Deferred tax gain helps boost Volunteer Capital's 4th Q 239%

Nation's Restaurant News, April 11, 1994

NASHVILLE, Tenn. -- Volunteer Capital Corp., a large Wendy's franchisee, said net income in the fourth quarter increased 239 percent, to $2.7 million, on a 5-percent rise in revenues, to $15 million, in the period ended Jan. 5.

Net income in the quarter included a $1.5 million credit to the deferred income tax provision associated with recognizing a portion of the company's deferred tax assets for financial reporting purposes -- an adoption of a new federally required accounting practice.

For the year Volunteer's annual net more than doubled, up 108 percent, to $4.3 million, on a 20-percent rise in revenues, to $60.6 million.

"Operating profits from restaurant operations for 1993 improved by 55 percent and reached its highest level in four years," said Lonnie J. Stout, the company's chairman, president and chief executive officer, in a statement. "Our Wendy's restaurants continued to post an impressive performance with solid overall gains in same-store sales and operating income.

"Our J. Alexander's units [a proprietary start-up concept] experienced exceptional growth in sales and operating income and, as expected, made a positive contribution to our profitability for the year."

Stout said same-store sales for the year were up 5.3 percent, to $973,000, at Wendy's. Same-store sales for the one J. Alexander's that was open more than two years were up 15 percent. In total the company operates six J. Alexander's and 52 Wendy's.

It plans to open its seventh J. Alexander's, a casual-theme dinner house, in the spring in Fourt Lauderdale, Fla.