SOURCE: Spicy Pickle Franchising, Inc.
DENVER, CO–(Marketwire – September 2, 2010) – Spicy Pickle Franchising, Inc. (
fast casual restaurant operator and franchisor of its Spicy Pickle and
Bread Garden Urban Café brands, announced today its results for the second
quarter and six months ended June 30, 2010.
Revenue for the second quarter totaled $1,215,441, almost even with the
$1,223,858 in the year ago second quarter. Franchise fees and royalties for
the quarter rose to $541,378 compared with $493,413 in the same quarter
2009. The company noted that a majority of its revenue is derived from its
owned restaurants. In May, 2010, Spicy Pickle closed one of its restaurants
and is looking for a site to relocate it. Therefore, the second quarter
ended with six company owned stores operating versus seven at the end of
the second quarter a year ago. For the six months, revenues amounted to
$2,188,592 versus $2,227,453 for the same period a year earlier. Franchise
fees and royalties for the six months were $895,832, up from $798,388 for
the first half of 2009.
Restaurant and bakery operating costs were down slightly in the quarter to
$782,722 from $793,769 and general and administrative expenses were also
lower at $581,047 versus $652,503 in the year ago quarter. Restaurant and
bakery operating costs for the first half were also down slightly at
$1,531,498 compared with $1,577,981 in the year ago half. General and
administrative expenses were higher in the half this year at $1,597,726
compared with $1,365,300 in the year ago same half, mainly due to stock
based compensation expenses of $298,765 in the first quarter this year
versus negligible amounts in the other periods for shares issued to
employees in consideration of salary reductions and stock options.
The company’s net loss attributable to common shareholders for the second
quarter was cut to $230,220 versus a net loss for common shareholders of
$317,694 in the year ago quarter. For the six months, the net loss to
common shareholders was $1,030, 392 compared with a net loss of $885,978.
After minor foreign currency translation, the comprehensive loss was equal
to nil cent a share in the second quarter 2010 versus one cent in the same
quarter last year and one cent in the first half versus two cents in the
year ago half, based on 82,494,274 weighted average shares outstanding in
the second quarter and half this year and 54,387,357 and 54,378,422 in the
quarter and half last year respectively.
At June 30, 2010, the company had total assets of $5.4 million with current
assets of $1,083,826 and current liabilities of $1,456,130. Of its current
assets, $461,113 was cash and equivalents, down from June 30, 2009, and
$266,705 was in trade accounts receivable which was up from the prior year.
Of its current liabilities, $440,500 was deferred franchise fee revenue and
not a cash liability. These funds are taken into revenue when the
franchisee opens the restaurant or a franchise agreement is terminated but
they are available immediately as working capital. The company carried no
long term debt on June 30 compared with $467,000 a mid-year 2009 as
$451,307 of the long term debt was moved up to current and notes payable to
related parties rose to $1,210,605 from $676,927 at the same point last
year. Shareholders’ equity totaled $2.6 million, equal to 3.2 cents a
share.
Just joining the company as CEO in April this year, Mark Laramie stated,
“The second quarter was the first in which a new management structure and
turnaround operating plan began to take shape. At the end of July we sent a
letter to shareholders outlining our strategic directions. We cannot
divorce ourselves from economic conditions, but at this time we are
optimistic that the basic ingredients are here from which to build a
successful restaurant franchise company. We are working diligently to
improve Spicy Pickle’s operations and results. Some of our most positive
elements include our proven brands, our strong board, our management team
and our existing franchise operators. We have put a program in place to
strengthen franchisee relations and operations and hired a new marketing
director. We expect these and other moves we are making to have positive
effects.”
Summary financial data:
Statement of
operations data Three Months Ended June30, Six Months ended June 30,
2010 2009 2010 2009
========================== ==========================
Total revenue $ 1,215,441 $ 1,223,858 $ 2,188,592 $ 2,227,453
Operating
expenses $ 1,391,365 $ 1,454,895 $ 3,129,224 $ 2,943,281
Comprehensive
loss ($ 240,908)($ 329,899)($ 1,041,047)($ 918,549)
Weighted average
shares
outstanding 82,494,272 54,387,357 82,494,274 54,378,422
Net loss per
share ($ 0.00) $ 0.01)($ 0.01)($ 0.02)
June 30, December
Balance sheet 2010 31, 2009
=========== ===========
Total current
assets $ 1,083,826 $ 1,288,423
Total assets $ 5,408,038 $ 5,839,194
Total current
liabilities $ 1,456,130 $ 1,208,359
Total noncurrent
liabilities $ 1,350,684 $ 1,290,328
Total
stockholders'
equity $ 2,601,224 $ 3,343,507
About Spicy Pickle™ and Bread Garden:
Founded in 1999, Spicy Pickle Franchising, Inc. (
quality meats and fine artisan breads, baked fresh daily, along with a wide
choice of eight different cheeses, twenty-two different toppings, and
fourteen proprietary spreads to create healthy and delicious panini and sub
sandwiches with flavors from around the world. As a leading “fast-casual”
concept, Spicy Pickle offers menu items that are far beyond traditional
fast food but without the price point of casual dining. The hallmark of a
Spicy Pickle restaurant is quality, service and an enjoyable atmosphere.
The company is headquartered in Denver, Colorado, with restaurants open
across 11 states and more in development nationwide. Spicy Pickle
Franchising, Inc. also operates as franchisor for Bread Garden Urban Cafes,
a bakery café concept with restaurants in the metropolitan Vancouver,
Canada area. Bread Garden Urban Cafes serve coffee, pastries and breakfast
items as well as lunch and dinner along with a wide variety of desserts and
are found in typical high density urban settings along with specialty
locations in two airports in British Columbia. To find out more about Spicy
Pickle (
Forward-Looking Statements:
Certain statements in this press release, including statements regarding
the number of restaurants we intend to open, are forward-looking
statements. We use words such as “anticipate,” “believe,” “could,”
“should,” “estimate,” “expect,” “intend,” “may,” “predict,” “project,”
“target,” and similar terms and phrases, including references to
assumptions, to identify forward-looking statements. The forward-looking
statements in this press release are based on information available to us
as of the date any such statements are made and we assume no obligation to
update these forward-looking statements. These statements are subject to
risks and uncertainties that could cause actual results to differ
materially from those described in the statements. These risks and
uncertainties include, but are not limited to, the following: factors that
could affect our ability to achieve and manage our planned expansion, such
as the availability of a sufficient number of suitable new restaurant sites
and the availability of qualified franchisees and employees; risks relating
to our expansion into new markets; the risk of food-borne illnesses and
other health concerns about our food products; changes in the availability
and costs of food; changes in consumer preferences, general economic
conditions or consumer discretionary spending; the impact of federal, state
or local government regulations relating to our franchisees and employees,
and the sale of food or alcoholic beverages; the impact of litigation; our
ability to protect our name and logo and other proprietary information; the
potential effects of inclement weather; the effect of competition in the
restaurant industry; and other risk factors described from time to time in
our SEC reports.