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For the quarter ended June 30, 2000, the company incurred a net loss of $23,000, or $0.02 per share, compared with net earnings of $1.1 million, or $0.74 per share, for the same quarter in 1999. Earnings for the fiscal third quarter of 1999 include a benefit of $790,000 to reduce insurance reserves and a $122,000 gain on the sale of assets (a total of $912,000 in gains). The recent quarter did not include benefits from insurance reserve reductions, but did include $32,000 in gain on sale of assets.
Total sales for the recent third quarter were $14.4 million compared to total sales of $14.7 million reported for the same period in 1999. Same-store sales decreased 1.9% for the recent third quarter. Average sales per unit were flat at $304,000 for the quarter just ended compared to $306,000 for the same period in 1999.
For the nine months just ended, net earnings were $440,000, or $0.30 per share, compared to $1.7 million, or $1.21 per share, for the same period in 1999. These results include benefits from reducing insurance reserves by $1,020,000 in the first nine months of 2000 compared with $1,039,000 in the first nine months of 1999. The nine-month period just ended includes $43,000 in gain on the sale of assets, compared to $359,000 in gain on the sale of assets for the first nine months of 1999.
Total sales were $41.8 million for the first nine months of 2000 compared to total sales of $42.8 million for the first nine months of 1999. Same-store sales were down 2.6% for the recent nine-month period. Average unit sales were $874,000 for 2000 compared with average unit sales of $891,000 for 1999.
"Lower sales combined with an increase in salaries and related expenses lowered earnings for the recent quarter," said Hollis Taylor, president and CEO. "Two of our Houston restaurants were closed during the second quarter to be converted into our new Panchito's $4.99 Buffet(TM) format to improve their performance. We also strengthened our management team during the quarter with the addition of a new vice president of marketing, a new vice president-controller and a new member on our Board of Directors. We are confident that these investments we are making in our restaurants and in our people will improve the company's long-term financial performance."
Taylor noted that the company's future profitability depends on increasing restaurant revenues and reducing key costs, primarily labor. Management will be addressing these issues through its marketing programs, reorganization of operations management and the continuation of its remodeling and brand extension program.
"While it is still early, our reimaging plan is proving to be successful," added Taylor. "While we've converted two of our units into our new Panchito's $4.99 Buffet format, we plan to convert one more unit into this new format in 2000 as cash flow permits. We are confident that this new brand extension will make our restaurants more competitive and increase customer counts by providing customers great value and convenience. If this strategy continues to be successful, we will proceed with rolling out this new concept to other units in select markets."
"Our new Pancho's Buffet and Grill(TM) concept, which opened in Mesquite, Texas this past December, continues to produce sales at approximately 60% above company average and more than 40% above what our Mesquite unit produced in sales prior to being remodeled," added Taylor. "We plan to convert one more restaurant into the Pancho's Buffet and Grill(TM) in 2000, again depending on available cash flow. We are encouraged by the strong performance of this new design and brand extension and anticipate that it could be our flagship concept for the future."
Based in Fort Worth, Pancho's Mexican Buffet, Inc. is the only publicly-held company offering all-you-can-eat Mexican food in a buffet-style format. The company operates 48 restaurants in Texas, Arizona, Louisiana, New Mexico and Oklahoma.