Advantica Reports Second Quarter Results; Denny's Systemwide Sales Increase to a Record $557 Million.Business Editors/Food and Restaurant Writers SPARTANBURG Spartanburg, city (1990 pop. 43,467), seat of Spartanburg co., NW S.C., in the Piedmont (see under piedmont) near the N.C. line; inc. 1831. The city is noted for its textile production. , S.C.--(BUSINESS WIRE)--Aug. 8, 2000 Advantica Restaurant Group, Inc. (Nasdaq: DINE) today reported that systemwide sales from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , which include sales from company-owned, franchised and licensed restaurants, increased nearly 3 percent to $557 million for the second quarter ended June June: see month. 28, 2000 compared with $542 million in the prior year quarter. This increase is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to continued growth in the Denny's Denny's is the largest full-service family restaurant chain in the United States. It operates over 2,500 restaurants in the United States (including Puerto Rico), Canada, Curaçao, Costa Rica, El Salvador, Japan, Mexico, and New Zealand. brand which has added 31 restaurants since the same period last year. Revenue from continuing operations decreased to $297 million versus $307 million in the prior year quarter. The lower revenue is primarily a result of the aggressive refranchising efforts at Denny's which has reduced company-owned stores by 50 since the prior year quarter. The Company reported EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become from continuing operations of $48.1 million for the second quarter, compared with $39.1 million in the prior year quarter. The EBITDA increase is primarily attributable to gains from the successful refranchising efforts at Denny's. Due to the Company's progress in its previously announced plan to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. FRD FRD Ford (street type) FRD Federal Research Division FRD Free Radical Design (game developer) FRD Formerly Restricted Data FRD Foundation for Research Development FRD Functional Requirements Document Acquisition Co., the parent company of Coco's and Carrows Carrows is a chain of casual dining restaurants operating in the western portion of the United States. As of 2004, the chain operates over 100 restaurants, mostly in California and with locations in New Mexico, Nevada, Oregon, Texas, and Washington. , FRD has been reclassified as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. for financial reporting purposes. Revenue at Coco's and Carrows declined to $94 million from $99 million in the prior year quarter, resulting from decreases in same-store sales Same-store sales is a business term which refers to the revenue generated by one of a retail chain's specific outlets during a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year. and in the number of company-owned restaurants. EBITDA at Coco's and Carrows decreased to $10.8 million versus $12.5 million in the prior year quarter. Commenting on the Company's results for the second quarter, James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. B. Adamson “Adamson” redirects here. For other uses, see Adamson (disambiguation).
The Adamson was an English car manufactured in Enfield, Middlesex, from 1912 to 1925. , Advantica's chairman and chief executive officer, said, "We are pleased to report that we remain on track with our 'One Company, One Brand' strategy which focuses exclusively on our Denny's brand. We also continued to make progress during the quarter to move Denny's to a more franchised-based operation. In connection with Denny's refranchising program, we sold 44 restaurants to franchisees during the quarter which increases the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. total to 63. In addition, we currently have letters of intent to sell an additional 50 units to franchisees. We expect to refranchise about 100 units per year over the next several years with an ultimate goal to retain about 300 to 400 company-owned units. Also, during the second quarter we have continued in our efforts to divest Coco's and Carrows as part of our strategy to focus exclusively on Denny's." Commenting on the base business, Mr. Adamson continued, "Denny's maintained its positive sales momentum with a modest increase in same-store sales for the quarter while it began to test a lower cost reimaging (1) To reinstall the operating system and applications on a computer. It implies formatting the hard disk and starting from scratch. (2) To preconfigure a new PC by overwriting the pre-installed operating system with the same or different one, but combined with model. We will continue to position Denny's for the long term by capitalizing on Denny's tremendous brand equity as the nation's leading and most recognized family dining chain. "Accordingly, we remain committed to reinvesting capital in our Denny's units. As we stated earlier this year, we are taking a conservative approach to our 'Denny's Diner' reimaging program in an effort to develop the most cost efficient model that will appeal to our current and future franchisees. We have completed a lower cost reimage prototype Prototype A first or original model of hardware or software. Prototyping involves the production of functionally useful and trustworthy systems through experimentation with evolving systems. , and during the quarter we reimaged three units utilizing this lower cost design with five additional units completed to date. "We have also continued to make great strides in our diversity initiatives as evidenced by FORTUNE magazine recently ranking Advantica No. 1 in its annual survey of 'America's 50 Best Companies for Minorities'. Diversity and inclusion are an integral part of our culture today, and we are committed to continuing our efforts in being a truly diverse company," Adamson concluded. The Company reported a loss from continuing operations for the quarter of $11.3 million, or $0.28 per common share, compared with last year's second quarter loss of $30.3 million, or $0.76 per share. This year's quarter includes amortization of excess reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. value of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $10.6 million, or $0.26 per share, compared with $22.1 million or $0.55 per share in last year's quarter. This amortization is a noncash charge Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. related to the implementation of fresh start reporting required upon the Company's emergence from bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most in January January: see month. 