First Quarter Highlights:
- Sales were
$132.6 million compared to$154.5 million for the same period last year (current period included approximately 40 fewer restaurants as well as the reduction of hours during the morning daypart in certain restaurants). - Earnings (loss) from Operations were
$(10.6) million compared to$(3.7) million for the same period last year (current period included one-time charges of$4.5 million associated with planned permanent restaurant closures and restructuring costs). - Net Earnings (loss) were
$(9.6) million compared to$(4.3) million for the same period last year. - Consolidated EBITDA (a non-GAAP measure) was
$(4.5) million compared to$2.2 million for the same period last year.
"Through our strategic partnership with Wendy’s “Project Fresh” initiative, we made deliberate, high-conviction decisions to optimize our portfolio by closing almost 60 select locations to date and reducing hours during the morning daypart in certain locations to optimize hours of operation. These strategic initiatives are expected to unlock approximately
2026 Full-Year Outlook: Better Margins Ahead:
- Sales:
$520 million to$530 million - Restaurant Operating Income:
$35 million to$40 million - Adjusted EBITDA growth: +45% to +55%
Management continues to work proactively with its lenders and franchisor on adjusted contract terms. These adjusted agreements have provided the Company with the necessary time to work collaboratively with its lenders while focusing on restaurant financial performance. While not where we ultimately want to be yet, the Company is making progress on its turnaround plan and moving towards a return to normalized contract terms.
The Company's five-year growth plan includes a rebuilding and stabilization phase, while ultimately resuming image activation across its Wendy's portfolio, expanding Morning Belle locations, and executing Bojangles restaurant conversions. As we work toward normalizing credit agreements and positioning the Company for its next phase of growth, we are actively pursuing refinancing opportunities and strategic capital partnerships to maximize long-term shareholder value.
About the Company:
The Company’s current and publicly available information pursuant to amended SEC Rule 15c2-11 and FINRA Rule 6432 can be found at www.otcmarkets.com, under the stock symbol MHGU/Disclosures 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.
(616) 776-2600 ext. 1012
