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Frisch's Restaurants Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: January 11, 2012 05:44PM
Frisch's Restaurants Inc (FRS) filed Quarterly Report for the period ended 2011-12-13.
Highlight of Business Operations:Other operating costs include occupancy costs such as maintenance, rent, depreciation, property tax, insurance and utilities; plus costs relating to field supervision, accounting and payroll preparation costs, franchise fees for Golden Corral restaurants, new restaurant opening costs and many other restaurant operating expenses. Opening costs can have a significant effect on other operating costs. Opening costs (all for Big Boy no Golden Corral restaurants were opened during any of the periods presented in this MD&A) were $115,000 and $368,000 respectively, during the Second Quarter of Fiscal 2012 and the Second Quarter of Fiscal 2011. For the First Half of Fiscal 2012, opening costs (all for Big Boy) were $398,000. Opening costs were $916,000 (all for Big Boy) in the First Half of Fiscal 2011. As most of the other typical expenses charged to other operating costs tend to be more fixed in nature, the percentages shown in the above table can be greatly affected by changes in same store sales levels. In other words, percentages rise when same store sales decrease and percentages will decrease when same store sales increase. Other operating costs for the Golden Corral segment are a much higher percentage of sales than Big Boy because the physical facility of a Golden Corral restaurant is almost twice as large as a Big Boy restaurant and Golden Corral sales volumes have generally remained well below managements original long-term expectations for the concept.
To arrive at the measure of operating profit, administrative and advertising expense is subtracted from gross profit, while the line item for franchise fees and other revenue is added to it. Gains and losses from the sale of real property (if any) are then respectively added or subtracted. Charges for impairment of assets (if any) are also subtracted from gross profit to arrive at the measure of operating profit.
Stocks Discussed: FRS,