Meritage Hospitality Group Inc (OTC:MHGU)

Meritage Hosp Group (OOTC:MHGU) ($18.5; $120.5M market cap), announced preliminary 2023 results and provided 2024 guidance:

• Q4 sales of $167.9 million vs $159.4 million in the prior year
• Q4 EPS of $0.16 vs a loss of $0.07 in the prior year
• Full year sales of $672.5 million vs $626.0 million in the prior year
• Full year EPS of $0.62 vs $0.94 in the prior year

“Looking ahead, the Company is forecasting strong earnings growth for fiscal 2024, driven by operating margin improvements as commodity and labor inflation continues to ease. Our new Wendy’s buildings include modernized technology and delivery options designed to improve the customer experience and employee efficiency. We have a strong development pipeline of locations for modernization and new store openings planned throughout the year.”

2024 Full-Year Outlook: Accelerating Earnings Growth:

• Sales growth of +5% to +10%
• Earnings from Operations growth of +65% to +75%
• Net Earnings growth of +145% to +155%
• EBITDA growth of +30% to +40%
• Common stock dividend growth of +40% to +50%

Keep in mind that the company has had trouble meeting its initial annual guidance for the past few years. 

Meritage Hosp Group (OOTC:MHGU), a restaurant operator, reported Q1 2022 results:

• Sales of $145.1 million vs $133.8 million in the prior year

• Net earnings of $2.2 million vs $6.3 million in the prior year (no 10-Q filed yet to check gains/losses)

• EPS of $0.22 vs $0.67 in the prior year

“The Company anticipated a slower start to 2022 as a result of the dynamic inflation experienced in the second half of 2021. Additionally, the Omicron breakout in January 2022 significantly impacted staffing and food costs, but earnings have since stabilized. We expect margins to continue improving throughout the remainder of the year and are thankful for our management teams who continue to successfully navigate the evolving market. Our outlook remains positive as we move forward with new restaurant development, including the Company’s first Taco John’s restaurants scheduled to open later this year,”

Meritage Hosp Group (OOTC:MHGU) ($20.25; $136.0M market cap), a restaurant operator, reported preliminary Q4 and full year 2021 results:

• Q4 Sales of $148.5 million vs $140.0 million in the prior year
• Net earnings of $3.0 million vs $8.8 million in the prior year
• EPS of $0.30 vs $0.91 in the prior year
• Full year sales of 577.1 million vs $516.2 million
• Net earnings of $18.2 million vs $15.8 million 
• Full year EPS of $1.81 vs $1.58 

“Looking ahead for 2022, we anticipate slow earnings start to the year given the Omicron outbreak impacting staffing and food costs. Predictions indicate this will be followed by sequential improvements and easing of pandemic related cost pressures in the second half of the year. We have started to see the restaurant staffing environment improve. We anticipate a record number of new restaurant development projects in 2022, with the Company’s first Taco John’s restaurants scheduled to open later this year. We are very optimistic about where we are headed over the next couple of years,”

2022 Full-Year Outlook:

“With sales growth predicted between 10% and 15% and the easing of pandemic related cost pressures in the second half of the year, the outlook ahead is significantly more positive.”

Meritage Hosp Group (OOTC:MHGU) ($20.62; $139.9M market cap), a restaurant operator, announced an agreement with Taco John’s restaurants to build 50 new restaurants by 2026. MHGU estimates it wil invest ~$100 million in the initial 50 store development agreement through a combination of cash on hand and credit facilities. 

In related news, yesterday MHGU announced a special cash dividend of $0.08. 

“Today’s dividend of $0.08 compares to $0.00 for the same period last year, as last year we were dealing with many COVID-19 unknowns. Our targeted full-year common share dividend of $0.32 ($0.08 per quarter) compares to $0.14 last year and is consistent with our long-standing shareholder goal to provide dividend growth commensurate with earnings growth,” stated Robert Schermer, Jr., CEO.

