For the second quarter of fiscal year 2007 ended July 1, 2007, Mexican Restaurants, Inc. (Nasdaq:CASA) reported net income of $129,882 or $0.04 per diluted share, compared with net income of $1,006,467 or $0.27 per diluted share for the second quarter of fiscal year 2006. For the 26-week period ended July 1, 2007, the Company reported net income of $60,338 or $0.02 per diluted share, compared with net income of $1,772,414 or $0.48 per diluted share for the 26-week period of fiscal year 2006.
The Company's revenues for the second quarter of fiscal year 2007 increased $20,257 or 0.1% to $20.9 million compared with $20.8 million for the same quarter in fiscal year 2006. Restaurant sales for the second quarter of fiscal 2007 increased $175,075 or 0.9% to $20.7 million compared with $20.5 million for the second quarter of fiscal year 2006. The increase in revenue reflects new restaurant additions and revenues from the Company's Mission Burritos stores of $849,000 partially offset by a $674,000 decline in same-restaurant sales and lost sales due to one closed restaurant for remodeling. For the second quarter ended July 1, 2007, Company-owned same-restaurant sales decreased approximately 2.1% and franchised-owned same-restaurant sales, as reported by franchisees, increased approximately 1.4%.
On a year-to-date basis, the Company's revenue decreased $275,412 or 0.7% to $41.4 million compared with $41.6 million for the same 26-week period in fiscal year 2006. Restaurant sales for 2007 year-to-date decreased $114,140 or 0.3% to $41.0 million compared with $41.1 million for the same 26-week period of fiscal year 2006. The decrease in revenue reflects a $2.2 million decline in same-restaurant sales, partially offset by net new restaurant additions and revenues from the Company's Mission Burritos stores of $2.1 million. For the 26-week period ended July 1, 2007, Company-owned same-restaurant sales decreased approximately 4.6% and franchised-owned same-restaurant sales, as reported by franchisees, decreased approximately 0.6%.
Commenting on the Company's second quarter results, Curt Glowacki, Chief Executive Officer, stated, ?Although we reported a decline in same-store restaurant sales for the second quarter, we are starting to see a positive turn as some of the concepts delivered positive comps for the quarter. Also impacting sales, the Casa Olé located in Victoria, Texas, was closed for eight weeks during the second quarter of 2007 for a major remodel, resulting in lost sales of approximately $250,000.
?We are still facing challenges in controlling our food and labor costs. During the second quarter, we raised menu prices at most of our concepts to partially offset rising commodity prices. On July 24, 2007, the federal minimum wage increased, increasing our payroll costs by approximately $7,000 per week. We are continuing to monitor food and labor costs, and if necessary, we intend to make further menu price increases later on in the fiscal year.
?Moving into the third quarter, we have signed leases for our two new Mission Burritos sites, which we plan to open in the fourth quarter of this year. We are extremely excited to be on track with our growth plans for expanding our fast casual concept. We have also signed a lease for a new Casa Olé restaurant located in Katy, Texas, with construction scheduled to begin in the fourth quarter. As always, we will continue to offer our loyal customers a reasonably priced menu combined with superior service which results in an enjoyable dining experience.?
Mexican Restaurants, Inc. operates and franchises 78 Mexican restaurants. The current system includes 58 Company-operated restaurants, 19 franchisee-operated restaurants and one licensed restaurant.
