Perkins 1995 earnings fall after writedown on assets

Nation's Restaurant News, April 22, 1996

MEMPHIS, Tenn. -- Perkins Family Restaurants L.P. reported 1995 earnings of $9.80 million, a drop of 18 percent, from previous-year earnings of $12.01 million, after the family restaurant operator took $2.51 million in writeoffs for asset disposition and accounting changes.

Revenue for the year rose 12 percent to $235.96 million from the year-earlier revenue of $209.89 million.

In the fourth quarter ended Dec. 31, 1995, Perkins earned $484,000, a 79-percent fall from $2.33 million in earnings for the comparable year-earlier period. Revenue increased nearly 12 percent, to $61.18 million, from $54.73 million.

In addition to the $1.9 million fourth-quarter writedown on accounting changes dealing with deterioration of long-term assets, the company said its business continued to be affected by "industrywide labor pressures" and increased competition.

Comparable sales at its own restaurants "increased slightly in the fourth quarter and almost 1 percent for the full year," the company said. Interest and depreciation increased as part of the expansion and "aggressive remodeling schedule," according to the company's financial report.

Interest costs for the year were up nearly 48 percent for the year, to $4.83 million, from $3.27 million.

Perkins chairman and chief executive Donald N. Smith said that during the year the company opened 10 new company-owned restaurants, 22 franchised units and its first stand-alone bakery. It also opened a new prototype franchise -- with a limited variety of items -- at the Memphis Airport.

Ten new restaurants currently are under development for 1996. The company owns and operates 138 restaurants and a bakery, and it franchises 322 units.