1998. Due to the significant noncash depreciation and amortization charges related to fresh start reporting, the Company reports EBITDA as a measure of financial performance. The fresh start reporting amortization will discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: on the fifth anniversary of the Company's emergence from bankruptcy reorganization in January 1998. Year-to-Date Results Systemwide sales from continuing operations for the two quarters ending June 28, 2000 increased over four percent to $1.09 billion compared with $1.04 billion in the prior year period. This increase is attributable to continued growth in the Denny's brand which has added 31 restaurants since the same period last year. Revenue from continuing operations declined to $581 million versus $596 million in the prior year period. Same-store sales growth at Denny's was offset by a lower number of company-owned stores attributable to its refranchising effort. The Company reported an increase in EBITDA from continuing operations for the year-to-date period to $77.1 million compared with $64.9 million in the prior year period. The increase was principally attributable to gains from the refranchising of company-owned Denny's units. Revenue at Coco's and Carrows, which have been reclassified as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , declined to $189 million year-to-date from $194 million in the prior year period, resulting from decreases in same-store sales at Carrows and in the number of company-owned restaurants at both brands. EBITDA at Coco's and Carrows decreased to $19.6 million versus $20.4 million in the prior year period. Concept Results During the second quarter, Denny's same-store sales for company-owned restaurants increased 0.6 percent while franchised units declined 0.7 percent. Denny's EBITDA improved to $54.2 million from $46.3 million in the prior year quarter. The increase in EBITDA was primarily attributable to higher gains on refranchising, offset by lower operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . Higher operating costs operating costs npl → gastos mpl operacionales as a percentage of sales were attributable to increased payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. and benefits costs, higher commodity costs as well as increased advertising expenses, partially offset by reduced general and administrative expenses. Franchise and licensing revenue increased over 20 percent to $17.5 million compared with $14.5 million in the prior year quarter, while franchise operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased approximately 42 percent to $9.1 million from $6.4 million in last year's quarter. This favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. comparison is primarily attributable to an 81-unit increase in franchised and licensed units year over year, which is net of 50 units reaquired from a franchisee during the second quarter. The Denny's system opened 20 new restaurants during the quarter resulting in a total of 32 restaurants opened year-to-date and increasing the total system to 1,793 restaurants. Coco's second quarter EBITDA declined to $6.3 million from $7.4 million in the prior year quarter. The decrease in EBITDA primarily resulted from a 3.0 percent decline in company-owned same-store sales. Carrows' second quarter EBITDA decreased to $4.5 million from $5.1 million in the prior year quarter. The decrease in EBITDA primarily resulted from a 2.9 percent decline in company-owned same-store sales. Advantica Restaurant Group, Inc. is one of the largest restaurant companies in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , operating over 2,400 moderately-priced restaurants in the mid-scale dining segment. Advantica owns and operates the Denny's, Coco's and Carrows restaurant brands. Advantica news releases, links to SEC filings and other financial information are available on its corporate web site at http:\\www.advantica-dine.com. Certain matters discussed in this release constitute forward looking statements and involve risks, uncertainties, and other factors that may cause the actual performance of Advantica Restaurant Group, Inc., its subsidiaries and underlying concepts to be materially different from the performance indicated or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such statements. Words such as "expects," "anticipates," "believes," "projects," "intends," "plans" and "hopes," and variations of such words and similar expressions are intended to identify such forward looking statements. Factors that could cause actual performance to differ materially from the performance indicated by such statements include, among others: the competitive pressures from within the restaurant industry; the level of success of the Company's operating initiatives and advertising and promotional efforts, including the initiatives and efforts specifically mentioned above; adverse publicity; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy, particularly at the retail level; and other factors from time to time set forth in the Company's SEC reports, including but not limited to the discussion in Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 29, 1999 (and in the Company's subsequent quarterly reports on Form 10-Q Form 10-Q See 10-Q. ).
ADVANTICA RESTAURANT GROUP, INC.