Meritage Hosp Group (OOTC:MHGU) ($21.00; $140.1M market cap), a restaurant operator announced Q2 2021 results:

• Sales of $147.3 million vs $121.7 million in the prior year
• EPS of $0.86 vs $0.66 in the prior year

“Our earnings growth was driven by strong same restaurant sales, restaurant renovations, new store openings as well as real estate sales and development. Company restaurant management teams have done a commendable job of managing operations in a tight labor market as U.S. consumers return to pre-covid activity levels. We have re-opened all of our Wendy’s dining rooms in 16 states, along with six of our independent brand restaurants located in Michigan. Looking ahead, our operating and development outlook remains very strong as we plan to complete 33 renovations and open 15 new Wendy’s locations this year. We have set the stage for future growth, as we build toward our goal of 400 Wendy’s and 600 total restaurants in operation by 2025,” 

We are still waiting for the company to release its 10Q to learn more about the quarter.

Maintained full year 2021 outlook:

• Sales growth of +10% to 15%
• Earnings from Operations growth of +20% to 30%
• Net Earnings growth of +20% to 30%
• EBITDA growth of +15% to 20%
• Dividend growth +100% to 125%

Meritage Hosp Group (OOTC:MHGU) ($18.75; $120.9M market cap), a restaurant operator announced preliminary full year 2020 results and 2021 outlook:

• Sales of 516.2 million vs $467.5 million in the prior year
• Net earnings of $15.8 million vs $12.9 million in the prior year
• Company provided EPS of $1.55 vs $1.34 in the prior year
• Q4 sales of $140.0 million vs $121.2 million in the prior year
• Q4 net income of $8.8 million vs $2.4 million in the prior year
• EPS of $0.91 vs $0.25 in the prior year

“We achieved record financial results during an unprecedented and challenging year. This was quite an accomplishment given the negative impact from COVID-19 in the first quarter, resulting from mandated closures associated with the pandemic. Our restaurant operating teams and real estate development group finished the balance of the year strong, supported by a resilient Wendy’s brand. As we continue to build on our sales momentum with double digit growth during the first quarter of 2021, we are focused on executing our critical priorities including employee and customer safety while delivering speed, convenience and affordable quality food,” stated Meritage CEO, Robert E. Schermer, Jr.

Full year 2021 outlook:

• Sales growth of +10% to 15%
• Earnings from Operations growth of +20% to 30%
• Net Earnings growth of +20% to 30%
• EBITDA growth of +15% to 20%
• Dividend growth +100% to 125%

Meritage Hosp Group (OOTC:MHGU) ($16.75; $106.1M market cap), a restaurant operator, announced the acquisition of 5 Wedny’s restaurants in West Texas. 

“The acquisition of the five Odessa/Midland area restaurants is consistent with our previously announced 5-year growth plans to expand our operating base to 400 Wendy’s restaurants. We intend to immediately integrate each of the acquired restaurants into our operating and accounting platforms and fold them into our Wendy’s remodeling program that is designed to modernize the restaurants and enhance the overall guest experience,” stated Chief Executive Officer, Robert Schermer, Jr. The Company expects the five additional restaurants to add approximately $9.1 million in annual sales and be accretive to earnings going forward.”

The company maintained its previously announced 2019 full year financial targets. 

Meritage Hosp Group (OOTC:MHGU) ($17.2; $116.4M market cap), a restaurant operator, announced the launch of its own newly created breakfast concept “Morning Belle.”  The first location will open September 25, 2019 in Grand Rapids, MI. The Company has developed a solid pipeline for new locations and plans to open 35 Morning Belle restaurants by the end of 2025. 

“We see great opportunity to leverage efficiencies across the Meritage operating platform including real estate development, human resources, information systems and accounting. The Company plans to invest approximately $70.0 million in the development of the initial 35 Morning Belle restaurants through its related internal cash generation, credit facilities and affiliated real estate entities,” added Rose.

