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Frisch's Restaurants, Inc. Comm Message Board

  • swampgator1 swampgator1 Jul 18, 2003 5:59 PM Flag

    Algo - I am in

    Made $1.95, I think there is the one time tax deal (I think one time), that takes normalized EPS down to $1.89.

    Three forces going forward -

    1. Golden C is getting more profitable as certain fixed costs (marketing in an area) get spread over more units just learning curve with the concept. Along the same vain, as chain matures, opening costs dividend by chain revenues continue to fall meaning more profit to the bottom line.

    2. Retail sales pick up over next year, especially for the FRS types. They had April and part of March I believe in the last quarter and still great numbers. War is over, tax cuts are coming and people are driving the interstates for vacations. VEry good for business. I expect more SSS gains.

    3. BAd trend - rising food and natural gas costs will probably whack 5 to 10 cents off earnings.

    Net: Sales growth adds 19 cents, reduced openging cost as % of sales rises EPS by 2 cents, food costs take it down 8 cens and what do you get: 1.89 (normalized) + 19 - 9 + 2 = $2.01 EPS next year.

    So, at 11 x forward earnings this looks much more appetizing than Wendy's - 14.5 x forward and nice Value to EBITDA ratio. Also relative to the universe of stocks, nice momentum, earnings surprise and price to book numbers.

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