Statements of Consolidated Operations
(Unaudited)
Quarter Quarter
Ended Ended
(In thousands, except per 6/28/00 6/30/99
share amounts)
--------- ---------
Revenue:
Company restaurant sales $ 279,412 $ 292,256
Franchise and licensing
revenue 17,521 14,527
--------- ---------
Total operating revenue 296,933 306,783
--------- ---------
Cost of company restaurant sales:
Product costs 73,360 75,243
Payroll and benefits 110,432 114,312
Occupancy 16,341 16,472
Other operating expenses 40,972 38,820
--------- ---------
Total costs of company
restaurant sales 241,105 224,847
Franchise restaurant costs 8,419 8,116
General and administrative
expenses 16,629 19,455
Amortization of excess
reorganization value 10,564 22,136
Depreciation and other
amortization 28,516 27,944
Gains on refranchising and
other, net (17,346) (4,784)
--------- ---------
Total operating costs and
expenses 287,887 317,714
--------- ---------
Operating income (loss) 9,046 (10,931)
--------- ---------
Other expenses:
Interest expense, net 20,259 19,805
Other nonoperating expenses,
net (241) 3
--------- ---------
Total other expenses, net 20,018 19,808
--------- ---------
Income (loss) before taxes (10,972) (30,739)
Provision for (benefit from)
income taxes 337 (450)
--------- ---------
Income (loss) from continuing
operations (11,309) (30,289)
Income (loss) from
discontinued operations (8,150) (10,917)
--------- ---------
Net income (loss) applicable
to common shareholders $ (19,459) $ (41,206)
========= =========
Basic and diluted income (loss) per share:
Income (loss) from
continuing operations $ (0.28) $ (0.76)
Income (loss) from discontinued
operations (0.21) (0.27)
--------- ---------
Net income (loss) $ (0.49) $ (1.03)
========= =========
Average outstanding and
equivalent share 40,079 40,025
========= =========
ADVANTICA RESTAURANT GROUP, INC.
Statements of Consolidated Operations
(Unaudited)
Two Two
Quarters Quarters
Ended Ended
(In thousands, except per 6/28/00 6/30/99
share amounts)
--------- ---------
Revenue:
Company restaurant sales $ 547,039 $ 568,305
Franchise and licensing 33,554 27,776
revenue
--------- ---------
Total operating revenue 580,593 596,081
--------- ---------
Cost of company restaurant sales:
Product costs 141,993 147,591
Payroll and benefits 219,534 225,807
Occupancy 32,282 31,929
Other operating expenses 80,336 78,848
--------- ---------
Total costs of company
restaurant sales 474,145 484,175
Franchise restaurant costs 15,608 14,476
General and administrative
expense 35,800 40,496
Amortization of excess
reorganization value 21,295 44,327
Depreciation and other
amortization 55,664 52,363
Restructuring and impairment
charges 7,248 ---
Gains on refranchising and
other, net (22,024) (7,956)
--------- ---------
Total operating costs and
expenses 587,736 627,881
--------- ---------
Operating income (loss) (7,143) (31,800)
--------- ---------
Other expenses:
Interest expense, net 41,744 39,728
Other nonoperating expenses,
net (980) 1,032
--------- ---------
Total other expenses, net 40,764 40,760
--------- ---------
Income (loss) before taxes (47,907) (72,560)
Provision for (benefit from)
income taxes 697 (939)
--------- ---------
Income (loss) from continuing
operations (48,604) (71,621)
Income (loss) from
discontinued operations (17,330) (31,265)
--------- ---------
Net income (loss) applicable
to common shareholders $ (65,934) $ (102,886)
========= =========
Basic and diluted income (loss) per share:
Income (loss) from
continuing operations $ (1.21) $ (1.79)
Income (loss) from
discontinued operations (0.44) (0.78)
--------- ---------
Net income (loss) $ (1.65) $ (2.57)
========= =========
Average outstanding and
equivalent shares 40,071 40,022
========= =========
ADVANTICA RESTAURANT GROUP, INC.
Consolidated Balance Sheets
(Unaudited)
(In thousands) 6/28/00 12/29/99
--------- ---------
ASSETS
Current Assets
Cash and cash equivalents $ 5,948 $ 165,828
Investments --- 17,084
Restricted cash held in escrow 96,665 ---
Restricted investments securing
in-substance defeased debt 147,845 158,710
Other 35,110 37,829
--------- ---------
285,568 379,451
Property and equipment, net 466,064 510,937
Reorganization value in excess of
amounts allocable to identifiable
assets, net 105,583 126,910
Other assets 211,086 218,965
--------- ---------
Total Assets $ 1,068,301 $ 1,236,263
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current maturities of notes and
debentures $ 106,344 $ 164,811
Current maturities of capital
lease obligations 11,051 12,614
Current maturities of
in-substance defeased debt 147,676 158,731
Net liabilities of discontinued
operations 70,022 53,979
Accounts payable and other accrued
liabilities 216,879 240,324
--------- ---------
551,972 630,459
--------- ---------
Long-Term Liabilities
Notes and debentures, less
current maturities 554,137 555,978
Capital lease obligations, less
current maturities 42,240 59,385
Other 131,601 136,281
--------- ---------
727,978 751,644
--------- ---------
Total Liabilities 1,279,950 1,382,103
--------- ---------
Shareholders' Equity (211,649) (145,840)
--------- ---------
Total Liabilities and $ 1,068,301 $ 1,236,263
Shareholders' Equity
========= =========
ADVANTICA RESTAURANT GROUP, INC.