GB Meritage Hosp Group (OOTC:MHGU) ($17.26; $107.3M market cap), a restaurant operator, announced Q2 2018 results:

• Sales of $116.9 million vs $78.7 million in the prior year

• EPS of $0.57 vs $0.39 in the prior year (for q2 2018 using 9.7 fully diluted shares as of Dec. 31, 2017)

Quotes from management:

“We experienced strong sales and earnings growth in the second quarter through the successful integration of 56 newly-acquired Wendy’s restaurants. The Company is forecasting continued strong earnings growth for the balance of the year, with contributions from newly built, renovated and acquired restaurants. We continue to focus on people development and customer satisfaction in our efforts to deliver long-term profitable growth,” stated Robert Schermer, Jr., the Company’s CEO.

Full year 2018 Outlook:

• Sales growth of +40% to 50%

• Incomes from Operations growth of +55% to 65%

• New Earnings growth of +45% to 55%

• EBITDA growth of +40% to 50%

• Common stock dividend growth of +50% to 100%

GB Meritage Hospitality Grp (OTCQX:MHGU) ($20.99; $127.9M market cap), a restaurant operator, announced the acquisition of 5 Wendy’s restaurants located in the Texas market area.

“The Company also reported it has two pending definitive agreements to acquire an additional 50 Wendy’s restaurants located in the Eastern and Mid-Western United States. The pending transactions are subject to customary due diligence and standard approvals, with the remaining acquisitions targeted to be completed during the first quarter of 2018.”

“The acquisition of the five Texas Wendy’s restaurants is consistent with our previously announced 5-year growth plans to expand our operating base up to 420 restaurants. We intend to immediately integrate each of the acquired restaurants into our customized predictive operating and financial suite, followed by an extensive remodeling program designed to modernize the Wendy’s restaurants and enhance the overall guest experience,” stated Chief Executive Officer, Robert Schermer, Jr. The Company expects the combined 55 restaurants to add approximately $100 million in annual sales and be accretive to earnings going forward.

GB Meritage Hospitality Grp (OTCQX:MHGU) ($20.00; mc $121.8m), a restaurant operator, announced a 50% dividend increase.  Management continues to be consistent with its bullish commentary:

“In the third quarter we delivered strong sales and profit growth from our restaurant operations with sales increasing 40.3% and EBITDA increasing 60.2%. The $0.03 common stock dividend declared is a 50% increase over the fourth quarter last year and represents a 43% dividend increase for the full-year, consistent with our stated philosophy to reward shareholders commensurate with earnings growth. The Company recently increased its 2017 full-year earnings outlook and believes the momentum will continue to build in 2018. Newly developed and reimaged Wendy’s restaurants continued to provide a meaningful same restaurant sales catalyst, along with the integration of acquired restaurants contributing to overall growth,” stated Meritage CEO, Robert Schermer, Jr.

Looking ahead to 2018, the Company has a robust pipeline of new development sites, renovations and acquisition opportunities under consideration. The Five Year Plan includes expanding the business to 420 restaurants by 2021, best in class results through a performance based culture committed to operational excellence, strategic acquisitions and real estate development.”

First Quarter 2017 Reuslts

• Q1 sales of $62.0 million vs $54.1 million in the prior year
• Net income of $1.9 million vs $0.54 million in the prior year

Quotes from management:

“The first quarter earnings results were robust, driven by our restaurant operations focus on guest satisfaction and controllable costs. Customers continue to reward us for reimaged Wendy’s restaurants. The reimaged restaurants continue to produce record restaurant-level sales for Meritage in both newly constructed and renovated locations. The Company plans to accelerate its Wendy’s reimaging campaign in 2017 with 30 restaurants under development and 57 additional restaurants to be acquired. We believe these investments will provide a multi-year catalyst for earnings growth, as the brand transformation journey continues,” stated Robert E. Schermer, Jr. the Company’s CEO.

The Company’s 2017 financial targets will be updated following the 57 restaurant acquisition to reflect the impact of a combined 69 restaurants acquired during the first half of 2017, which is anticipated to be accretive to earnings and accelerate the five-year growth plan.

