DAKA INTERNATIONAL REPORTS RECORD EARNINGS -- UP 28 PERCENT
DAKA INTERNATIONAL REPORTS RECORD EARNINGS -- UP 28 PERCENT DANVERS, Mass., Aug. 26 /PRNewswire/ -- DAKA International, Inc. (NASDAQ: DKAI) reported net income of $4,239,000 ($1.24 per share) for the fiscal year ended June 27, 1992, compared with net income of $4,019,000 ($1.07 per share) for fiscal 1991. During fiscal 1991 the company reported losses from discontinued operations of $863,000 and an extraordinary gain of $1,570,000. Income from continuing operations increased 28 percent from $3,312,000 (88 cents per share) in fiscal year 1991 to $4,239,000 ($1.24 per share) for the current year with revenues increasing 8 percent to $164,217,000 for fiscal year 1992 compared with $157,249,000 for the prior year. "I am pleased that the company's efforts have resulted in the second consecutive year of record earnings," said William H. Baumhauer, chairman and chief executive officer of DAKA International. "Operating margins in both the restaurant and food-service management segments have improved each of the past three years. "Two significant events made fiscal year 1992 a pivotal year for the company," he added. "First the company sold its lodging segment, which had lost approximately $7 million in the three previous years and exhausted cash required expansion; second, the company increased its working capital through the sale of $10 million of preferred stock, allowing the company to invest in growth-oriented opportunities." Fuddruckers, Inc., the company's restaurant subsidiary with 136 Fuddruckers restaurants worldwide, benefited significantly from the increase in capital. During fiscal 1992 the company concentrated on expanding its base of owned restaurants by acquiring 20 previously franchised units representing a 58 percent increase in company-owned restaurants. "Fuddruckers has also invested in a multimedia advertising campaign, which included airing television commercials, the company's first since 1984. The results have shown growth in comparable restaurant sales in the target markets of between 7 percent and 15 percent. During the upcoming fiscal year, the company will continue to expand in these markets by adding company-owned restaurants coupled with an enhanced advertising campaign," added Baumhauer. "Franchising activities are expected to more than double in the 1993 fiscal year with gains in both domestic and international markets," said Baumhauer. "License agreements were finalized in the Mideast earlier this year while interest in the Pacific Rim and Europe remains strong. "With the availability of capital, Fuddruckers is positioned for growth. Our goal is to add up to 25 company-owned and franchised restaurants during fiscal 1993, in addition to the continued acquisitions of selected franchise restaurants," Baumhauer said. Daka, Inc., the company's food-service management subsidiary, is one of the leading providers of food-service management in the eastern United States and is ranked in the top 10 nationwide. Serving over 450 food-service facilities, Daka has a strong concentration in schools, colleges, museums, business and industry. For the third consecutive year, Daka has successfully increased operating margins and has benefited from the retailing and merchandising expertise vested in the Fuddruckers Restaurants operations. "With a streamlined purchasing program and the implementation of new labor management systems, Daka's profit margins increased 22 percent during the current year. With this proven ability to increase operating margins, Daka is focusing on acquisitions as a vehicle for growth and increased shareholder return," Baumhauer continued. The availability of additional capital will also be very beneficial to Daka as the industry has become more competitive and requires more significant capital investments as an integral part of new business development. Baumhauer indicated, "The combination of capital and effective management systems make Daka a formidable competitor in the 1990s and this same combination of capital and systems will enable Daka to acquire mid-sized food-service companies in 1993. "DAKA International, Inc. will continue to exploit its unique blend of synergistic capabilities," said Baumhauer. "Fuddruckers is a successful concept with significant growth potential while Daka provides a stable base of operations benefiting from the retailing orientation of the restaurant segment.
Fiscal 1992 was a pivotal year for the company where it dramatically improved its financial position, thereby setting the stage for improved internal and external growth in the upcoming year," concluded Baumhauer.
-0- 8/26/92 /CONTACT: David N. Terhune, CFO of Daka International, 508-774-9115/ (DKAI) CO: DAKA International ST: Massachusetts IN: FOD SU: ERN
CH -- NE008 -- 3547 08/26/92 14:34 EDT
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|Date:||Aug 26, 1992|
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