ICH Corporation Announces Third Quarter 2000 Results
SAN DIEGO--(BUSINESS WIRE)--Nov. 10, 2000--I.C.H. Corporation (ICH or the Company) (AMEX:IH - news) today announced its results of operations for the third quarter of 2000.
ICH is a Delaware holding corporation which, through its principal operating subsidiaries, currently operates 208 ``Arby's'' restaurants located primarily in Michigan, Pennsylvania, Texas, New Jersey, Florida and Connecticut as well as 72 family dining restaurants under the ``Lyon's'' name located in California and Oregon.
Results for the three months ended September 30, 2000
Net loss for the three months ended September 30, 2000 amounted to $(121,000), or $(.04) per common share, compared to net income of $1.2 million, or $.43 per common share ($.34 per diluted common share) in the prior year comparable period.
The Company's revenues for the three month period ended September 30, 2000 were $64.6 million, an increase of $3.3 million, or 5.3%, over the prior year comparable period. Sybra's sales for the period were $41.0 million, an increase of $4.8 million, or 13.3%, over the prior year comparable period. This increase is a result of sales from new store openings and acquisitions, offset by a same store sales decrease of 2.8% and the disposition of 9 Arby's units in the fourth quarter of 1999. Sales from the Company's Lyon's restaurants for the period were $23.1 million, a decrease of $1.8 million, or 7.4% from the prior year comparable period, principally due to a same store sales decrease of 4.8%, the permanent closing of one store in the fourth quarter of 1999, the temporary closing of one store for remodeling during the quarter and one store closed due to fire in July, 2000.
The Company's operating margin (restaurant sales less restaurant costs and expenses, depreciation and amortization) for the period was $5.9 million, or 9.2% of sales, a decrease of $1.6 million from the prior year comparable period. Sybra's operating margin for the period was $5.3 million, or 12.8% of sales, which represents a decrease of $84,000 from the prior year comparable operating margin of $5.4 million. Operating margin from the Company's Lyon's restaurants for the period was $617,000, or 2.7% of sales, which represents a decrease of $1.5 million from the prior year comparable period.
The Company's EBITDA (earnings before interest, income taxes, depreciation and amortization), decreased to $4.5 million from $5.5 million, a decrease of $1.0 million from the prior year comparable period. Sybra's EBITDA for the period was $4.4 million, or 10.9% of sales, an increase of $240,000 over the prior year comparable period. EBITDA from the Company's Lyon's restaurants for the period was $50,000, or 0.2% of sales, a decrease of $1.4 million from the prior year comparable period. Lyon's financial performance during the quarter was adversely impacted by certain non-recurring items including pre-opening expenses related to remodeled Lyon's units and elevated controllable expenses due primarily to Lyon's previous conversion to an unregulated utility provider which has subsequently been reversed.
Results for the nine months ended September 30, 2000
Net loss for the nine months ended September 30, 2000 includes a non-recurring, pre-tax charge of $4.9 million ($2.9 million after the affect of income taxes) primarily related to required payments associated with the June 2000 departure of the former CEO of the Company. As a result, the company experienced a net loss of $2.2 million, or $(.75) per common share, compared to net income of $3.4 million, or $1.20 per common share ($.96 per diluted common share), in the prior year comparable period. Excluding the effects of the non-recurring charge, net income decreased 77.3% to $762,000, or $.27 per common share ($.24 per diluted common share), from $3.4 million, or $1.20 per common share ($.96 per diluted common share), in the prior year comparable period.
The Company's revenues for the nine month period ended September 30, 2000 were $187.5 million, an increase of $5.3 million, or 2.9%, over the prior year comparable period. Sybra's sales for the period were $117.5 million, an increase of $11.0 million, or 10.3%, over the prior year comparable period. This increase is a result of sales from new store openings and acquisitions, offset by a same store sales decrease of 1.6% and the disposition of 9 Arby's units in the fourth quarter of 1999. Same store sales were down 0.5% at Sybra's 143 free-standing units, and down 8.0% at its 25 mall and food court locations. Sales from the Company's Lyon's restaurants for the period were $69.3 million, a decrease of $6.1 million, or 8.1%, from the prior year comparable period, principally due to a same store sales decrease of 6.3%, the permanent closing of one store in the fourth quarter of 1999, the temporary closing of three stores for remodeling during the period and one store closed due to fire in July, 2000.
The Company's operating margin for the period, excluding the effects of the non-recurring charge, was $19.7 million, or 10.6% of sales, a decrease of $2.7 million from the prior year comparable period. Sybra's operating margin for the period was $16.8 million, or 14.3% of sales, an increase of $749,000 over the prior year comparable period. Operating margin from the Company's Lyon's restaurants for the period was $3.0 million, or 4.3% of sales, a decrease of $3.4 million from the prior year comparable period.
The Company's EBITDA, excluding the effects of the non-recurring charge, decreased $1.6 million to $14.2 million, from $15.8 million in the prior year comparable period. Sybra's EBITDA for the period was $13.0 million, or 11.1% of sales, an increase of $1.0 million over the prior year comparable period. EBITDA from the Company's Lyon's restaurants for the period was $1.4 million, or 2.0% of sales, a decrease of $2.9 million from the prior year comparable period. Lyon's financial performance during the period was adversely impacted by certain non-recurring items including pre-opening expenses related to remodeled Lyon's units and elevated controllable expenses due primarily to Lyon's previous conversion to an unregulated utility provider which has subsequently been reversed.
Commenting on the Company's results, Co-Chairmen and Chief Executive Officers John A. Bicks and Robert H. Drechsler stated: ``The company's results for the quarter reflect the mixed impact of several variables upon our two principal operating subsidiaries. First, in a period during which many quick-serve chains experienced sales declines, the vast majority of the company's Arby's units have fared quite well. Same store sales at the company's free-standing Arby's units have been essentially flat for the year to date, while year over year sales declines have generally been confined to the company's mall and food court Arby's units, attributable primarily to decreased levels of retail mall traffic. Free-standing units currently account for roughly 90% of the company's total Arby's restaurants, and the company does not currently anticipate the development of any new mall or food court Arby's units. Importantly, the same store sales figures do not include the company's newly-developed Arby's units, which have generally continued to perform at or above the company's expectations, and are generating average annual unit sales of more than $1 million, or about 30% above the overall brand average unit volume. We are particularly pleased with the recent successful introduction of the Arby's Market Fresh sandwich line in Sybra's northern region, which contributed to very strong same store sales in that region and to positive overall Sybra same store sales in October, 2000. In short, with $5.7 million of pre-tax income on a trailing twelve-month basis excluding the non-recurring charge, Sybra continues to be profitable and healthy even in the face of a challenging quarter and a very soft year in the quick-serve sector.''
``Sales and profitability at the company's Lyon's units continue to be significantly and negatively impacted by the intense competition in the family-dining sector as well as by increased operating costs, most notably labor costs. In addition, Lyon's incurred certain non-recurring charges during the period, including pre-opening expenses related to remodeled Lyon's units and significantly elevated utility costs associated with the chain's previous conversion to an unregulated utility provider coupled with abnormally high power costs in northern California over this past summer. The chain has subsequently converted back to a regulated utility provider. The company continues to evaluate all available options for maximizing the value of the Lyon's chain to the company's shareholders.'' |