MHGU ($12.99) announced the acquisition of 8 Wendy’s restaurants.  We believe this is part of the previously announced 69 store Wendy’s acquisition the company announced in February.  This may be the closing of the first tranche of restaurants, we will look into this matter further.  The company reiterated that it plans to update guidance with its second quarter earnings release but anticipates that the acquisitions will be accretive to earnings and add approximately $90 million in annual sales.

MHGU ($10.90)announced a new $97 million credit facility for future Wendy’s acquisitions and development.   Quotes from management:

“This new credit facility will save the Company approximately $1.0 million annually in interest expense and significantly increase our renovation and new build restaurant development capacity with an increased flexible development line of credit.

The $1.0 million in annual interest expense savings could lead to approximately $0.13 in EPS accretion based off the fully diluted share count of ~7 million.

Q3 2016 Results

• Sales of $61.7 million vs $53.3 million in the prior year
• Net earnings of $2.0 million vs $1.5 million in prior year 

Quotes from management:

The Company released its business plan for 2017-2021 which, it believes, will result in significant sales and earnings growth over the next five-years. Management is preparing for a major capital investment and earnings cycle driven by Wendy’s acquisitions, renovations and new restaurant development. The Company continues to seek Wendy’s franchise opportunities where it can add value using its operating acumen, systems and restaurant development expertise.

MHGU ($10.87) - Yesterday via premium tweet we stated MHGU reported second quarter 2016results: (results released during the trading day yesterday)

• Sales of $58.6 million vs $51.0 million in the prior year

• EPS of $0.28 vs $0.13 in the prior year

Quotes from management:

“Our restaurant teams delivered a very solid performance for the quarter and first half of the year, staying focused on customer service and systems integration. Our earnings from operations were notably stronger in the quarter. The Company continues to invest substantial resources in Wendy’s restaurant brand initiatives, including restaurant re-imaging and opening new restaurants in acquired market areas. Same store sales in newly re-imaged Wendy’s restaurants continue to outperform expectations, as customers reward us for the improved experience. We are forecasting a continued acceleration in sales and earnings growth for the second half of the year and fiscal 2017, driven by the integration of newly opened, renovated and acquired restaurants,” stated Meritage CEO, Robert E. Schermer, Jr.

GRAND RAPIDS, Mich., June 08, 2016 (GLOBE NEWSWIRE) -- Meritage Hospitality Group Inc. (OTCQX:MHGU), one of the nation’s premier restaurant operators, today announced it has completed the acquisition of 8 Wendy’s restaurants located in the Oklahoma City designated market area. The Company also reported it has signed a definitive agreement to acquire an additional 10 Wendy’s in the Oklahoma City designated market area, with the transaction closing planned for late summer.

Chief Executive Officer Robert Schermer, Jr., stated, “We are very excited about the opportunity to expand our footprint west of the Mississippi river with a portfolio of Wendy’s restaurants which have a long operating history and a market area with new restaurant growth opportunity.  This transaction represents our fifteenth acquisition in the past five years and is consistent with our past acquisition underwriting criteria. We intend to immediately begin the integration of these 8 Wendy’s restaurants into our web-based operating & accounting systems platform with 10 additional Wendy’s to follow later this summer.” 

The Company expects the 8 restaurant acquisition to add approximately $11.5 million in annual sales and be accretive to earnings. The transaction was funded with a combination of cash-on-hand and debt financing provided by Mercantile Bank.

The Company continues to make significant restaurant investments in 2016 with the renovation of 18 existing Wendy’s locations utilizing the new image activation design standards and developing new casual dining restaurants.  The Company also reported that it has withdrawn from a previous purchase agreement to acquire 19 casual dining restaurants and continues to seek Wendy’s and casual dining acquisition opportunities where the Company believes it can add value using its web-based operating and accounting systems.

GRAND RAPIDS, Mich., Feb. 22, 2016 (GLOBE NEWSWIRE) -- Meritage Hospitality Group Inc. (OTCQX:MHGU), one of the nation’s premier restaurant operators, today announced it has entered into a definitive asset purchase agreement to acquire a portfolio of 19 casual and polished-casual dining restaurants located in the Midwest and Mid-Atlantic states.

