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Max & Erma's Restaurants 2005 revenues hit a record $183.7 million |
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Max & Erma's Restaurants, Inc. Reports Fiscal 2005 Results |
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Max & Erma's Restaurants, Inc. (NASDAQ:MAXE) today reported fourth quarter and fiscal 2005 year-end results.
Revenues for 2005 increased 0.4% to a record $183.7 million from $183.0 million for 2004. The Company reported a net loss of $1,315,000 or $(0.52) per diluted share for 2005 as compared to net income of $1,097,000 or $0.42 per diluted share for 2004.
For the fourth quarter of 2005, the Company reported that revenues declined 11% from $45.6 million for the fourth quarter of 2004 to $40.6 million for the fourth quarter of 2005. The Company reported a net loss of $80,000 or $(0.03) per diluted share for the fourth quarter of 2005 as compared to a net loss of $220,000 or $(0.09) per diluted share for the fourth quarter of 2004.
Todd Barnum, Chairman and Chief Executive Officer of Max & Erma's noted that fiscal 2004 and the fourth quarter of fiscal 2004 consisted of one extra week, which accounted for approximately $3.5 million of revenue. Exclusive of that extra week, revenues increased approximately 2.4% for the entire year and declined 3.5% during the fourth quarter. Mr. Barnum said the increase for the year was a result of three new restaurants opened during 2005, five openings during 2004, and an 11% increase in franchise fees and royalties, all of which offset the closing of two restaurants during the third quarter of 2005 and a 3.2% decline in same-store sales for the year. Mr. Barnum added that the decline in revenues from the fourth quarter of 2004 to the fourth quarter of 2005 was due to a 6.7% decline in same-store sales and the closing of the two restaurants earlier in 2005, the effect of which was partially offset by the opening of three restaurants during 2005.
Mr. Barnum went on to say that the decline in same-store sales for both the quarter and year-to-date periods was a result of intense competition in the casual dining segment combined with a sluggish mid-western economy where most of the Company's restaurants are located. He added that high gasoline and utility prices have also taken a toll on our customer's discretionary spending.
Mr. Barnum said that although soft same-store sales took a toll on restaurant margins, he is pleased with the improvement in cost of sales, as reductions in some commodity prices, cost savings measures, and modest price increases all worked to lower cost of sales. He said we also saw payroll and benefits drop as payroll cost stabilized and benefits expense dropped due to reduced worker's compensation expense. However, he said that other operating expenses, which to a great extent are fixed, rose significantly as a percentage of revenue in the second half of 2005 due to the decline in same-store sales.
Mr. Barnum said he is pleased with the Company's new restaurants. Restaurants opened in 2005 reported average weekly sales 30% above chain average. Mr. Barnum announced that six to seven restaurants will open in 2006, one to two Company owned and five franchise locations.
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