MERITAGE REPORTS SECOND QUARTER 2010 RESULTS; SALES & NET INCOME GROWTH
Second
Quarter 2010 Highlights
- Sales increased 21.6% to $19.9 million from $16.4 million for the same period last year.
- Income from Operations increased 18.4% to $935,000 from $789,000 for the same period last year.
- Net Income increased 39.2% to $845,000 from $607,000 for the same period last year.
- Consolidated EBITDA (a non GAAP measure) increased 12.1% to $1.3 million from $1.2 million for the same period last year.
- The Company declared its 27th consecutive quarterly dividend on its Series C Cumulative Convertible Preferred Stock of $0.20 per share, which was payable on July 1, 2010 to shareholders of record as of June 15, 2010.
“We are
pleased with our development progress and continued overall financial
improvements in the second quarter of 2010.
We believe the Company is positioned for profitable growth in a
prolonged environment of consumer austerity with high levels of
unemployment,” said Meritage CEO,
S
ix Months 2010 Highlights- Sales for the six months ended July 4, 2010 increased 31.1% to $38.8 million compared to sales of $29.6 million for the same period last year.
- Income from Operations increased 106.9% to $1,366,000 compared to $660,000 for the same period last year.
- Net Earnings increased 645.0% to $1,394,000 compared to $187,000 for the same period last year.
- Consolidated EBITDA (a non GAAP measure) increased 41.2% to $2.2 million in 2010 compared to $1.5 million in 2009.
The Company remains
encouraged by the long term prospects for the Wendy’s brand, lead by the new
management teams at Wendy’s/Arby’s Group, and the new Quality Supply Chain
Co-op. The Supply Chain Co-op
began operations in 2010 with 91% of the Wendy’s restaurants in
Meritage is one of the nation’s premier franchise operators, currently
operating 73 quick service and casual dining restaurants.
The company specializes in the development and operation of
restaurant and leisure properties.
The company is headquartered in
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
MERITAGE HOSPITALITY GROUP ANNOUNCES RESULTS OF
2010 ANNUAL MEETING OF
STOCKHOLDERS
The Company’s stockholders voted to elect seven
directors:
Meritage Hospitality Group Inc. is one of the nation’s
premier hospitality operators, currently operating 73 restaurants in the QSR
and casual dining segments.
Meritage employs approximately 2,100 people in its hospitality operations.
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
MERITAGE
REPORTS FIRST QUARTER 2010 RESULTS;
First
Quarter Financial Highlights
- Sales increased 42.8% to $18.9 million from $13.2 million for the same reported period last year.
- Income from Operations increased to $431,000 compared to a loss of $129,000 for the same reported period last year.
- Net Income was $550,000 compared to a net loss of $420,000 for the same reported period last year.
- Consolidated EBITDA (a non-GAAP measure) increased 141.7% to $841,000 from $348,000 for the same reported period last year.
“We continued to deliver significant earnings improvements in the first
quarter of 2010, despite continued historically high unemployment in our
markets. We remain
optimistic about the Wendy’s brand revitalization under its new
leadership, and the 2010 launch of a new supply chain for the Wendy’s
system. Wendy’s is testing a
new high quality breakfast and initiating a major international
expansion as future growth drivers for the system.
Our focus remains on driving operational excellence and margin
improvements in our franchised restaurant portfolio.
We are aggressively seeking growth opportunities where we can add
value through our disciplined operating practices and back-of-house
operating systems,” stated
About
Meritage
Meritage is one of the nation’s premier franchise operators, currently
operating 73 quick service and casual dining restaurants.
The company specializes in the development and operation of
restaurant and leisure properties.
The company is headquartered in
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
MERITAGE REPORTS POSITIVE FISCAL 2009 EARNINGS; BUSINESS OUTLOOK CONTINUED IMPROVEMENT IN 2010
2009 Fiscal
Highlights
- Sales increased 19% to $69.1 million from $58.1 million in 2008.
- Income from operations increased to $2.1 million compared to a loss of $153,000 last year.
- Net Income increased to $930,000, compared to a loss of $696,000 last year.
- Consolidated EBITDA (a non-GAAP measure) increased 79% to $3,945,000 compared to $2,205,000 in 2008.
- The company expanded its restaurant base with the acquisition of 20
Wendy’s restaurants in
“We delivered consistent
earnings improvement throughout the year, despite operating in a challenging
consumer environment,” stated
Fourth Quarter
Highlights
- Sales increased 30.9% to $19.1 million compared to $14.6 million in 2008.
- Earnings from operations were $387,000 compared to $145,000 same period last year, an increase of 167%.
- Net earnings were $241,000 compared to a loss of $91,000 same period last year.
- EBITDA (a non-GAAP measure) increased to $971,000 compared to $92,000 in 2008.
2010 Business Outlook:
Unprecedented Times and Opportunities
The Wendy’s franchise system continues to focus on brand revitalization such
as new product innovation and operational excellence.
Beginning January 1, 2010 a new purchasing co-op was launched to
optimize cost savings of goods and services to the entire Wendy’s restaurant
system, with the goal of expanding margins at the restaurant level.
Wendy’s is testing and planning for the re-launch of a unique high
quality breakfast menu.
Breakfast accounts for 23% of the QSR industry traffic, but only 2% for
Wendy’s total sales today. The
Wendy’s system-wide goal is to return restaurant operating margins to the
16%-17% level, which has positive implications for our franchise business
model. In addition, Wendy’s has
completed a comprehensive analysis and determined potential for 8,000
restaurants outside of
“We are operating in unprecedented economic times for
About Meritage
Operating 73 quick service and casual dining restaurants, Meritage is one of
the nation’s premier franchise operators, specializing in the development
and operation of restaurant and leisure properties.
The company is headquartered in
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
MERITAGE HOSPITALITY GROUP INC. CHANGES ITS OPERATING FISCAL YEAR END
Meritage is changing its fiscal year end from the Sunday closest to November 30th each year to the Sunday closest to December 31st. The company will still operate on a 52/53 week fiscal period. In order to make the transition to the new year-end the company will have a short stub reporting period from Monday, November 30, 2009 to Sunday, January 3, 2010. The 2010 fiscal year will be a 52 week period beginning on Monday, January 4, 2010 and ending on Sunday, January 2, 2011.
