Max & Erma's Restaurants, Inc. Reports Second Quarter Results
Record second quarter revenues
-- One Company-owned and one franchised restaurant opened during the quarter.
-- Two to three Company-owned and three to four franchised locations scheduled to open during second half of 2004.
-- Board extends 200,000 share repurchase authorization to August 21, 2005.
Max & Erma's Restaurants, Inc. (Nasdaq:MAXE) today reported second quarter 2004 financial results.
Revenues for the second quarter of 2004 rose 8% to a second quarter record of $41.9 million from $38.8 million for the second quarter of 2003. Year-to-date revenues also increased 8% to $95.3 million for 2004 from $88.0 million for 2003. Net income and net income per diluted share declined 23% to $497,000 or $0.19 per diluted share for the second quarter of 2004 from $650,000 or $0.25 per diluted share for the second quarter of 2003. Year-to-date the Company reported net income of $1,388,000 or $0.54 per diluted share for 2004 versus net income of $1,558,000 or $0.59 per diluted share for 2003.
Todd Barnum, Chairman and Chief Executive Officer of Max & Erma's said that the results for the quarter and year-to-date are somewhat disappointing. We made progress in several areas such as payroll and health insurance and maintained good control over corporate overhead, but gave it all back in higher cost of sales. Mr. Barnum went on to say that record high chicken, beef and dairy prices drove up costs of goods sold by a full percentage point over last year. He said that equates to over $400,000 for the quarter and over three quarters of a million dollars for the year-to-date period in higher cost of sales.
Mr. Barnum said that despite the margin-pressure from higher commodity prices, the Company is maintaining a steady, conservative growth. Revenues grew 8% for both the quarter and year-to-date as a result of two Company-owned restaurant openings and a continued expansion of the Company's franchising program. Mr. Barnum added that the franchise fees and royalties have increased 22% year-to-date. He noted that the Company expects to open two to three restaurants during the second half of the year and anticipates three to four franchised openings. Through the second quarter of 2004 two franchised restaurants have already opened.
Mr. Barnum also announced that the Company's Board of Directors extended an authorization to repurchase up to 200,000 shares of its common stock through August 21, 2005. As of June 10, 2004 approximately 129,000 shares remain available for repurchase under the authorization. The buybacks will occur selectively at the Board's discretion through market purchases or privately negotiated transactions. The Company's stock has traded in a range of $14.10 to $19.00 over the last 52 weeks.
Max & Erma's currently owns and operates 75 casual dining full-service restaurants in Akron, Columbus, Cleveland, Cincinnati, Dayton, Niles and Toledo, Ohio; Indianapolis, Indiana; Detroit, Ann Arbor, Grand Rapids, and Lansing Michigan; Pittsburgh and Erie, Pennsylvania; Lexington and Louisville, Kentucky; Chicago, Illinois; Charlotte, North Carolina; Atlanta, Georgia; Virginia Beach and Norfolk, Virginia. The Company also currently franchises 18 restaurants in Cleveland, Columbus, Cincinnati, Wilmington, Sandusky and Dayton, Ohio, the Ohio Turnpike; St. Louis, Missouri; Green Bay, Wisconsin; Philadelphia, Pennsylvania; and Edinburgh, Evansville and Seymour, Indiana. A franchised restaurant is under construction in Chillicothe, Ohio. Company-owned restaurants are under construction in Westerville, Canton and Perrysburg, Ohio. The Company's common shares are traded on the NASDAQ National Market System under the symbol MAXE.
-- Two to three Company-owned and three to four franchised locations scheduled to open during second half of 2004.
-- Board extends 200,000 share repurchase authorization to August 21, 2005.
Financial Summary (Unaudited)
(In thousands, except per share data)
12 Weeks Ended 28 Weeks Ended
--------------------------- --------------------------
5/19/04 5/11/03 % Change 5/19/04 5/11/03 % Change
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Revenues $41,882 $38,801 +7.9% $95,304 $88,009 +8.3%
Operating Income $1,161 $1,224 -5.1% $2,962 $2,948 +0.5%
Income Before
Taxes $627 $807 -22.3% $1,831 $2,043 -10.4%
Net Income $497 $650 -23.5% $1,388 $1,558 -10.9%
Diluted Net Income
per Common Share $0.19 $0.25 -23.1% $0.54 $0.59 -8.5%
Diluted Shares
Outstanding 2,580 2,609 -1.1% 2,593 2,663 -2.3%
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Max & Erma's Restaurants, Inc. (Nasdaq:MAXE) today reported second quarter 2004 financial results.
Revenues for the second quarter of 2004 rose 8% to a second quarter record of $41.9 million from $38.8 million for the second quarter of 2003. Year-to-date revenues also increased 8% to $95.3 million for 2004 from $88.0 million for 2003. Net income and net income per diluted share declined 23% to $497,000 or $0.19 per diluted share for the second quarter of 2004 from $650,000 or $0.25 per diluted share for the second quarter of 2003. Year-to-date the Company reported net income of $1,388,000 or $0.54 per diluted share for 2004 versus net income of $1,558,000 or $0.59 per diluted share for 2003.
Todd Barnum, Chairman and Chief Executive Officer of Max & Erma's said that the results for the quarter and year-to-date are somewhat disappointing. We made progress in several areas such as payroll and health insurance and maintained good control over corporate overhead, but gave it all back in higher cost of sales. Mr. Barnum went on to say that record high chicken, beef and dairy prices drove up costs of goods sold by a full percentage point over last year. He said that equates to over $400,000 for the quarter and over three quarters of a million dollars for the year-to-date period in higher cost of sales.
Mr. Barnum said that despite the margin-pressure from higher commodity prices, the Company is maintaining a steady, conservative growth. Revenues grew 8% for both the quarter and year-to-date as a result of two Company-owned restaurant openings and a continued expansion of the Company's franchising program. Mr. Barnum added that the franchise fees and royalties have increased 22% year-to-date. He noted that the Company expects to open two to three restaurants during the second half of the year and anticipates three to four franchised openings. Through the second quarter of 2004 two franchised restaurants have already opened.
Mr. Barnum also announced that the Company's Board of Directors extended an authorization to repurchase up to 200,000 shares of its common stock through August 21, 2005. As of June 10, 2004 approximately 129,000 shares remain available for repurchase under the authorization. The buybacks will occur selectively at the Board's discretion through market purchases or privately negotiated transactions. The Company's stock has traded in a range of $14.10 to $19.00 over the last 52 weeks.
Max & Erma's currently owns and operates 75 casual dining full-service restaurants in Akron, Columbus, Cleveland, Cincinnati, Dayton, Niles and Toledo, Ohio; Indianapolis, Indiana; Detroit, Ann Arbor, Grand Rapids, and Lansing Michigan; Pittsburgh and Erie, Pennsylvania; Lexington and Louisville, Kentucky; Chicago, Illinois; Charlotte, North Carolina; Atlanta, Georgia; Virginia Beach and Norfolk, Virginia. The Company also currently franchises 18 restaurants in Cleveland, Columbus, Cincinnati, Wilmington, Sandusky and Dayton, Ohio, the Ohio Turnpike; St. Louis, Missouri; Green Bay, Wisconsin; Philadelphia, Pennsylvania; and Edinburgh, Evansville and Seymour, Indiana. A franchised restaurant is under construction in Chillicothe, Ohio. Company-owned restaurants are under construction in Westerville, Canton and Perrysburg, Ohio. The Company's common shares are traded on the NASDAQ National Market System under the symbol MAXE.
