After-tax gain lifts Shoney's 1st-Q net 62%

Nation's Restaurant News, April 11, 1994

NASHVILLE, Tenn. -- A $5.4 million after-tax gain boosted Shoney's first quarter net-income 62 percent over the same time period a year ago, to $19.6 million, in the period ended Feb. 26.

Revenues were up 7 percent, to $339.2 million.

In adopting a new federally recommended accounting change that has an impact on income taxes, Shoney's benefited from a decrease in deferred income tax expenses and a corresponding increase in net income.

The new accounting policy requires companies to adjust deferred tax assets and liabilities to reflect current tax rates rather than those that were in effect when the assets or liabilities were incurred. Excluding the effects of the accounting change, net income would have increased 17 percent, to $14.2 million.

The company reported flat same-store sales averages, up just 1.1 percent, despite a menu price hike of 1.8 percent.

Shoney's ended the quarter with 761 restaurants. The company operates a total of 1,867 restaurants among four different chains: Shoney's, Captain D's, Lee's Famous Recipe Chicken and Pargo's.