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
MERITAGE REPORTS THIRD QUARTER 2009
RESULTS; STRONG SALES & NET INCOME GROWTH
Third Quarter 2009 Highlights
- Sales increased 33.8% to $20.4 million from $15.3 million in the third quarter of 2008.
- Income from operations improved $774,000 to $1,105,000 from $361,000.
- Net income increased to $502,000 from a third quarter 2008 loss of $3,600.
- Consolidated EBITDA (a non-GAAP measure) increased 55.1% to $1.4 million from $925,000.
- The Company included its first full operating quarter of 20 Wendy's restaurants acquired in Jacksonville, Florida.
- The Company continued to generate strong operating cash flows, increasing cash on hand to $3.3 million.
“Meritage
continued its financial improvement in the third quarter of 2009 driven by
cost containment, store growth, easing commodity costs, and a successful new
Wendy’s product launch. We
continue to experience improved margins and profit flow-through from our
Wendy’s operations,” stated Meritage CEO,
Nine Month
2009 Highlights
- Sales increased 15.1% to $50.0 million from $43.5 million.
- Income from operations was $1,766,000 compared to a net loss of $236,000 in 2008.
- Net income was $689,000 compared to a net loss of $605,000 for the same period last year, even though the nine months of 2008 included a $717,000 one-time gain from the sale of real estate.
- Consolidated EBITDA increased 40.8% to $2,974,000 compared to $2,113,000 in 2008.
Business Outlook
The new management team at Wendy’s International is delivering on its
initial promises to the Wendy’s franchise system beginning with a successful
new product launch of boneless chicken wings in June 2009.
Looking ahead, we believe that Wendy’s has a strong new product pipe
line and is focused on margin growth at the Wendy’s unit level.
Returning Wendy’s restaurants
back to historical 16%-17% margins has profound positive implications on the
Company’s business model.
“We continue to focus on driving operational excellence and margin
improvement in our Wendy’s portfolio.
Additionally, we see potential future growth opportunities for
Meritage in the Wendy’s system which could substantially enhance shareholder
value”, added Mr. Schermer.
About Meritage
Operating 73
quick service and casual dining restaurants, Meritage is one of the nations
premier franchise operators, specializing in the development and operation
of restaurant and leisure properties.
The company is headquartered in
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
MERITAGE
REPORTS SECOND QUARTER 2009 RESULTS
STRONG SALES & NET INCOME GROWTH
Second Quarter 2009 Highlights
- Sales increased 10.8% to $16.4 million from $14.8 million in the second quarter of 2008.
- Income from operations grew to $789,000 from $81,000 in the second quarter of 2008.
- Net income increased to $607,000 from $191,000 in the second quarter of 2008.
- Consolidated EBITDA (a non GAAP measure) increased to $1.2 million from $916,000.
-
The Company completed the acquisition of 20 Wendy’s restaurants in
- The Company generated strong operating cash flows during the period increasing cash on hand to $2.5 million.
“Meritage
experienced significant financial improvements in the second quarter,
despite a subdued consumer spending environment. Driven by cost containment, new store growth through acquisition and
easing commodity costs, our results are exceeding our 2009 plan,” said
Meritage CEO, Robert E. Schermer, Jr. Second quarter and six month 2009 results included five weeks of the
recent acquisition of 20 Wendy’s restaurants in
Sales for the six months ended May 31, 2009 were $29.6 million compared to sales of $28.2 million for the same period last year.
Income from operations for the six months ended May 31, 2009 were $660,000 compared to a net loss of $664,000 for the same period last year. Additionally, net earnings improved to $187,000 compared to a net loss of $601,000 for the same period last year, which also included a $684,000 gain from the sale of real estate.
Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the six months was $1.5 million compared to $1.2 million in 2008, an increase of 29.6%.
The Company remains encouraged by the prospects for the Wendy’s brand, as
the new management team at Wendy’s/Arby’s Group works on the formation of
the supply chain cooperative and restaurant level operating margins of the
Wendy’s system. Returning
Wendy’s restaurant margins back to historical 16%-17% margins has profound
positive implications on the Company’s business model.
Meritage Hospitality Group Inc. specializes in the development
and operation of restaurants and leisure properties and
currently operates 73 quick-service and casual dining
restaurants. The Company
is headquartered in
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
MERITAGE HOSPITALITY GROUP ANNOUNCES RESULTS OF
The Company’s stockholders voted to re-elect the six current directors: James P. Bishop, Charles E. Chamberlain, Jr., Duane F. Kluting, Joseph L. Maggini, Robert E. Schermer, Sr. and Robert E. Schermer, Jr. Each director will serve until the 2010 Annual Shareholders’ Meeting.
Robert E. Schermer, Jr., Chief Executive Officer of Meritage Hospitality Group Inc., stated, “On behalf of the entire Board of Directors and management team, we wish to thank our stockholders for their overwhelming unity, confidence and positive support. We share their goals as major shareholders ourselves, as we continue to execute on our stated plans for restaurant margin improvement at the Wendy’s brand, growth and diversification. The Company is well-positioned for a significant sales and earnings growth cycle, through recent acquisitions and cost reductions. We look forward to communicating our progress in the quarters ahead as we return to positive results in 2009”.
Meritage Hospitality Group Inc. is one of the
Nation’s premier hospitality operators, currently operating 73
restaurants in the QSR and Casual Dining segments.
The Company is a partner in a potential future international
mixed-use development in the
SAFE HARBOR STATEMENT
MERITAGE REPORTS ACQUISITION OF 20 WENDY’S RESTAURANTS IN JACKSONVILLE, FLORIDA
Robert E. Schermer, Jr., President and CEO of Meritage Hospitality
Group Inc., stated, “We believe the fundamentals in the
quick-service restaurant industry remain positive and Jacksonville
represents a strong entry point for Meritage in to the Southeastern
U.S. market.” The 20
Wendy’s restaurant units make up approximately 35% of the Wendy’s
located in the
The Company plans to immediately begin an extensive thirty-six month capital improvement plan, which includes the installation of operating and accounting systems, as well as exterior and interior re-imaging of the Wendy’s restaurants.
