GRAND RAPIDS, Mich., Aug. 08, 2022 (GLOBE NEWSWIRE) — Meritage Hospitality Group Inc. (OTCQX: MHGU), the nation’s premier franchise operator, today announced that the Company’s Board of Directors approved a special quarterly dividend of $0.12 per share. The dividend is payable on October 1, 2022, to shareholders of record on September 15, 2022.
The Board of Directors also approved to increase the Company’s authorization to repurchase an additional 1,000,000 common shares, subject to capital availability and in accordance with applicable laws and regulations. The Board is permitted to rescind the repurchase authorization at any time.
“The Company recently reported strong second quarter sales growth and financial results. Company restaurant management teams continue to do a good job managing operational costs in a volatile commodity and high inflationary environment. Operating margins are beginning to trend in a more positive direction, as we remain focused on managing controllable costs and strategic price increases. The Company has targeted a fiscal year common share dividend of $0.36 which would represent a 12.5% increase over last year, which is consistent with our capital allocation strategy to return capital to shareholders,” stated Robert Schermer, Jr., CEO.
The Company recently reported beginning construction on its first Taco John’s restaurant, located in West Michigan. In conjunction with its development agreement, the Company plans to build 50 new Taco John’s restaurants throughout five states by 2026, with options to develop up to an additional 150 restaurants. The development agreement provides the Company with exclusive rights to these five states, as well as significant economic incentives.
“We have the people and the resources in position to begin scaling Taco John’s across multiple states, while leveraging our best-in-class technology and accounting platforms. This is an exciting new quick-service restaurant brand addition for the Company, and one we believe will provide long-term profitable growth for investors along with many new career opportunities for employees. Meritage is uniquely positioned as the only publicly traded company associated with the privately held Taco John’s brand, thereby providing investors a means to participate in the Taco John’s national expansion story,” added Schermer.
The Company estimates it will invest approximately $100 million in the initial Taco John’s 50 restaurant roll-out through a combination of cash on hand and credit facilities.
Full-Year Outlook: 2022
- Sales growth of +10% to 15%
- Dividend growth +10% to 15%
Strong Sales Growth Ahead
Meritage is forecasting strong sales growth in 2023 and 2024, driven by new Wendy’s and Taco John’s restaurant development, reimaged restaurants, and acquisitions. The Company is committed to delivering on its capital allocation strategy of reinvesting in the business to drive profitable growth and return free cash flow to shareholders over time through a combination of dividend growth and share repurchases.
Meritage continues to distinguish itself as a leader and innovator in the quick-service restaurant segment through a performance-based culture committed to operational excellence, strategic acquisitions, and real estate development.
About the Company
Meritage Hospitality Group is the nation’s premier franchise operator, currently with 350 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 11,000 employees. At fiscal year-end 2021, the Company had total Diluted Weighted Average Shares Outstanding of 9,631,000 and Fully Diluted EPS of $1.81.
The Company’s current and publicly available information pursuant to SEC Rule 15c2-11 and FINRA Rule 6432 can be found at www.otcmarkets.com, under the stock symbol MHGU/Disclosures 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.