Spicy Pickle Franchising Reports Third Quarter Results
DENVER, CO --(Marketwire - November 16, 2010) - Spicy Pickle Franchising, Inc. (OTCBB: SPKL), fast casual restaurant operator and franchisor of its Spicy Pickle U.S. and BG Urban Café Canadian brands, today announced results for its third quarter and nine months ended September 30, 2010.
For the third quarter, the first full quarter under new management, revenues increased to $1,132,631 from $954,188. For the nine months, revenues increased to $3,321,222 from $3,181,641. Revenues were higher due to increases in franchise fees, royalties and rebates which totaled $487,375 for the quarter vs $295,979 in the year ago quarter, and $1,383,206 for the nine months, up from $1,094,367 for the nine months the year before.
The loss from operations totaled $810,616 for the quarter compared with $608,190 for the year ago quarter and $1,851,663 for the nine months vs $1,570,875 for the nine months of 2009.
"Approximately $350,000 in expenses for the quarter was either non-cash or severance related and we have increased our investments in re-branding the Spicy Pickle and Urban Cafés concepts. Additionally, we have increased our advertising spending for both brands and have invested in strengthening our management team and board of directors," reported CEO Mark Laramie.
"Most importantly, we are now seeing increased restaurant average weekly sales. Furthermore, we are beginning to experience improved unit level economics as a result of our new supply chain. However, company owned store revenue has been reduced due to closing one of our company owned restaurants pending relocation. Thus, we are now operating six rather than seven company owned units. A full discussion is included in our current 10Q report and we encourage interested parties to review it," said Mr. Laramie.
The company had total assets of $5.3 million at September 30, 2010, versus $5.8 million at the same time a year ago. Current assets amounted to $1.13 million versus current liabilities of $1.45 million of which the $350,000 in deferred franchise revenue is a non-cash obligation. The company reported it has borrowed about $1 million on its $2 million line of credit.
"We are still somewhat dependent on the economy and consumer spending, but we believe we have accomplished a great deal in a short time. We believe that through the marketing and re-branding investments we are making, and will continue to make, we are positioning both of our brands for future growth and development. We are optimistic 2011 will be a very active year in terms of franchisee development activities," concluded Laramie.
About Spicy Pickle® and BG Urban Café™ Brands:
Founded in 1999, Spicy Pickle Franchising, Inc. (OTCBB: SPKL) serves high quality meats and fine artisan breads baked fresh daily, along with a wide choice of eight cheeses, 22 toppings, and 14 proprietary spreads to create healthy, delicious panini and sub sandwiches with flavors from around the world. As a leading "fast-casual" concept, Spicy Pickle restaurants offer menu items that are far beyond traditional fast food without the price points of casual dining. The hallmark of a Spicy Pickle restaurant is great food and quality service in an enjoyable atmosphere. The company is headquartered in Denver, Colorado, with restaurants in 10 states. A Spicy Pickle Franchising subsidiary owns and operates as franchisor of the BG Urban Café brand in the metropolitan Vancouver, Canada area. BG Urban Café locations serve coffee, pastries, breakfast items, lunch, dinner and a wide variety of desserts. Visit our website at www.spicypickle.com.
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.