“The Wendy’s restaurant system is undergoing a comprehensive
multi-year plan to restore restaurant margins back to historical
levels, which has profound positive implications to our business
model and the entire Wendy’s franchise system,” added Mr. Schermer.
The
Meritage Hospitality Group Inc specializes in the operations and
development of restaurants, hotels and leisure properties.
Meritage is headquartered in
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
MERITAGE
REPORTS IMPROVED FISCAL 2008 RESULTS;
The Company reported fiscal 2008 sales of $58.0 million, a 2.1% decrease
compared to fiscal 2007.
Fiscal 2007 included a favorable accounting period of 53 weeks compared
to 52 weeks in 2008. The
2008 reported net loss of $696,000 represents an improvement of 35%
compared to the net loss of $1,074,000 in 2007.
The 2008 results improved, which included expenses of
approximately $808,000 associated with the Company’s restructuring and
other fourth quarter charges.
Management believes that restructuring and other implemented cost
reduction initiatives will save an additional $1.5 million annually,
returning the Company to profitability in 2009.
In
September 2008, the Wendy’s brand went through a major transition,
merging with Triarc Companies, Inc. (the franchisor of the Arby’s
restaurant system) to form a new entity, Wendy’s/Arby’s Group, Inc.
“The positive news is that we feel we have a Wendy’s management
team focused on the brand, with a comprehensive multi-year plan to
restore restaurant margins back to the historic 16%-17% levels.
The new management team has put forth a business plan with margin
improvement targets of +500 bps over the next 36 months, much of which
applies to the franchise units as well as the corporate units”, stated
Mr. Schermer.
“It
is early in the process, but I am very encouraged by the potential for
the Wendy’s brand, which has been considered by many analysts to be the
great “under-earner” for a number of years in the quick-service
restaurant industry. The
franchise system is finally working together to fix the supply chain
system and address restaurant margin potential.
Returning Wendy’s margins back to the historical 16% - 17% has
profound positive implications to our business and the franchise
system,” added Mr. Schermer.
In
other hospitality matters the Company, along with its partners in a
Bahamian investment, are planning to proceed with a capital raise in
2009 to fund phase one of a residential resort property.
Our
goal is to return to positive net earnings in 2009.
Additionally, the Company may realize financial benefits from
other developments in 2009.
Meritage Hospitality Group Inc. is a hospitality management Company that
has specialized in the operations and development of restaurants, hotels
and leisure properties.
Meritage is headquartered in
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
MERITAGE
ANNOUNCES COST SAVINGS INITIATIVES
“The
pro-active cost savings plan will strengthen Meritage’s ability to
manage through the most challenging and unpredictable economic
environment in decades” stated Meritage CEO, Robert Schermer, Jr.
Ideally this savings plan will
position the Company to be less reliant on outside lenders for organic
growth and investment. We have
seen several of the industry’s largest lenders announce significant
reductions or freezes on lending until 2009 or later subject to credit
market conditions. Our plan is
designed to improve cash flow and position Meritage to take advantage of
future opportunities in the hospitality industry as conditions improve.
Meritage
is one of the nation’s premier hospitality operators, currently operating 53
restaurants in two brands: 49 Wendy’s restaurants in the quick service
restaurant segment and 4 O’Charley’s restaurants in the casual dining
segment. The Company is a venture
partner in a future international upscale leisure and mixed-use resort
development in the
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
MERITAGE REPORTS SECOND QUARTER RESULTS; SECOND QUARTER PROFIT
GRAND RAPIDS, Michigan, June 26, 2008. Meritage Hospitality Group Inc. (OTCQX: MHGU), one of the nation’s premier franchise operators, today announced net sales for the second fiscal quarter ended June 1, 2008 were $14.8 million, compared to $14.6 million during the same period last year. Meritage reported net income of $191,000 for the quarter, compared to a net loss of $362,000 for the same period last year. Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the period was $916,000 compared to $514,000 in the same period of fiscal 2007, an increase of 78.2%.
Sales for the six month period ended June 1, 2008, were $28.2 million compared to sales of $28.5 million during the same period last year. Meritage reported a net loss for the six month period of $601,000, compared to a net loss of $1,158,000 for the same period last year. Consolidated EBITDA for the six months was $1.19 million compared to $665,000 in the same period of 2007, an increase of 78.6%.
Gary Rose, Meritage’s Vice President & Chief Financial Officer, stated, “Our second quarter profit was largely due to improved operating performance, the recognized gain on the sale of the a newly constructed retail center, and an income tax refund from a prior year.”
In late April, Wendy’s and Arby’s parent company (Triarc Companies) announced a merger agreement between the two companies. While this merger will not change the Wendy’s brand, we are hopeful that leadership under future CEO, Roland Smith, will help the Wendy’s franchise system experience improved restaurant margins that brings Wendy’s closer to the industry average of 15%. Mr. Smith stated his intention to pursue expansion focused on breakfast and new unit growth. He also aims to improve margins significantly in the Wendy’s company-owned stores, and develop synergies and efficiencies between the brands including possible dual-concept development in high-cost real estate markets.
The Company previously reported that it became a venture partner in a new resort development in the Bahamas managed by Jorge Perez and Steven M. Ross, founders of The Related Group. The development includes an upscale leisure and mixed-use resort opportunity including a marina, golf course, oceanfront lots and high-end hotels operated by international luxury hotel operators. Meritage will focus on real estate sales and marketing, as well as development services.
Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands: Wendy’s in the quick service restaurant segment and O’Charley’s in the casual dining segment. The Company employs over 2,000 Michigan residents.
