Meritage Reports Third Quarter 2020 Results; Strong Sales and Earnings Growth
Meritage Hospitality Group (OTCQX: MHGU) reported a strong third quarter for 2020, reflecting a 15.9% increase in sales to $136.6 million compared to the previous year. Earnings from operations rose 40.0% to $8.2 million, while net earnings surged 74.0% to $4.6 million. Consolidated EBITDA also increased 26.5% to $12.8 million. The company reinstated preferred stock dividends effective October 1, 2020. For the nine months, sales increased 8.6% to $376.1 million, although net earnings were $7.0 million, down from $10.5 million due to COVID-19 related expenses. Looking ahead, Meritage aims for ongoing growth through new restaurant developments.
- Sales increased 15.9% to $136.6 million in Q3 2020.
- Earnings from operations rose 40.0% to $8.2 million.
- Net earnings surged 74.0% to $4.6 million.
- Consolidated EBITDA grew 26.5% to $12.8 million.
- Reinstated preferred stock dividends effective October 1, 2020.
- Sales for the nine months rose 8.6% to $376.1 million.
- Commited to build 40 new Wendy's restaurants by the end of 2024.
- Net earnings decreased to $7.0 million from $10.5 million due to COVID-19 expenses.
GRAND RAPIDS, Mich., Oct. 08, 2020 (GLOBE NEWSWIRE) -- Meritage Hospitality Group Inc. (OTCQX: MHGU), the nation’s premier franchise operator, today reported financial results for the third quarter and the nine months ended September 27, 2020.
2020 Third Quarter Highlights:
- Sales for the three months increased 15.9% to $136.6 million compared to $117.9 million for the same period last year.
- Earnings from Operations increased 40.0% to $8.2 million compared to $5.8 million for the same period last year.
- Net Earnings increased 74.0% to $4.6 million compared to $2.6 million for the same period last year.
- Consolidated EBITDA (a non-GAAP measure) increased 26.5% to $12.8 million compared to $10.1 million for the same period last year.
- Based on stabilized and improved performance, the Company reinstated payment on its preferred stock dividends effective October 1, 2020.
“Our continued strong sales and earnings performance in the third quarter reflect the underlying strength of our Wendy’s franchise and restaurant operating teams. We continue to stay focused on our strategic operating priorities, including employee and customer safety while delivering speed, convenience and affordability,” stated Meritage CEO, Robert E. Schermer, Jr.
“Newly built, reimaged and acquired Wendy’s restaurants continue to perform well and should provide a significant earnings catalyst for 2021, which will be further supported by the Wendy’s breakfast program and new product introductions. Our geographically diverse business structure and strategic operating platform investments have positioned us well for industry-leading returns and long-term value creation for our shareholders and employees,” added Schermer.
2020 Nine Months Highlights:
- Sales for the nine months increased 8.6% to
$376. 1 million compared to $346.4 million for the same period last year. - Earnings from Operations increased 5.1% to $18.6 million compared to $17.6 million for the same period last year.
- Net Earnings were $7.0 million compared to $10.5 million for the same period last year. (Net Earnings includes a negative year over year GAAP charge of approximately
$3.2 million resulting from expenses incurred with COVID-19). - Consolidated EBITDA (a non-GAAP measure) was $33.2 million compared to $35.2 million for the same period last year.
- The Company added six new Wendy’s restaurants during the first nine months of the year, to finish the third quarter with 339 restaurants in operation.
2021 Outlook: Robust Growth Ahead
The Company has committed significant long-term capital resources to Wendy’s brand initiatives, including an agreement to build 40 new Wendy’s restaurants by the end of 2024 under the Groundbreaking Incentive Program.
Meritage is targeting robust sales growth in 2021, driven by new restaurant development, reimaged locations and restaurant acquisitions. As we navigate our way forward in the new restaurant industry normal, the Company’s goal continues to be rewarding shareholders with dividend growth commensurate with earnings growth.
Meritage continues to distinguish itself as a leader and innovator in the quick service and family restaurant segments, striving for best in class results through a performance based culture committed to operational excellence, strategic acquisitions and real estate development.
Meritage Hospitality Group is one of the nation’s premier restaurant operators, with 340 restaurants in operation located in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas and Virginia. Meritage is headquartered in Grand Rapids, Michigan, operating with a workforce of approximately 10,400 employees. The Company has approximately 9.4 million diluted weighted average common shares outstanding. The Company’s public filings can be viewed at www.otcmarkets.com, under the stock symbol MHGU, or the Company’s website www.meritagehospitality.com.
SAFE HARBOR STATEMENT
Certain information in this new release, particularly information regarding future economic performance and finances, and plans, expectations and objectives of management, constitutes forward-looking statements. Factors set forth in our Safe Harbor Statement, in addition to other possible factors not listed, could affect the Company’s actual results and cause such results to differ materially from those expressed in forward-looking statements. Please review the Company’s Safe Harbor Statement at http://www.meritagehospitality.com .
CONTACT:
Robert E. Schermer, Jr., CEO
Meritage Hospitality Group Inc.
(616) 776-2600
FAQ
What were Meritage Hospitality Group's Q3 2020 earnings results?
How did Meritage's sales perform in the third quarter of 2020?
What is Meritage's outlook for growth in 2021?
What is the stock symbol for Meritage Hospitality Group?
When did Meritage reinstate its preferred stock dividends?
