quarter ended January 1, 2006, the Company reported net income of $1,108,481 or $0.30 cents per diluted share compared with net income of $24,136 or $0.01 cent per diluted share for the same quarter in fiscal 2004. Fiscal year 2005 consisted of 52 weeks compared with fiscal year 2004, which consisted of 53 weeks.
The Company's revenues for fiscal year 2005 increased $3.4 million or 4.4% to $81.2 million compared with $77.8 million for fiscal year 2004. Restaurant sales for fiscal year 2005 increased $2.9 million or 3.8% to $80.0 million compared with $77.0 million for fiscal year 2004, despite being closed 309 store-days during the third and fourth quarters due to the impact of Hurricane Rita. For the fourth quarter ended January 1, 2006, revenues increased $829,395 or 4.1% to $20.9 million compared with $20.1 million for the fourth quarter one year ago, despite being closed 196 store-days due to the impact of Hurricane Rita. In addition, the fourth quarter of fiscal 2005 consisted of 13 weeks compared with the fourth quarter of fiscal 2004, which consisted of 14 weeks.
Andrew Dennard, Executive Vice President and Chief Financial Officer stated that, "We estimate this extra week contributed $1.6 million to revenues and $380,000 to net income or $0.10 cents per diluted share in fiscal year 2004."
For fiscal year 2005, the comparative increase in restaurant sales reflects the opening of one new restaurant and positive same-restaurant sales (the eighth consecutive quarter of positive same-restaurant sales). For fiscal 2005, total system same-restaurant sales increased 3.8%, Company-owned same-restaurant sales increased 4.6% and franchise-owned same-restaurant sales increased 1.2% compared with fiscal year 2004. For the fourth quarter ended January 1, 2006, total system same-restaurant sales increased 9.4%, Company-owned same-restaurant sales increased 12.0% and franchised-owned same-restaurant sales increased 1.7% compared with the fourth quarter ended January 2, 2005.
The fiscal years ended January 1, 2006 and January 2, 2005 included $637,367 and $495,120 of net losses from discontinued operations related to restaurant closures, respectively. The fourth quarters ended January 1, 2006 and January 2, 2005 included $545,357 and $198,752 of net losses from discontinued operations related to restaurant closures, respectively. The fiscal year and fourth quarter ended January 2, 2005 also included pre-tax, non-cash asset impairment charges from continuing operations of $700,682. The fiscal year ended January 1, 2006 did not have asset impairment charges from continuing operations.
On September 24, 2005, Hurricane Rita hit the Gulf Coast area, affecting a number of the Company's restaurants in that region. The Company subsequently hired an insurance consulting firm to assist management with the filing of its insurance claim. Based on the low range of the consulting firm's estimate and negotiations with the insurance carrier, the Company recorded an insurance claim of $1.6 million in the fourth quarter of fiscal 2005.
The consolidated statement of operations ended January 1, 2006, includes a separate line item for a gain of $470,702 resulting from assets damaged by Hurricane Rita and other expenses offset by insurance proceeds for the replacement of assets. The Company's insurers paid $300,000 during the fourth quarter of 2005 and $785,028 in first quarter of 2006 related to the property damage claim. Additionally, the Company has recognized $534,163 for estimated business interruption proceeds.
Commenting on the Company's year-end results, Curt Glowacki, Chief Executive Officer, stated, "I am very proud of our fiscal year results, especially given the disruptive impact of Hurricane Rita during the third quarter in which we lost approximately $1.0 million in revenue. After the hurricane, our employees rallied and re-opened restaurants quickly, in most cases re-opening before the competition. Same-store sales increased 12.0% during the fourth quarter, and same-store sales have increased 5.0% to-date during the first quarter of fiscal 2006. Including the first quarter of fiscal 2006, we have delivered nine consecutive quarters of positive same-restaurant sales, reflecting our customers' continued response to our marketing, operations and value propositions. Despite rising utility, natural gas and health insurance costs, we managed to hold restaurant operating margins steady with last year's operating margins by finding efficiencies in other areas of our operations."
Mr. Glowacki added, "Considering the extra week of restaurant sales and profits in fiscal year 2004 and the disruption of Hurricane Rita in fiscal 2005, we made impressive gains in revenue and net income growth in fiscal 2005. During the year we opened one new restaurant and extensively remodeled one existing restaurant (in which we temporarily closed the restaurant for six weeks), both of which are exceeding our sales and cash flow objectives. In addition, we moderately remodeled six restaurants. We paid down $1.5 million in debt during fiscal year 2005 to a balance of $5.5 million, and spent $1.7 million to repurchase 181,300 shares of our common stock. "
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