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
MERITAGE
ANNOUNCES INTERNATIONAL DEVELOPMENT VENTURE
Under the joint venture,
Meritage and The Related Group are planning to co-develop an
ultra-luxury destination resort community on
In addition to participating
in the sales and marketing and development fees related to the overall
project, Meritage holds a 23.75% stake in the entity that holds the property
interest in the 884-acre oceanfront property.
Meritage’s interest in the joint venture entity will be half of this
percentage, and will be subject to future dilution related to financing
requirements or new equity partners.
Mr. Schermer stated, “Related is currently finalizing the master plan
and development schedules. Once
this is completed, a project launch should follow the sub-division permits
which traditionally take twelve months after land closing to engineer and
process. This development effort
is a watershed event for our Company as well as the citizens of
(Listed from left to right:
Jorge Perez-Chairman of The Related Group,
Right Honourable Hurbert
Ingram- Prime Minister of The Bahamas,
Robert Schermer-CEO,
Meritage Hospitality Group,
Mike Maier-President, Rockford Development)
About The Related Group
The Related Group is the
nation’s finest developer and manager of premier real estate properties.
The combined Related companies have developed over $25 billion worth
of real estate developments.
This level of activity sets Related apart from its competitors and its
developments set the standard for excellence within the real estate
industry. A combination of
passion for quality, forward thinking, experience, imagination and the skill
to build market-leading properties has made them a world-renowned
development company. New
projects include large-scale, multi-family developments as well as luxury
high-rise and innovative mixed-use buildings.
In addition to its North American and
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
MERITAGE
REPORTS PRELIMINARY FISCAL 2007 RESULTS; PROVIDES
YEAR-END BUSINESS REVIEW
Preliminary Financial Results
Net sales for the fourth quarter ended December 2, 2007
increased 7.8% to $15.4 million, compared to $14.3 million in the same
period last year. In 2007, the
fourth quarter and fiscal year end results were favorably impacted by a
fiscal year accounting period of 53 weeks compared to 52 weeks in 2006.
The Company reported a net loss of $9,000 for the quarter compared to
a net loss of $2.1 million for the same period last year.
Consolidated EBITDA for the quarter was a positive $1.0 million
compared to a negative $940,000 in the same period last year.
In the 2006 fourth quarter, the Company accrued $1.3 million
associated with the closing of one of the Company’s O’Charley’s restaurants
in
For the
2007 fiscal year, net sales were a record $59.3 million compared to $57.6
million in fiscal 2006, an increase of 2.9 %.
The Company reported a net loss of $1.1 million compared to a net
loss of $4.6 million in fiscal 2006, a $3.5 million improvement for the
year. Consolidated EBITDA for
the fiscal year was $2.8 million compared to $700,000 last year, a 300%
increase.
Commenting on the results, CEO Robert E. Schermer, Jr. stated, “In 2007 we
faced a tough retail environment in
2007 Business Review
Mr.
Schermer Jr. continued, “Our improved operating results in 2007 are largely
due to operating efficiencies and a reduced cost structure in our franchised
restaurant business. We started
2007 by facing a 40% increase in the
Annual sales increased 2.9% to a record $59.3 million.
Consolidated EBITDA increased 300% to $2.8 million.
Net earnings improved $3.5 million with improved results in each quarter compared to the prior year.
Wendy’s same store sales increased 1.0% for the fiscal year.
Meritage shareholders overwhelmingly approved a delisting and deregistration transaction designed to save costs associated with the Sarbanes Oxley Act.
We were a founding company on the OTCQX (under the symbol MHGU) - a new premium listing service intended to provide a premier trading, quotation and disclosure market for Meritage’s shareholders.
Our operations executed well against key controllable operating metrics.
Our Wendy’s restaurant portfolio maintained its 100% Sparkle Certified status - an independent restaurant grading/evaluation system used by Wendy’s International.
This year’s American Customer Satisfaction Index (ACSI) survey, produced by the University of Michigan’s Stephen M. Ross Business School, rated Wendy’s number one for customer satisfaction in the “Limited Service Restaurant” category.
The Company hired investment banking firm Stifel Nicholas to advise on value-creating strategic options. The advisory engagement is progressing.
Other
important strategic developments in 2007 include:
-
The Company received approvals from the Bahamian government to acquire and develop two oceanfront parcels on
The 884-acre development received approval in principal from the National Economic Council of the
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.
GRAND RAPIDS, Michigan,
January 25, 2008. Meritage
Hospitality Group Inc. (Pink Sheets: MHGU), one of the nation’s premier
franchise operators and employer of 2,000 Michigan residents through its
subsidiaries, today announced it has raised over $115,000 this past holiday
season for the benefit of children’s organizations throughout West Michigan.
On behalf of its customers at its 49 Wendy’s restaurants and two West
Michigan O’Charley’s restaurants, Meritage raised most of its contribution
through 50¢ per order donations to its “Change a Child’s Life Program.”
“Together with Regent
Broadcasting, our radio sponsors and partners, our restaurants served as a
collection point for the generosity of our
Following examples set forth
by renowned West Michigan philanthropic leaders such as the DeVos and Van
Andel families, we have been blessed to have the ability to give back to our
communities and support these wonderful children organizations in
Mr. Schermer added, “With
Michigan facing an unprecedented seven-year single state recession, our
children charities have been hurt financially with fewer donations, while
the demand for children’s services increases.
Meritage has developed a corporate culture of giving back to the
communities where we live and work.
The ‘Change a Child’s Life Program’ is our opportunity to help serve
those who cannot serve themselves.” Through
its “Change a Child’s Life Program” Meritage has raised over $1,000,000
since the program’s inception in 1997.
Charitable organizations that Meritage has supported or will be
supporting include:
|
The St. John’s Children’s Home |
Gilda’s Club |
|
DeVos Children’s Hospital |
|
|
Dave Thomas Adoption Foundation |
Make A Wish Foundation |
|
|
Griffins Youth Foundation |
|
St. Jude’s |
Salvation Army Booth Family Services |
|
Leukemia & Lymphoma Society |
Gryphon Place |
|
Juvenile Arthritis Foundation |
Dwelling Place of |
|
|
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Bethany Christian Services |
Wedgewood Christian Services |
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Potters House |
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The Twin Cities Jaycees |
WGVU – Kid Day at the Zoo |
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DA Blodgett for Children |
Boys & Girls Club |
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Catholic Social Services |
Kids Food Basket |
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Lutheran Social Services of |
South Haven Memorial Library |
Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands: Wendy’s in the quick service restaurant segment and O’Charley’s in the casual dining segment.