The transaction is subject to customary due diligence including debt and equity financing arrangements. The closing is anticipated to occur in summer 2016.  

Chief Executive Officer Robert Schermer, Jr., stated, “We are very excited about the opportunity to expand our growing and profitable casual dining segment with a unique portfolio of high quality brands which have a long operating history and strong operating culture.  This transaction will represent our fifteenth acquisition in the past five years and is consistent with our past financial underwriting criteria. Post-closing we intend to integrate the restaurants into our unique internet-based operating & accounting systems platform.” 

Company 2016 Outlook: Continued Sales & Earnings Growth

The Company’s 2016 operating targets will be updated near the end of the second quarter to reflect the acquisition, which we anticipate will be accretive to sales and earnings growth.

The Company is planning to accelerate restaurant capital investments in 2016 including new casual dining restaurants and the renovation of 18 existing Wendy’s locations utilizing the new image activation design standards.

MHGU ($10.59) reported preliminary 2015 results and 2016 outlook:

• Q4 2015 sales of $59.2 vs $43.9 in the prior year period

• Q4 net income of $2.3 million vs $0.56 million in the prior year

• EPS of $0.31 vs $0.07

2016 growth outlook:

• Sales growth of 5% to 10%

• Earnings from Operations growth of 10% to 15%

• EBITDA growth of 5% to 10%

Quotes from management:

Chief Executive Officer Robert Schermer, Jr., stated, “Our results for the year achieved many of our operational goals, including a strong contribution from newly built and acquired restaurants, culminating with record earnings in the fourth quarter. During the year, we experienced a number of positive factors including lower food costs, high same store sales growth and several beneficial real estate transactions. Our proprietary casual dining brands continued to grow with earnings increasing 26% for the year.

2015 represented our fifth consecutive year of sales and restaurant growth, which exceeded our original five-year plan submitted to shareholders.  We accomplished these results through financial discipline, our unique operating & accounting platform and a service culture in our restaurants,” added Mr. Schermer.

GRAND RAPIDS, Mich., Nov. 11, 2015 (GLOBE NEWSWIRE) -- Meritage Hospitality Group, Inc. (OTCQX:MHGU), one of the nation’s premier restaurant operators, today announced that the Company’s Board of Directors approved a special dividend of $.03 per share at the November 10, 2015 Board of Directors meeting.  The dividend is payable on December 8, 2015, to shareholders of record on November 26, 2015.

“The dividend represents a 100% increase over last year’s special dividend from the same period and is consistent with our stated philosophy to reward shareholders with cash dividend growth commensurate with the Company’s earnings growth,” stated Meritage CEO, Robert Schermer, Jr.

The Company successfully completed its five year growth targets, which resulted in significant sales and earnings growth through acquisitions, new restaurant development and renovations. The Meritage Wendy’s restaurant renovations continue to produce strong sales increases and enhance the overall guest experience. The Company casual restaurants earnings have continued to grow and we have new locations planned for opening in 2016 and beyond.

Company Updated Full Year 2015 Outlook       

• Sales growth of 25% to 30%
• EBITDA growth of 85% to 90%
• Net Earnings growth of 110% to 115%
• Dividend growth of 100%

Second Quarter 2015 Results

• Q2 2015 sales of $51.0 million vs $40.5 million in the prior year period

• Q2 2015 net earnings of $2.2 million vs $1.2 million

• Q2 2015 EPS of $0.29 vs $0.16

“Our restaurant operating teams delivered a strong financial performance for the quarter and first half of the year, staying focused on customers, costs and systems integration in newly acquired or newly constructed restaurants. The Company continues to invest substantial resources in the Wendy’s restaurant brand initiatives, including the restaurant re-imaging program termed “image activation”, as well as developing new restaurant locations and acquisitions. Our newly renovated Wendy’s restaurants are generating compelling double digit same-store-sales increases along with high customer satisfaction. The system goal is to have 60% of the restaurants image activated by the end of 2020, and we are currently on schedule for 10% of our restaurants to be image activated by year end,” stated Meritage CEO, Robert E. Schermer, Jr. 

