DenAmerica Initiates Program to Improve Long Term Performance.SCOTTSDALE Scottsdale, city (1990 pop. 130,069), Maricopa co., central Ariz.; settled in 1895 by Winfield Scott, inc. 1951. It is a resort and retirement center in the Phoenix metropolitan area. , Ariz.--(BUSINESS WIRE)--Aug. 22, 1997-- - Sells 16 Restaurants and Agrees to Sell an Additional 71 Restaurants; Secures Funding Commitment to Expand Black-eyed Black´-eyed` a. 1. Having black eyes. Pea Chain and Reduce Debt - Reports Second Quarter and Six-Months Results DenAmerica Corp. (AMEX AMEX See: American Stock Exchange : DEN (Directory Enabled Networks) The management of a network from a central depository of information about users, applications and network resources. Originally an initiative from Microsoft and Cisco, DEN was turned over to the DMTF in 1998, and its extensions were made ), the owner and franchisor of the Black-eyed Pea restaurant chain and a leading franchisee of 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. restaurants, today announced that it has commenced a program to enhance shareholder value through the expansion of the Company's Black-eyed Pea concept, strategic restaurant acquisitions, the disposition of certain restaurant assets in specific geographic areas and the reduction of debt. Pursuant to this program, the Company announced that an affiliate of CNL CNL CityNightLine (German Rail) CNL Cancel CNL Clinical Nurse Leader Cnl Colonel CNL Center for Naval Leadership CNL Compensated Neutron Log (oil industry) Group, Inc. (CNL) has agreed, subject to various conditions, to make $65 million in sale-leaseback sale-lease·back n. See leaseback. financing available to DenAmerica. The Company will use approximately $40 million of this facility for the financing of new restaurants and $25 million to repay a portion of its obligations under its senior credit facility, which as of August 21, 1997 totaled approximately $42 million. In addition, subsequent to the end of its 1997 second quarter, DenAmerica sold 14 Denny's restaurants and two non-Denny's restaurants for $2.1 million. It has also entered into an agreement to sell 61 Denny's and 10 non-Denny's restaurants, primarily in the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians and Southeast, to a private investor who is currently a Denny's franchisee, for a total consideration of $37.2 million, consisting of gross cash proceeds of $28.2 million, a $3 million short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. note and a $6 million note maturing in 2000. This transaction is subject to various approvals including landlord and lender consents. DenAmerica announced that it intends to open four new Black-eyed Pea restaurants during the remainder of 1997. The Company has also entered into agreements, subject to certain conditions, to acquire nine Black-eyed Pea franchisee restaurant locations. The Company disclosed that it has filed suit in United States District Court for the District of Arizona The United States District Court for the District of Arizona is the Federal district court whose jurisdiction is the state of Arizona. The United States Attorney's Office for the District of Arizona represents the United States in civil and criminal litigation in this court. seeking substantial damages in connection with its purchase of the Black-eyed Pea restaurant chain. The Company also reported that it has received waivers of its non-compliance with certain debt covenants at July July: see month. 2, 1997. DenAmerica reported operating results for the 13-week second quarter and 26-week first half ended July 2, 1997. The year ago periods are the 14-week and 27-week periods ended July 3, 1996. Revenue and operating results for the 14 weeks and 27 weeks ended July 3, 1996 include results for Black-eyed Pea from June June: see month. 24, 1996, the effective date of the acquisition, and from the merger with American Family American Family is a photographic artwork exhibition by Renée Cox. See also
For the second quarter ended July 2, 1997 revenues were $76.2 million compared to $59.0 million for the second quarter ended July 3, 1996 and revenues of $76.1 million for the 13-week first quarter ended April 2, 1997. The revenue increase versus the year-ago period was primarily attributable to the contribution from the Black-eyed Pea acquisition. The Company recorded a net loss for the 13-week period ended July 2, 1997 of $350,000, or $0.03 per share, compared to net income of $697,000, or $0.05 per share, in the year-ago 14-week period. Included in the 1997 second quarter results is a $650,000 gain from the sale of 11 non-branded restaurants. The second quarter loss decreased as compared to the 1997 first quarter net loss of $589,000, or $0.04 per share. Per share results for the 1997 and 1996 second quarter periods are based on 13,414,000 and 13,649,000 weighted average shares outstanding, respectively. Same store Denny's sales declined 5.6% during the quarter which is consistent with results for Denny's restaurants operated by Denny's