MERITAGE RELEASES THIRD QUARTER RESULTS;
Sales for the nine month period
ended August 26, 2007,
were $43.9 million compared to $43.3 million during the same period last
year. Meritage reported a net
loss for the nine month period of $1.1 million, compared to a net loss of
$2.5 million for the same period last year.
Consolidated
EBITDA for the nine months was $1.81 million compared to adjusted
consolidated EBITDA of $1.44 million in the same period of 2006.
The Company continues to
evaluate plans to engage in the development of oceanfront property on the
Meritage is one of the
nation’s premier franchise operators, currently operating 53 restaurants in
two brands: Wendy’s in the quick service restaurant segment and O’Charley’s
in the casual dining segment.
MERITAGE
COMMENCES CONSTRUCTION ON
GRAND
RAPIDS, Michigan, August 30, 2007.
Meritage Hospitality Group Inc. (Pink Sheets: MHGU), one of the nation’s
premier hospitality companies and only publicly traded Wendy’s and
O’Charley’s restaurant franchisee, announced the commencement of
construction on the Standale Retail Center located in the City of Walker,
Michigan. The
“Standale continues to be an area of strong retail growth, and has been a
steady long-term performer for the Company’s restaurant business.
In addition, Grand Valley State College enrollment continues to grow
adding to retail demand in the surrounding community,” stated Robert Potts,
Vice President of Real Estate. The
Company anticipates opening the
Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment.
MERITAGE
ENGAGES STIFEL NICOLAUS FOR FINANCIAL ADVISORY SERVICES
GRAND
RAPIDS, Michigan, August 20, 2007.
Meritage Hospitality Group Inc. (Pink Sheets: MHGU), one of the
nation’s premier hospitality companies and only publicly traded Wendy’s and
O’Charley’s restaurant franchisee, announced that the Company’s Board of
Directors has engaged Stifel, Nicolaus & Company, as its exclusive financial
and strategic advisor to assist the Company in evaluating strategic options.
“Consistent with our previously stated goals, we have engaged Stifel
Nicolaus to investigate and advise the Company on value-creating
alternatives,” said Robert E. Schermer Jr., Meritage’s Chief Executive
Officer and President. “We
believe that Stifel Nicolaus’ in-depth coverage of the restaurant industry
makes them well qualified to assist Meritage in achieving our short-term and
long-term goals,” Mr. Schermer added. Stifel,
Nicolaus & Company, Incorporated, a subsidiary of Stifel Financial Corp.
(NYSE:SF), is a nationally recognized, full service investment banking firm
specializing in capital raising, advisory, merger and acquisition related
services.
There
is no assurance that retaining Stifel Nicolaus as a strategic advisor will
result in any transaction being consummated.
In addition, the steps announced today do not preclude the
possibility of the Company pursuing other strategic alternatives in the
future.
Meritage is one of the
nation’s premier franchise operators, currently operating 53 restaurants in
two brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining
Segment.
MERITAGE TO
EXPLORE STRATEGIC OPTIONS INCLUDING
“Consistent with our previously stated goals, we intend to investigate value-creating alternatives for our shareholders who are interested in a liquidity event,” said Robert E. Schermer Jr., Meritage’s Chief Executive Officer and President. “A recapitalization could produce several benefits such as a better legal and tax structure, shareholder liquidity and new capital for business growth. We intend to move forward by retaining a strategic advisor to assist us in this review,” Mr. Schermer stated.
Mr.
Schermer added, “A private equity scenario appears preferable as it would
provide the Company with more flexibility to pursue a wide array of growth
options in the Wendy’s system.”
Wendy's took the top spot for customer satisfaction in the “limited service
restaurants” category in this year’s American Customer Satisfaction Index
survey, which is produced by the
There is
no assurance that the Company will retain a strategic advisor on
satisfactory terms or that retaining a strategic advisor to assist us in our
review will result in any changes to the Company’s current structure, or
that any transaction will be consummated. In addition, the steps announced today do not preclude the
possibility of the Company pursuing other strategic alternatives in the
future.
Meritage is one of the nation’s premier franchise
operators, currently operating 53 restaurants in two brands; Wendy’s in the
QSR Segment and O’Charley’s in the Casual Dining Segment.
In addition, the Company is exploring
other franchise opportunities including oceanfront hospitality developments
on the
MERITAGE
REPORTS PRELIMINARY FISCAL 2006 RESULTS;
PROVIDES 2007
BUSINESS OUTLOOK
O’Charley’s of
Meritage recently announced that it settled the lawsuit it filed last year
against O’Charley’s Inc., the franchisor of the Company’s O’Charley’s
business segment.
Wendy’s of
In
fiscal 2006, the Wendy’s franchise system went through many substantive
changes. In December 2006, Meritage opened its 49th Wendy’s restaurant in
In
fiscal 2007, we are focusing on (i) maintaining a 100% “Sparkle Certified”
Wendy’s restaurant system, (ii) a same store sales increase of 4.5%, (iii)
opening one or two new Wendy’s restaurants, and (iv) increased restaurant
operating income through continued margin enhancements.
Meritage’s previously announced plans regarding the development of
oceanfront properties on the
These projects would position Meritage for a “graduated development opportunity” in terms of the size and scale of the hospitality real estate projects. Accordingly, we intend to partner with a broad spectrum of financially strong and experienced development partners and hospitality brands. This includes (i) proven construction and design partners, (ii) strong brand operators and management companies, and (iii) capable real estate capital partners. Mr. Schermer continued, “While Meritage’s role will vary from project-to-project, we hope these projects will provide opportunities to generate development fees, real estate sales and marketing fees, and land inventory appreciation. The total land inventory is estimated to cover 8 to 10 years of development, subject to absorption rates.”
