Industry News | March 16, 2017

Papa Murphy’s 'Made Progress in 2016'

Papa Murphy’s Holdings, Inc. announced complete financial results for the 14-week fourth quarter and 53-week fiscal year ended January 2, having previously announced preliminary results for those periods.

Key financial highlights for the 14-week fourth quarter of 2016 ended January 2, 2017, compared to the 13-week fourth quarter ended December 28, 2015, were as follows:

Revenue increased 5 percent to $35.5 million from $33.8 million. Revenue in the fourth quarter of 2016 included approximately $2.7 million attributed to the extra operating week.

Domestic system comparable store sales decreased 7.8 percent on a comparable 13-week basis, including a 7.5 percent decrease at domestic franchise-owned stores and an 11.1 percent decrease at company-owned stores.

Net income was $1.5 million for the fourth quarter of 2016, or $0.09 per diluted share, compared to net income of $2.6 million, or $0.16 per diluted share, for the fourth quarter of 2015. Net Income in the fourth quarter of 2016 included an approximate $0.1 million benefit attributed to the extra operating week.

Papa Murphy’s opened 28 new stores in the quarter, including 27 in the U.S., compared to 46 new stores opened in the fourth quarter of 2015, including 40 in the U.S.

Key financial highlights for the 53-week fiscal year ended January 2, 2017, compared to the 52-week fiscal year ended December 28, 2015, were as follows:

Revenue increased 5.6 percent to $126.9 million, from $120.2 million. Fiscal 2016 results included approximately $2.7 million in revenue attributed to the extra operating week.

Domestic system comparable store sales decreased 5.2 percent on a comparable 52-week basis, including a 5.0% decrease at domestic franchise-owned stores and a 7.3 percent decrease at company-owned stores.

Net income attributable to Papa Murphy's was $2.6 million, or $0.16 per diluted share, compared to $4.9 million, or $0.29 per diluted share, in fiscal year 2015. Net Income in fiscal 2016 included an approximate $0.1 million benefit attributed to the extra operating week.

Jean Birch, board chair and interim chief executive officer of Papa Murphy’s Holdings, Inc., says, “While top-line results continued to be challenged, we are pleased that we were able to maintain profitability in the quarter by focusing on cost controls and company-store margins. As we look ahead, we believe we have made progress in 2017 and are on the right track to return this system to growth. So far, we have tested national cable television advertising, generating brand awareness in many markets that have never benefited from television. We announced our first strategic refranchising transaction with an experienced operator committed to grow the business. We right-sized SG&A expenses while better focusing resources on our asset-light franchise business. And, just this week, we launched a delivery test with Amazon’s Restaurant Delivery Service, Prime Now. We have a long way to go in an increasingly competitive environment, but believe we are on the right track to ultimately reward all of our franchise owners, employees, and shareholders.”

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.

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