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May 5, 2006

US: Reduced Q1 net loss at Friendly Ice Cream

Massachusetts-based ice cream company Friendly Ice Cream has reported a net loss for the first quarter of 2006 of US$1.8m, or $0.23 per share, against a net loss of $3.0m, or $0.39 per share, in the first quarter of 2005.

Massachusetts-based ice cream company Friendly Ice Cream has reported a net loss for the first quarter of 2006 of US$1.8m, or $0.23 per share, against a net loss of $3.0m, or $0.39 per share, in the first quarter of 2005.

Revenues rose by 3.3% to $125.7m, with sales increases recorded across all business segments.

The company said that restaurant revenues increased by 2.3% to $95.3m. Pre-tax income from the restaurant segment was $2.7m, against $2.8m in the first quarter of 2005. Comparable sales in company-owned restaurants rose by 4.8%, and by 0.6% for franchised outlets.

Pre-tax income from the company’s foodservice division increased from $1.3m in the first quarter of 2005 to $1.8m in the first three months of 2006, on the back of increased product sales to franchised restaurants and retail supermarket customers, and lower commodity costs. Foodservice revenues rose by 6.3% to $26.9m.

Friendly Ice Cream further reported that pre-tax income from its franchise segment reached $2.4m, against $2.2m in the first quarter of 2005. The company said the improvements in pre-tax income stemmed primarily from increased royalty revenue from comparable franchised restaurant sales growth and from the opening of six new franchised restaurants and the re-franchising of 16 restaurants. Increased rental income from leased and sub-leased franchised locations also contributed to the revenue growth in the first quarter of 2006, the company said.
 
“We are pleased with our first-quarter results,” said Friendly Ice Cream’s president and CEO John Cutter, adding that comparable sales growth of 4.8% for company-operated restaurants had exceeded expectations. “We believe we have the right strategies in place to support long-term sales and profitability growth.”

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