Summary
Our
goal in 2007 is to return Meritage to sustained restaurant profitability,
and to provide liquidity and cash distributions to our shareholders.
We have already reduced overhead by approximately $1.0 million which
should be fully realized in fiscal 2007.
Meritage has historically created its greatest economic value through
the development of restaurant and hospitality (including hotels and marinas)
real estate. Today, we are
diversifying our business efforts by moving outside of
Meritage is one of the nation’s premier franchise operators, currently
operating 53 restaurants in two brands; Wendy’s in the QSR Segment and
O’Charley’s in the Casual Dining Segment. Meritage also is engaged in real
estate opportunities on the
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MERITAGE ASSIGNED NEW TRADING SYMBOL
Meritage is
one of the nation’s premier franchise operators, currently operating 53
restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the
Casual Dining Segment. Headquartered in
MERITAGE NOW TRADING ON PINK SHEETS;
As a result of the stock splits, effective January 23, 2007, Meritage’s common
shares are quoted on the Pink Sheets under the symbol MHGP.PK.
In addition, the Company has made
application to the OTCQX – a new premium listing service offered by Pink Sheets
that is intended to provide a premier trading, quotation and disclosure market
for Meritage’s common shareholders.
This new premium tier listing will commence trading on March 5, 2007.
Meritage is one of the nation’s premier franchise operators, currently operating
53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the
Casual Dining Segment. Headquartered in MERITAGE REPORTS SETTLEMENT OF O’CHARLEY’S LITIGATION GRAND RAPIDS, Michigan, February 9, 2007. Meritage Hospitality Group Inc. (MHGP.PK), one of the nation’s premier hospitality companies and only publicly traded Wendy’s & O’Charley’s restaurant franchisee, today announced it settled the lawsuit filed last year against O’Charley’s Inc., the franchisor of the Company’s O’Charley’s of Michigan business segment. Under terms of the agreement, which are confidential, Meritage will continue operating its O’Charley’s restaurants in Michigan and will also continue to evaluate expansion of the brand at new locations that have solid demographic profiles and population growth. Robert E. Schermer Jr., the Company’s CEO, stated, “We believe this settlement is a ‘win-win’ for Meritage, O’Charley’s Inc. and all stakeholders in the O’Charley’s restaurant system. One of Meritage’s main focuses is to strengthen the O’Charley’s brand presence in Michigan so that more people can discover O’Charley’s high-quality food and customer service at casual dining prices.” O’Charley’s Inc. is a leading multi-concept restaurant company that operates or franchises a total of 362 restaurants under three brands: O’Charley’s, Ninety Nine Restaurants and Stoney River Legendary Steaks. The O’Charley’s concept includes 238 restaurants in 18 states in the Southeast and Midwest, including the five franchised restaurants in Michigan. O’Charley’s is best known for the freshness and homemade quality of its food, including several specialty items such as hand-cut and aged steaks, a variety of seafood and chicken, freshly baked yeast rolls, and fresh salads with special-recipe salad dressings.
Meritage is one of the nation’s premier franchise operators, currently operating
53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the
Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has
approximately 2,000 employees. In addition, the Company has announced plans to
engage in the development of waterfront hospitality development opportunities on
the island of Eleuthera, Bahamas. The development is subject to permits, the
economic feasibility of the project and various conditions. MERITAGE TO MAKE APPLICATION FOR OTCQX LISTING: A NEW PREMIUM LISTING SERVICE OFFERED FOR OVER-THE-COUNTER SECURITIES ETS DATE FOR A SPECIAL MEETING OF SHAREHOLDERS GRAND RAPIDS, Michigan, January 9, 2007. Meritage Hospitality Group Inc. (AMEX: MHG), today announced that it intends to make application to the OTCQX – a new premium listing service offered by Pink Sheets that is intended to provide a premier trading, quotation and disclosure venue for over-the-counter securities in the U.S. markets. This new premium tier listing will commence trading on March 5, 2007. The OTCQX provides issuers with an efficient and robust platform to list their securities and access secondary market equity. The OTCQX is specifically designed to meet the needs of smaller companies that were listed on a national exchange (such as the AMEX or Nasdaq) that are now looking for a reporting mechanism more customized to their needs. Meritage is holding a special meeting of shareholders at 10:00 a.m. on January 23, 2007 wherein a going private transaction (by means of a 1-for-300 reverse stock split followed by a 300-for-1 forward stock split) will be voted on by Meritage shareholders. If approved, the Company will withdraw its listing of common shares on the American Stock Exchange (the AMEX) and terminate registration of its common shares with the U.S. Securities and Exchange Commission. Meritage is taking these steps to avoid the ever increasing public company costs (including Sarbanes-Oxley Act costs) that the Company believes disproportionately affect smaller publicly traded companies. Under the new OTCQX premium platform, the Company would, among other things, continue to provide ongoing quarterly and annual financial statements, disclose interim material events, conduct annual audits, provide management certifications, and conduct annual shareholder meetings. James R. Saalfeld, Meritage’s Vice President and Chief Administrative Officer, stated, “The new premium OTCQX platform comes at a perfect time for Meritage as it would allow us to avoid the high costs of being a publicly traded company while still providing our shareholders with a premier trading, quotation and disclosure venue for our securities.” Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees.
