KELSEY'S ANNOUNCES RECORD FOURTH QUARTER AND YEAR END RESULTS
-- Company achieves 67% growth in fiscal 1998 corporate sales, surpassing
milestone of $100 million in annual sales --
TSE Symbol: KSY
OAKVILLE, Ont., Sept. 9 /CNW/ - Kelsey's International Inc.
(''Kelsey's''), a leading Canadian operator of casual dining restaurants,
today announced record financial performance for the fourth quarter and year
ended July 5, 1998. Kelsey's 1998 corporate sales exceeded $100 million for
the first time, and the company's fiscal 1998 fourth quarter marked its 16th
consecutive quarter of year-over-year increasing sales and earnings.
For the sixteen weeks ended July 5, 1998, corporate sales increased 78%
to $38.0 million, compared to $21.4 million in the fourth quarter of fiscal
1997. Net earnings increased 48% to $1.2 million, or $0.03 per share, compared
with $804,878, or $0.02 per share in the same period a year ago.
Kelsey's fiscal 1998 corporate sales increased 67% to a record $102.6
million, compared with $61.3 million in fiscal 1997. Net earnings increased
40% to $2.4 million, or $0.15 per share, compared with $1.7 million, or $0.12
per share a year ago. Cash flow from operations increased 73% to a record
$10.2 million, or $0.64 per share, compared with $5.9 million, or $0.41 per
share in fiscal 1997.
System sales, which are the combined sales of corporate and franchise
restaurants, were $145.1 million for the 52 weeks ending July 5, 1998. This
represents an increase of $49.6 million (52%) in comparison to fiscal 1997.
Kelsey's opened 17 new corporate restaurants in fiscal 1998, including 4
new Outback Steakhouses, 4 new Montana's Cookhouse Saloons and 9 new corporate
Kelsey's. The company also opened 4 new Kelsey's franchise locations and
reacquired a franchise restaurant in Grand Prairie, Alberta and converted it
to a corporate restaurant, bringing the total number of restaurants in
operation at year end, system-wide to 81.
Nils Kravis, President and COO of Kelsey's, commented: ''We have
delivered our planned development program, and in many respects the results we
have achieved have exceeded our expectations. Montana's has had tremendous
success in Canada and our new format Kelsey's restaurants are delivering sales
30% higher than our established base. The Outback continues to be well
received in the Canadian marketplace. The success we have achieved is the
result of a highly focussed and disciplined business strategy, combined with
the dedication of our employees and business partners.''
As a result of the strong operating performance of Montana's Cookhouse
Saloon, Kelsey's has implemented a more aggressive development program for
this brand. The company will be opening its first restaurant in the United
States, with a Montana's Cookhouse Saloon in Orchard Park, New York in
September and plans to open 10 - 13 new restaurants in Ontario and Alberta in
fiscal 1999. Kelsey's will also be franchising the Montana's brand in the
coming year.
In addition to its development strategy for Montana's Cookhouse Saloon,
Kelsey's plans to open 6 to 8 new corporate Kelsey's, 4 to 6 new Outback
Steakhouses and 4 to 6 new franchise Kelsey's in fiscal 1999. New Kelsey's
restaurants will continue in Ontario and Alberta with the company also
enhancing its national market presence with new restaurants in Quebec, British
Columbia, Manitoba and Saskatchewan in the coming year. Expansion of Outback
Steakhouse will be concentrated in Ontario.
Kelsey's International Inc. (''Kelsey's'') is a leading Canadian operator
of casual dining restaurants. Its restaurant brands include Kelsey's
Neighbourhood Bar & Grill and Montana's Cookhouse Saloon, the company is also
a franchisee of U.S. based Outback Steakhouse, Inc. The company currently
operates 45 corporate and 23 franchised Kelsey's restaurants, 7 Montana's
Cookhouse Saloons and 6 Outback Steakhouses.
A summary of the financial statements for the fiscal periods ended July
5, 1998 and July 6, 1997 are attached.
<<
KELSEY'S INTERNATIONAL INC.