Inc., the franchisor. Black-eyed Pea same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of declined 4.6% during the quarter, although the Company's 64 restaurants in the core Texas and Oklahoma Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). markets had same store sales declines of only 2.4%. For the first 26 weeks of 1997 ended July 2, the Company had revenues of $152.3 million, compared to $79.2 million for the year-earlier 27-week period. For the first half of 1997, DenAmerica reported a net loss applicable to common shareholders of $939,000, or $0.07 per share, compared to a net loss applicable to common shareholders of $626,000, or $0.06 per share, in the year-ago period. The 1996 six months results include an extraordinary loss of $497,000, or $0.05 per share, due to the early retirement of debt. Per share results for the 1997 and 1996 six month periods are based on 13,414,000 and 10,293,000 weighted average shares outstanding, respectively. DenAmerica Chairman and Chief Executive Officer Jack M. Lloyd commented, "As major shareholders of DenAmerica, management is focused on optimizing operating performance with the goal of achieving sustainable, growing profitability. In order to achieve its strategic objectives, the Company is disposing of certain assets and concentrating its resources and efforts in specific geographic markets. These moves allow us to more aggressively diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our restaurant concepts. Specifically, we plan to emphasize the expansion of our Black-eyed Pea concept and to pursue the acquisition of other restaurant concepts, thereby reducing our dependence on the Denny's brand. "Since the close of the second quarter we have completed, or entered into agreements to sell 88 restaurants for approximately $39 million. Proceeds from these sales will be used to reduce outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and provide working capital to fund the expansion of our Black-eyed Pea concept." DenAmerica Corp. operates full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. , family-oriented and casual dining restaurants, based primarily on the Denny's brand and DenAmerica's own Black-eyed Pea restaurant concept. Company restaurants are located in 31 states, with the largest concentration in the Southeast, Midwest and West regions. -0- Except for the historical information in this press release, this press release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties, including, but not limited to, competitive pressures from within the restaurant industry, changes in the prices of food and beverages F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. , quarterly fluctuations in results, the management of growth and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Actual results may differ materially from management expectations. -0-
DENAMERICA CORP. AND SUBSIDIARIES
Unaudited Financial Highlights
(In thousands, except per share amounts)
Second Quarter Ended Six Months Ended
7/2/97 7/3/96 7/2/97 7/3/96
(13 weeks)(14 weeks)(26 weeks)(27 weeks)
Restaurant sales $ 76,185$ 59,012$ 152,299$ 79,173
Restaurant operating expenses:
Cost of food and beverages 20,840 16,339 41,453 21,971
Payroll and payroll related
costs 26,260 20,156 52,361 27,416
Amortization and depreciation 2,324 1,920 4,590 2,836
Other restaurant operating
costs 20,403 14,590 41,680 20,074
Total restaurant operating
expenses 69,827 53,006 140,084 72,298
Restaurant operating income 6,358 6,006 12,215 6,875
Administrative expenses 3,831 2,134 7,575 3,181
Operating income 2,527 3,873 4,640 3,695
Interest expense, net 3,164 2,791 6,367 3,651
(Loss) income before minority
interest in joint venture,
income taxes and
extraordinary item (637) 1,082 (1,727) 44
Minority interest in joint ventures 53 13 162 11
(Loss) income before income taxes
and extraordinary item (584) 1,069 (1,565) 33
Income tax benefit (expense) 234 (372) 626 (13)
(Loss) income before extraordinary
item (350) 697 (939) 20
Extraordinary item - loss on
extinguishment of debt -- -- -- (497)
Net (loss) income (350) 697 (939) (477)
Preferred stock dividend and
accretion -- -- -- (149)
Net (loss) income applicable to
common shareholders $ (350) $697 $(939) $(626)
Net (loss) income per common
share before extraordinary item $(0.03) $0.05 $(0.07) $(0.01)
Net (loss) income per share $(0.03) $0.05 $(0.07) $(0.06)
Weighted average common
shares outstanding 13,414 13,649 13,414 10,293
CONTACT: DenAmerica Corp. Jaffoni & Collins Incorporated Todd S Todd , Sir Alexander Robertus 1907-1997. British chemist. He won a 1957 Nobel Prize for his study of nucleic acids and nucleotide structures. . Brown David C. Collins Chief Financial Officer Joseph N. Jaffoni 602/483-7055 212/505-3015 or dccollins@earthlink EarthLink (NASDAQ: ELNK), is an Internet service provider headquartered in Atlanta, Georgia, USA. Business EarthLink provides a variety of Internet connection types, including dial-up, DSL, satellite, and cable. .net |
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