MERITAGE PROCEEDING WITH DEREGISTERING TRANSACTION; SETS DATE FOR A SPECIAL MEETING OF SHAREHOLDERS GRAND RAPIDS, Michigan, December 20, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), today announced plans to withdraw from listing its common shares on the American Stock Exchange (AMEX) and to terminate registration of its common shares with the U.S. Securities and Exchange Commission (SEC). The Company is taking these steps as part of a going-private transaction intended to avoid public company costs including Sarbanes-Oxley Act costs that the Company believes disproportionately affect smaller publicly traded companies. In light of this delisting and deregistration process, the Company will no longer file current and periodic reports with the SEC, although the Company will continue to communicate with its investors as a private company. The Company intends to maintain a market in its common shares by having the shares listed on a quotation service that does not require an issuer to be registered with the SEC such as the Pink Sheets, but currently has no arrangement for listing in place. If approved by shareholders at a special meeting of shareholders set for 10:00 a.m. on January 23, 2007, the going private transaction would be effected through a 1-for-300 reverse stock split followed by a 300-for-1 forward stock split. Shareholders owning less than one share after the reverse stock split would receive a cash payment of $5.25 per share as calculated on a pre-reverse stock split basis. Meritage filed notice with the AMEX today commencing the process of voluntarily withdrawing its common shares from listing. The Company expects that the delisting of its common shares on the AMEX will be effective on or about the date of the Company’s special meeting of shareholders, even if the stock split transactions are not approved by Meritage’s shareholders at the special meeting. This press release is only a brief description of a proposed transaction and is not a solicitation of a proxy or an offer to acquire any shares of common stock. Meritage has filed a Proxy Statement and Schedule 13E-3 with the SEC outlining the transaction. Shareholders are advised to read the definitive Proxy Statement and Schedule 13E-3 carefully because these documents contain important information about the special meeting and the proposed transaction, including information about the mechanics of the proposed transaction, persons soliciting proxies, and their interests in the transaction. Shareholders may obtain a free copy of the Proxy Statement and Schedule 13E-3 at the SEC's web site at http://www.sec.gov or in the Investor Information section of Meritage’s website at http://www.meritagehospitality.com. Meritage is also mailing a copy of the definitive Proxy Statement to its shareholders entitled to vote at the special meeting. The Company and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders in favor of the proposed transaction. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of the Company and its executive officers and directors in the proposed transaction by reading the Proxy Statement. Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees.
MERITAGE ANNOUNCES PLANS FOR HOSPITALITY DEVELOPMENT ON ELEUTHERA ISLAND , BAHAMAS GRAND RAPIDS, Michigan, August 17, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), one of the nation’s premier franchise operators, today announced plans to engage in the development and sale of a condominium hotel on waterfront property on the island of Eleuthera in the Bahamas. Meritage has tentatively agreed to acquire several acres of waterfront property on the island of Eleuthera, and has entered into a letter of intent with Tecton Hospitality, a hotel management company based in Miami, Florida, to operate a planned 78-unit national brand extended stay condominium hotel. Meritage anticipates that it will pre-sell condominium hotel investment units through Marcus & Millichap, a real estate investment brokerage company headquartered in New York City. Robert E. Schermer, Jr., Meritage’s Chief Executive Officer, stated, “We are excited about our development opportunities on Eleuthera - one of the most pristine and unique islands in the Bahamas. I see this as a natural extension of our previous hotel and marina dockominium development experience, combined with our real estate development and sales experience in our current business.” Meritage expects to utilize its existing relationships with its contractors and development teams which have assisted the Company build over thirty-five retail properties during the past seven years and which have experience in similar developments. Condominium and investment real estate would be pre-sold through Marcus & Millichap in the United States and through local Bahamian brokers. The Company is also evaluating development, sales and marketing participation in a large upscale leisure and lifestyle oriented planned residential resort opportunity on Eleuthera, which plans include two ultra-luxury condominium hotels, a marina, golf course and oceanfront estate lots. Mr. Schermer added, “From my perspective, the ‘rational rich’ baby boomers are looking for upscale, unique experiences two flights from home. Eleuthera today is like Hawaii was 35 years ago - with world class scuba diving, sport fishing, and beaches all in a pristine ecological environment which is vigorously protected.” Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees.
MERITAGE REPORTS SECOND QUARTER RESULTS, GRAND RAPIDS, Michigan, June 30, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and the first O’Charley’s franchisee, today announced net sales for the second fiscal quarter ended May 28, 2006 increased 8.1% to $15.2 million, compared to $14.0 million during the same period last year. Meritage reported a net loss for the quarter of $0.7 million or $0.15 per share, compared to a net loss of $1.0 million or $0.21 per share for the same period last year. Sales for the six month period ended May 28, 2006 increased 6.3% to $28.7 million compared to $27.0 million during the same period last year. Meritage reported a net loss for the six month period of $2.0 million or $0.42 per share, compared to a net loss of $2.8 million or $0.59 per share for the same period last year. Trends have improved at the Wendy’s level as same store sales increased slightly in the second fiscal quarter, the first quarterly year-over-year increase since the third quarter of 2004. New menu items such as the Frescata Sandwich and three new salad offerings, along with the Company’s initiatives focused on improved local store marketing and advertising, are having a positive impact. Other new products are in the pipeline including a breakfast menu which Wendy’s International is planning to introduce in 2007. While the Company continues to face challenges such as increased fuel and energy costs, underperforming national brands and a sluggish state economy, Meritage is encouraged by Wendy’s new initiatives and renewed focus on franchisees’ profit margins which we believe has been aided by the formation of the Wendy’s Old Fashioned Franchise Association, an independent franchise group representing the interests of Wendy’s franchisees. The Company is hopeful that O’Charley’s Inc. will undertake similar measures to support and enhance its brand recognition and unit level sales in new markets. Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees.
MERITAGE HIRES INVESTMENT BANKER FOR POSSIBLE GRAND RAPIDS, Michigan, June 16, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and the first O’Charley’s franchisee, announced that it has engaged Donnelly Penman & Partners to act as the exclusive financial advisor to the Board of Directors in connection with a possible deregistering transaction. In April, the Company reported that it was resuming its investigation of a deregistering transaction which would allow it to avoid public company costs by no longer having to file reports under the Securities Exchange Act of 1934 or be listed on the American Stock Exchange. The Company is considering a reverse stock split that would reduce the number of record shareholders to a level that allows it to deregister from the SEC. Following such a transaction, the Company will use its best efforts to provide liquidity to the Company’s remaining shareholders. For example, the Company intends to maintain a market in its common shares by having the shares listed on a quotation service that does not require an issuer to be registered with the SEC such as the Pink Sheets, and will consider other transactions, such as an issuer tender offer, that may provide its shareholders with an opportunity to monetize a portion of their investment in Meritage. There can be no assurance that the Board’s investigation will result in any of these transactions. Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees.