“Additionally, the Company is developing a multi-year project pipeline for expansion in its uniquely branded chef-casual restaurants, which we believe will continue to enhance operating margins,” added Mr. Schermer. 

The Company is currently performing ahead of its 2015 earnings guidance listed below:

• Sales growth of 25% to 30%
• EBITDA growth of 60% to 65%
• Net Earnings growth of 100%
• Special dividend growth of 100%

First Quarter 2015 Results

• Sales increased 32.1% to a record $46.5 million from $35.2 million for the same period last year.
• Earnings from Operations increased 132.6% to $1.8 million compared to $766,000 for the same period last year.

The significant growth in sales and earnings was generated by a number of positive factors, beginning with 32 newly built or acquired restaurants coming on-line using our back-of-house operating and accounting systems. Our managers in both the Wendy's and casual restaurant segments did a great job managing food and labor costs during the first quarter" stated Robert E. Schermer, Jr. the Company's CEO.

The new Wendy's standard design termed "image activation" continues to produce record restaurant-level sales increases for the Company in both new and renovated restaurants. Meritage is planning to complete 14 image activated restaurants by the end of 2015. We believe the new image activation Wendy's restaurants will provide a multi-year catalyst for sales and earnings growth as the brand transformation journey continues.

Meritage has distinguished itself as a performance leader and innovator in the quick service and casual restaurant segments, achieving best in class results through strategic acquisitions, development & design innovation, and people committed to operational excellence. The leadership in our restaurants and throughout our company is not only providing strong performance in the short term, but is developing the leaders we will need to accommodate our growth well into the future. We believe these pillars of our growth strategy will continue to yield double-digit growth rates and shareholder returns" added Mr. Schermer.

The Company reiterated its 2015 Outlook: Robust Growth

This included the following year over year financial expectations:

• Sales growth of 25% to 30%
• EBITDA growth (a non-GAAP measure) of 60% to 65%
• Net Income growth of 95% to 100%

Second Quarter 2014 Results

• Sales increased 15.4% to $40.5 million from $35.1 million for the same period last year.
• EPS of $0.22 vs $0.20 in the prior year

"We are pleased with our operating results for the quarter and the performance of our renovated and newly constructed Wendy's restaurants. The Company has allocated substantial resources toward Wendy's restaurant growth initiatives, including the restaurant re-imaging program termed 'Image Activation,' as well as construction in new retail trade areas.

"Our proprietary casual dining restaurants continued to perform well in the second quarter with net earnings growth of 560% over the same period last year. We have an exciting project pipeline for both Wendy's and our casual dining restaurants in 2015 and 2016, which we believe will accelerate our sales, EBITDA and earnings growth rates going forward," stated Meritage CEO, Robert E. Schermer, Jr.

Third Quarter 2013 Results

• Sales increased 43.4% to $35.8 million compared to $25.0 million for the same period last year.
• Net Income was $303,000 compared to $845,000 for the same period last year -- which included non-recurring tax benefits.

"Company sales exceeded $100 million during the nine months period, a company milestone, but most importantly the quality of our earnings before income taxes has continued to improvement significantly throughout the year," stated Meritage CEO, Robert E. Schermer, Jr. The new Wendy's Pretzel Bacon Cheeseburger and Pretzel Chicken Pub sandwiches have been extremely well received by our customers, driving sales and transactions. Meritage continues to invest substantial resources into the Wendy's brand transformation, including major restaurant property improvements known as "Image Activation."

"We have three Image Activation restaurants under development and remain highly confident that with our demonstrated history of operational excellence and commitment to the Wendy's brand transformation we will continue to drive higher sales and create greater guest satisfaction in our Wendy's restaurant portfolio," added Mr. Schermer.

The Company's proprietary casual dining restaurants which feature unique "made from scratch" recipes using locally sourced ingredients, reported 14% same store sales growth over the nine months period.