Columbus, Ohio-based Max & Erma’s Restaurants has reported revenues of US$35.7m for its third quarter, an increase of 8% year on year.
Net income and net income per share rose 37% and 36% respectively, to a quarterly record of US$881,000, US$0.34 per diluted share, for Q3 2002, from US$642,000, US$0.25 per diluted share, year on year.
Year-to-date, the full-service restaurant chain reported that revenues have risen 7% to US$116m for the first 40 weeks of 2002 from US$108.7m for the comparable 2001 period. Through the first three quarters of 2002 net income rose 34% to US$2.6m from US$1.9m for 2001. Net income per share increased 32% year-to-date to US$0.99 per diluted share from US$0.75 per share for 2001.
CEO and chairman Todd Barnum said that he is pleased with every aspect of the company’s performance this year. He noted that growth in both company-owned and franchised restaurants; positive same-store sales and outstanding operating margins have all contributed to 2002 record results. He noted that net income and earnings per share through the Q3 2002 have already exceeded all of FY 2001.
Barnum said that same-store sales increased 0.6% from the Q3 2001 to the Q3 2002 and are now up 1% year-to-date. In light of the general economy and an extremely hot summer, which may have had some negative impact on sales, he is very pleased with sales at the older restaurants.
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By GlobalDataBarnum went on to say that through the end of the Q3 2002 the company has opened three restaurants. Two more openings are planned for the Q4.
On the franchising side, Barnum said that during the Q3 a franchised restaurant opened in Evansville, Indiana, bringing total franchised openings for the year to three and 12 in total. More importantly, he said that during the quarter the firm signed multi-unit franchise agreements for three restaurants over six years in southern Indiana and nine restaurants over ten years in the Wilkes-Barre/Scranton, Pennsylvania and western New York area and for a single restaurant in the Cincinnati, Ohio Airport. Multi-unit franchisees are now under agreement to open 25 additional restaurants over the next ten years. The firm anticipates six to seven franchised openings in FY 2003.
Barnum also said that the restaurants have generated some of the best operating margins in the firm’s history this year. A programme of modest semi-annual price increases coupled with stable inventory prices has resulted in low costs of sales percentage. Barnum added that an improving labour market has stabilized costs, while reduced utility costs and marketing expenses have also contributed to improved margins.