Results by Operating Entity
(Unaudited)
Quarter Ended Two Quarters Ended
---------------- -----------------
(In millions)
6/28/00 6/30/99 6/28/00 6/30/99
------- ------- ------- --------
Revenue:
Denny's $ 296.1 $ 306.0 $ 579.0 $ 594.6
Corporate and other 0.8 0.8 1.6 1.5
------- ------- ------- --------
Revenue from continuing $ 296.9 $ 306.8 $ 580.6 $ 596.1
operations
======= ======= ======= ========
Revenue from discontinued
operations:
Coco's (a) $ 53.9 $ 57.2 $ 109.5 $ 112.1
Carrows (a) 39.9 42.0 79.0 82.1
------- ------- ------- --------
Total revenue from discontinued
operations $ 93.8 $ 99.2 $ 188.5 $ 194.2
======= ======= ======= ========
EBITDA (b):
Denny's $ 54.2 $ 46.3 $ 91.6 $ 81.9
Corporate and other (6.1) (7.2) (14.5) (17.0)
------- ------- ------- --------
EBITDA from continuing
operations $ 48.1 $ 39.1 $ 77.1 $ 64.9
======= ======= ======= ========
EBITDA from discontinued operations:
Coco's (a) $ 6.3 $ 7.4 $ 11.8 $ 12.8
Carrows (a) 4.5 5.1 7.8 7.6
------- ------- ------- --------
Total EBITDA from
discontinued operations $ 10.8 $ 12.5 $ 19.6 $ 20.4
======= ======= ======= ========
Gains on refranchising and other, net:
Denny's $ 17.3 $ 3.8 $ 22.0 $ 6.9
Corporate and other --- 1.0 --- 1.0
------- ------- ------- --------
Total $ 17.3 $ 4.8 $ 22.0 $ 7.9
======= ======= ======= ========
(a) Reclassified as discontinued operations in anticipation of the
disposition of Coco's and Carrows.
(b) EBITDA is defined by the Company as operating income before
depreciation, amortization and charges for restructuring and
impairment.
ADVANTICA RESTAURANT GROUP, INC.
Statistical Data by Operating Entity
(Unaudited)
Quarter
Same-Store Sales Ended
(Company-owned) 6/28/00
(increase/(decrease) vs.
prior year)
---------
Denny's 0.6%
Coco's (3.0%)
Carrows (2.9%)
Quarter Quarter
Average Unit Sales Ended Ended Increase/
(in thousands) 6/28/00 6/30/99 (Decrease)
--------- ---------- --------
Denny's
Company-owned $340.1 $331.3 2.7%
Franchised $291.8 $286.5 1.8%
Coco's
Company-owned $363.8 $370.6 (1.8%)
Franchised $335.5 $320.9 4.5%
Carrows
Company-owned $334.8 $345.3 (3.0%)
Franchised $254.5 $262.6 (3.1%)
ADVANTICA RESTAURANT GROUP, INC.
Statistical Data by Operating Entity
(Unaudited)
Two
Same-Store Sales Quarters
(Company-owned) Ended
(increase/(decrease) vs. 6/28/00
prior year)
---------
Denny's 1.4%
Coco's 0.1%
Carrows (1.4%)
Two Two
Average Unit Sales Quarters Quarters
(in thousands) Ended Ended Increase/
6/28/00 6/30/99 (Decrease)
--------- ---------- --------
Denny's
Company-owned $663.0 $645.2 2.8%
Franchised $568.3 $551.0 3.1%
Coco's
Company-owned $737.9 $728.6 1.3%
Franchised $674.1 $632.4 6.6%
Carrows
Company-owned $662.2 $673.9 (1.7%)
Franchised $517.8 $526.0 (1.6%)
ADVANTICA RESTAURANT GROUP, INC.
Statistical Data by Operating Entity
(Unaudited)
Restaurant Units 6/28/00 6/30/99
------- -------
Denny's
Company-owned 833 883
Franchised 942 862
Licensed 18 17
------- -------
1,793 1,762
Discontinued Operations:
Coco's
Company-owned 144 150
Franchised 34 34
Licensed 301 301
------- -------
479 485
Carrows
Company-owned 116 120
Franchised 28 27
------- -------
144 147
------- -------
2,416 2,394
======= =======
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