GRAND RAPIDS, Mich., Oct. 14, 2022 (GLOBE NEWSWIRE) — Meritage Hospitality Group Inc. (OTCQX: MHGU), the nation’s premier franchise operator, today reported financial results for the third quarter and the nine months ended October 2, 2022.
2022 Third Quarter Highlights:
- Sales increased +8.9% to $160.6 million compared to $147.5 million for the same period last year.
- Earnings from Operations increased +63.2% to $3.0 million compared to $1.8 million for the same period last year.
- Net Earnings were to $1.8 million compared to $2.4 million for the same period last year.
- Consolidated EBITDA (a non-GAAP measure) increased +2.9% to $8.8 million compared to $8.6 million for the same period last year.
“Restaurant sales remained solid in the third quarter, despite several one-time disruptions that affected select restaurants in September, including a system voluntary food recall and hurricane. Earnings from operations increased +63.2% over last year, still impacted by elevated supply chain costs. We are anticipating commodity cost relief and believe operating margins will start to normalize as pricing catches up with inflated costs over the next year. Consumer demand in our Wendy’s restaurants continues to demonstrate strength and resiliency in the current economic environment,” stated Meritage CEO, Robert E. Schermer, Jr.
The Company acquired six Wendy’s restaurants in Florida during the period and is developing new restaurants across its 16 states of operations. Newly built Wendy’s restaurants continue to generate strong sales and improved consumer demand.
The Company commenced construction on three Taco John’s restaurants in Michigan under an exclusive 50-store development agreement covering up to four states.
2022 Year-To-Date Highlights:
- Sales for the nine months increased +8.9% to $466.6 million compared to $428.6 million for the same period last year.
- Earnings from Operations were $13.2 million compared to $16.6 million for the same period last year.
- Net Earnings were $9.8 million compared to $15.2 million for the same period last year.
- Consolidated EBITDA (a non-GAAP measure) was $31.7 million compared to $37.7 million for the same period last year.
- The Company added 6 new restaurants during the first nine months of the year, to finish the third quarter with 350 restaurants in operation.
Outlook: Strong Sales Growth & Development Momentum Ahead
The Company has committed significant long-term capital resources to Wendy’s brand initiatives, including an agreement to build 51 new Wendy’s restaurants by the end of 2025 under the Groundbreaker Incentive Program, and build 50 Taco John’s restaurants under a development agreement which includes multiple economic incentives including royalty and marketing fee benefits, subject to the Company fulfilling a development schedule.
Looking forward, Meritage is forecasting strong sales growth, 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 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, striving for best-in-class results through a performance-based culture committed to operational excellence, strategic acquisitions and real estate development.
Meritage Hospitality Group is the nation’s premier restaurant 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 weighted average fully diluted common shares outstanding of 8,417,219.
The Company’s current and publicly available information pursuant to amended 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.
Robert E. Schermer, Jr., CEO
Meritage Hospitality Group Inc.