Non-GAAP Calculation |
13-Week Period Ended 7/01/2007 |
13-Week Period Ended 7/02/2006 |
26-Week Period Ended 7/01/2007 |
26-Week Period Ended 7/02/2006 | ||||||||||||
Income from continuing operations | $ | 266,772 | $ | 1,594,336 | $ | 238,416 | $ | 2,783,836 | ||||||||
Impairment costs | -- | 78,131 | -- | 78,131 | ||||||||||||
Business Interruption Proceeds | -- | (59,621 | ) | -- | (59,621 | ) | ||||||||||
Hurricane Rita Gains | -- | (386,270 | ) | -- | (366,808 | ) | ||||||||||
(Gain) loss on sale of assets | 84,367 | (16,912 | ) | 91,682 | (10,953 | ) | ||||||||||
Severance pay | 98,515 | -- | 98,515 | -- | ||||||||||||
Write-off of prior debt loan fees | 21,874 | -- | 25,000 | -- | ||||||||||||
Income from continuing operations before taxes, as adjusted | 471,528 | 1,209,664 | 453,613 | 2,424,585 | ||||||||||||
Income tax expense | 145,796 | 415,278 | 143,432 | 821,692 | ||||||||||||
Income from continuing operations, as adjusted | 325,732 | 794,386 | 310,181 | 1,602,893 | ||||||||||||
Loss from discontinued operations, net of taxes | (54,398 | ) | (40,603 | ) | (102,684 | ) | (68,021 | ) | ||||||||
Net Income, as adjusted | $ | 271,334 | $ | 753,783 | $ | 207,497 | $ | 1,534,872 | ||||||||
Weighted average number of shares (diluted) | 3,427,983 | 3,666,712 | 3,460,690 | 3,654,962 | ||||||||||||
Diluted income per share, as adjusted | $ | 0.08 | $ | 0.21 | $ | 0.06 | $ | 0.42 |
Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: growth strategy; dependence on executive officers; geographic concentration; increasing susceptibility to adverse conditions in the region; changes in consumer tastes and eating habits; national, regional or local economic and real estate conditions; demographic trends; inclement weather; traffic patterns; the type, number and location of competing restaurants; inflation; increased food, labor and benefit costs; the availability of experienced management and hourly employees; seasonality and the timing of new restaurant openings; changes in governmental regulations; dram shop exposure; and other factors not yet experienced by the Company. The use of words such as ?believes?, ?anticipates?, ?expects?, ?intends? and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Readers are urged to carefully review and consider the various disclosures made by the Company in this release and in the Company's most recent Annual Report and Form 10-K, that attempt to advise interested parties of the risks and factors that may affect the Company's business.
Mexican Restaurants, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) | |||||||||||||||||||||||
13-Week Period Ended 7/01/2007 |
13-Week 7/02/2006 | 26-Week Period Ended 7/01/2007 | 26-Week Period Ended 7/02/2006 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Restaurant sales | $ | 20,700,473 | $ | 20,525,398 | $ | 41,028,292 | $ | 41,142,432 | |||||||||||||||
Franchise fees, royalties and other | 169,716 | 264,913 | 331,960 | 433,611 | |||||||||||||||||||
Business Interruption | - | 59,621 | - | 59,621 | |||||||||||||||||||
20,870,189 | 20,849,932 | 41,360,252 | 41,635,664 | ||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of sales | 5,896,176 | 5,648,178 | 11,643,175 | 11,305,863 | |||||||||||||||||||
Labor | 6,631,254 | 6,632,939 | 13,480,073 | 13,173,066 | |||||||||||||||||||
Restaurant operating expenses | 5,080,626 | 4,625,352 | 10,178,792 | 9,278,369 | |||||||||||||||||||
General and administrative | 1,926,749 | 1,837,579 | 3,835,630 | 3,699,669 | |||||||||||||||||||
Depreciation and amortization | 856,462 | 757,569 | 1,678,235 | 1,479,952 | |||||||||||||||||||
Pre-opening costs | 19,993 | 14,510 | 19,993 | 64,248 | |||||||||||||||||||
Impairment costs | - | 78,131 | - | 78,131 | |||||||||||||||||||
Hurricane Rita gain | - | (386,270 | ) | - | (366,808 | ) | |||||||||||||||||
(Gain) loss on sale of assets | 84,367 | (16,912 | ) | 91,682 | (10,953 | ) | |||||||||||||||||
20,495,627 | 19,191,076 | 40,927,580 | 38,701,537 | ||||||||||||||||||||
Operating income | 374,562 | 1,658,856 | 432,672 | 2,934,127 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 1,861 | 630 | 3,824 | 1,260 | |||||||||||||||||||
Interest expense | (123,951 | ) | (88,793 | ) | (223,583 | ) | (198,992 | ) | |||||||||||||||
Other, net | 14,300 | 23,643 |
1st Jan change | Capi. | |
---|---|---|
-0.53% | 108M | |
-31.38% | 100M | |
+1.69% | 55.73M |
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