GRAND RAPIDS, Mich., Oct. 16, 2019 (GLOBE NEWSWIRE) — Meritage Hospitality Group Inc. (OTCQX: MHGU), one of the nation’s premier restaurant operators, today reported financial results for the third quarter and the nine months ended September 29, 2019.
2019 Third Quarter Highlights:
- Sales increased 6.3% to a record $117.9 million compared to $110.9 million for the same period last year.
- Earnings from Operations were to $5.8 million compared to $6.3 million for the same period last year. (The current quarter included additional one-time pre-opening and acquisition costs of $806,000).
- Net Earnings were $2.6 million compared to $3.7 million last year. (The change in Net Earnings reflects a negative year over year non-cash GAAP change of $582,000 resulting from the Company’s interest rate swap agreements, which are measured at fair value based on mark-to-market).
- Consolidated EBITDA (a non-GAAP measure) was $10.1 million compared to $10.5 million for the same period last year.
“Our increased sales results through the third quarter reflect the underlying strength of the Wendy’s franchise and our ability to perform in a challenging labor environment. We continue to execute our strategic priorities, including new restaurant development and modernization. We believe that this focus will continue to generate long-term, industry-leading returns for our shareholders.
Year to date the Company’s consolidated EBITDA has increased 18.7% over last year, and we expect sale and earnings growth rates to accelerate in 2020 and 2021.
Our newly built, reimaged and acquired Wendy’s continue to provide a significant earnings catalyst, which we believe will be further enhanced by the Wendy’s nationwide roll-out of a new breakfast program during the first quarter next year,” stated Meritage CEO, Robert E. Schermer, Jr.
The Company has committed significant capital resources to the Wendy’s brand initiatives including commitment to build 40 new restaurants under the Groundbreaking Incentive Program, which include associated royalty and national marketing fee incentives.
2019 Nine Months Highlights:
- Sales for the nine months ended September 29, 2019, increased 5.75% to $346.4 million compared to sales of $327.5 million for the same period last year.
- Earnings from Operations were $17.6 million compared to $19.4 million for the same period last year. (The current quarter included $1.4 million of additional depreciation (non-cash expense) associated with new and renovated restaurants).
- Net Earnings were $10.5 million compared to $10.7 million for the same period last year. (The change in Net Earnings reflects a negative year over year non-cash GAAP change of $4.0 million resulting from the Company’s interest rate swap agreements, which are measured at fair value based on mark-to-market).
- Consolidated EBITDA (a non-GAAP measure) increased 18.7% to $35.2 million compared to $29.6 million last year.
- Common stock cash dividends paid during the first nine months of the year represent a 100% increase over the same period last year.
Meritage continues to distinguish itself as a leader and innovator in the quick service restaurant and family dining segments, striving for best in class results through a performance based culture committed to operational excellence, strategic acquisitions and real estate development.
Full -Year 2019 Outlook: Accelerating Growth Ahead
- Sales growth of 10% to 20%
- Earnings from Operations growth of 10% to 20%
- Net Earnings growth of 15% to 25%
- EBITDA growth of 15% to 25%
- Common stock dividend growth of 50% to 60%
Meritage Hospitality Group is one of the nation’s premier restaurant operators, with 327 restaurants in operation located in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas and Virginia. Meritage is headquartered in Grand Rapids, Michigan, operating with a workforce of approximately 10,500 employees. The Company has approximately 6.3 million (basic) common shares outstanding. The Company’s public filings can be viewed at www.otcmarkets.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.
CONTACT:
Robert E. Schermer, Jr., CEO
Meritage Hospitality Group Inc.
(616) 776-2600