-------------------------------------------------------------------------
Consolidated Statement
of Earnings
(unaudited) Fourth Quarter Four Quarters
------------------ ------------------
1998 1997 1998 1997
-------------------------------------------------------------------------
Sales from
corporate
restaurant
operations $ 38,034,161 $ 21,394,021 $102,558,103 $ 61,336,393
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net corporate
restaurant
earnings 6,383,008 3,707,035 15,768,065 9,762,465
Earnings from
franchise
operations 531,197 424,940 1,417,850 1,109,318
------------ ------------ ------------ ------------
Total earnings
from operations 6,914,205 4,131,975 17,185,915 10,871,783
Corporate and
operations
overhead 2,315,249 1,473,561 6,199,888 4,340,527
Amortization of
capital and
intangible
assets 2,251,165 1,194,480 5,897,428 3,162,767
Interest expense 363,894 81,129 801,264 407,760
Legal settlement (300,000) -- (300,000) --
Loss on disposal
of assets 127,220 -- 225,178 --
------------ ------------ ------------ ------------
Earnings before
taxes and non
controlling
interest 2,156,677 1,382,805 4,362,157 2,960,729
Income taxes (968,000) (572,000) (1,960,000) (1,235,000)
------------ ------------ ------------ ------------
Earnings before
non controlling
interest 1,188,677 810,805 2,402,157 1,725,729
Non controlling
interest 3,661 (5,927) (5,339) (12,927)
------------ ------------ ------------ ------------
Net earnings $ 1,192,338 $ 804,878 $ 2,396,818 $ 1,712,802
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Earnings per
share $ 0.03 $ 0.02 $ 0.15 $ 0.12
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
-------------------------------------------------------------------------
Consolidated Statement of Changes Four Quarters
in Financial Position (unaudited) ----------------------
1998 1997
-------------------------------------------------------------------------
Operating Activities
Cash from operations 10,225,551 5,899,596
Changes in working capital 2,659,269 1,403,560
------------- -------------
Cash provided by operating activities 12,884,820 7,303,156
------------- -------------
Investing Activities
Additions to capital assets (15,695,099) (12,096,314)
(Increase) reduction to assets under
development (3,195,158) 818,914
Additions to intangible assets (5,803,527) (3,080,330)
(Increase) reduction in loans and
notes receivable - net 8,478 (27,312)
------------- -------------
Cash consumed by investing activities (24,685,306) (14,385,042)
------------- -------------
Financing Activities
Issuance of share capital 357,010 66,461
Issuance of special warrants -- 3,922,138
Increase in long term debt 8,813,829 1,600,068
Decrease in deferred exchange loss (63,930) --
------------- -------------
Cash provided by financing activities 9,106,909 5,588,667
------------- -------------
Net change in cash for the year (2,693,577) (1,493,219)
Cash, beginning of year 2,182,232 3,675,451
------------- -------------
Cash (Bank indebtedness), end of year $ (511,345) $ 2,182,232
------------- -------------
------------- -------------
Cash flow per share $ 0.64 $ 0.41
------------- -------------
------------- -------------
-------------------------------------------------------------------------
Consolidated Balance Sheet (unaudited) July 5, 1998 July 6, 1997
-------------------------------------------------------------------------
Current Assets 5,609,009 5,295,801
Capital Assets & Assets Under Development 32,921,373 17,975,471
Loans and Notes Receivable 816,079 807,557
Intangible Assets 8,355,983 4,730,707
------------- -------------
Total Assets $ 47,702,444 $ 28,809,536
------------- -------------
------------- -------------
Current Liabilities 15,582,715 8,198,729
Long Term Debt 10,109,158 2,996,261
Deferred Taxes 2,262,166 561,378
Deferred Exchange Loss (63,930) --
Non Controlling Interest 80,834 75,495
------------- -------------
Total Liabilities 27,970,943 11,831,863
------------- -------------
Shareholders' Equity
Share capital 14,124,991 13,767,981
Retained earnings 5,606,510 3,209,692
------------- -------------
Total Shareholders' Equity 19,731,501 16,977,673
------------- -------------
Total Liabilities and
Shareholders' Equity $ 47,702,444 $ 28,809,536
------------- -------------
------------- -------------
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%SEDAR: 00000223E
-30-
For further information: Bruce Smith, VP Finance and Chief Financial
Officer, Tel No.: (905) 842-5510 |