MERITAGE ANNOUNCES STRONGER SALES WITH FRESCATA SANDWICH INTRODUCTION GRAND RAPIDS, Michigan, May 2, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and the first O’Charley’s franchisee, today reported that the Company is experiencing stronger sales with the introduction of Wendy’s new Frescata line of premium deli sandwiches. “The Frescata deli sandwiches have been well received by our customers who appreciate the exceptional quality and taste of the product,” stated Robert E. Schermer, Jr., Chief Executive Officer. “The Frescata menu line includes four premium deli sandwiches with high quality meats and distinctive sauces served on artisan bread. This product line opens up a whole new menu category for us and gives our customers another reason to visit Wendy’s. We are encouraged by other new products such as the new Garden Sensations salads, and the new promotions and products planned for later this year including two new nutritious Kids’ Meal sandwiches,” added Mr. Schermer. Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees. MERITAGE TO RESUME EXPLORATION OF DEREGISTERING TRANSACTION GRAND RAPIDS, Michigan, April 18, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and the first O’Charley’s franchisee, today announced that its Board of Directors is resuming its review of a possible going-private transaction which would result in the Company no longer filing reports under the Securities Exchange Act of 1934 or being listed on the American Stock Exchange. This move would allow Meritage to avoid public company costs including Sarbanes-Oxley Act costs that the Company believes disproportionately affect smaller publicly traded companies. There can be no assurance that the Board’s review will result in a going-private transaction. Meritage’s Chief Executive Officer, Robert E. Schermer, Jr. stated, “If Meritage proceeds with a going-private transaction, it would be our intention to maintain a market in the Company’s common shares by having the shares listed on a quotation service that does not require issuers to be registered with the SEC such as the Pink Sheets.” Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees.
MERITAGE REPORTS FIRST QUARTER 2006 RESULTS; 30th CONSECUTIVE QUARTER OF SALES GROWTH
GRAND RAPIDS, Michigan, March 29, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and the first O’Charley’s franchisee, today announced net sales for the first fiscal quarter ended February 26, 2006 increased 4.4% to $13.6 million, compared to $13.0 million during the same period last year. Meritage’s net loss for the quarter was $1,274,000 or $0.27 per share, compared to a net loss of $1,804,000 or $0.38 per share for the same period last year. Meritage’s Chief Executive Officer, Robert E. Schermer, Jr. stated, “We are encouraged by Wendy’s International’s new menu offerings and advertising campaigns that should strengthen fiscal 2006 sales. Wendy’s International recently announced its ‘3 Tier – 3 Year’ plan to invigorate the brand and improve results by increasing transactions, reducing costs and focusing on store level margins. This comes after enduring system-wide margin compression for several years. A key step in this plan is the introduction of new menu items such as the Frescata deli sandwich which is now available at our Wendy’s restaurants. In addition, Wendy’s International is planning to offer breakfast next year, a move that our franchisor anticipates could increase average unit sales by $160,000 within three years (a potential $7.7 million annual increase in sales for Meritage). On the O’Charley’s side, the store opening results of our newest restaurant located in Belleville, Michigan, have been the best among our five units.” Mr. Schermer added, “Wendy’s International plans to invigorate the brand should strengthen fiscal 2006 sales. We are hopeful that O’Charley’s Inc. will also undertake similar measures to enhance its brand reputation and increase sales. In the meantime, we reduced overhead costs by eliminating and realigning management and administrative positions throughout the organization, and by making new investments in technology. These efforts are expected to result in annual savings of approximately $600,000 on a consolidated basis.” Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two “Best of Class” brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees.
Enclosed is a $0.06 per
common share cash dividend.
This dividend represents a 20% increase over
the cash dividend we paid out in January 2005.
Dividends are an important element in our
long-term strategy of building value for you - our
fellow business owners.
Accordingly, our Board of Directors will
consider additional dividends in the future.
Meritage is one of the
nation’s premier restaurant franchise operators.
We operate 53 restaurants in two primary
business segments through well-recognized “best of
class” brands: Wendy’s in the Quick Service segment
and O’Charley’s in the Casual Dining segment.
Last month, we opened
our fifth O’Charley’s restaurant in Michigan.
Store opening results were the best among our
O’Charley’s restaurants to date.
We hope to add to this momentum during the
year as our franchisor, O’Charley’s Inc., assists us
in rolling out the first advertising plan for the
O’Charley’s restaurant brand in Michigan.
In addition, O’Charley’s Inc. is re designing
the restaurant building and layout with a desire to
reduce costs and increase operating efficiencies.
We anticipate the new prototype will be
available for Meritage in 2007.
In our Wendy’s
business, our franchisor, Wendy’s International, is
undertaking a plan to invigorate the brand and
improve results by raising sales, reducing costs and
focusing on margins.
A key step in this new plan is the
introduction of breakfast which will provide
customers with distinctive breakfast options.
Wendy’s International anticipates that adding
breakfast could increase average unit sales by
$160,000 within three years, which could result in a
possible $7.7 million increase in sales for
Meritage.
In addition, Wendy’s will introduce new Frescata
deli sandwiches this spring which will provide four
different offerings on fresh-baked artisan bread.
We are encouraged by the new products and
promotions in both of our restaurant concepts which
were promotionally “dormant” in 2005.
Meritage is also
prepared to expand beyond its two franchise brands
and its current geographical presence while
continuing to achieve operational excellence.
Various alternatives are being explored.
The Board of Directors
remains committed to increasing shareholder value
through growth and the return of capital to its
shareholders.
We thank you for your continued support as both a
valued customer and shareholder of Meritage.
This dividend will be
paid out of Additional Paid in Capital and will
reduce Additional Paid in Capital and Total
Stockholders’ Equity by approximately $327,000.
Wendy's
International, Inc. Announces New Combo Plan to Drive Sales,
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