Spicy Pickle Franchising, Inc. Third Quarter Report

December 7, 2011

Spicy Pickle Franchising, Inc. (OTCQB: SPKL.PK) reported revenues for the third quarter ended September 30, 2011 slipped 11% to $1 million.  The net loss for the period improved slightly to $671 thousand or $(0.01) per share compared to a net loss of $802 thousand or $(0.01) per share during the same period in 2010.

For the first nine months of 2011, the company reported revenues fell 16% to $2.8 million.  The net loss for the period increased to $2.6 million or $(0.03) per share versus a net loss of $1.8 million or $(0.02) per share during the same period in 2010.

The decrease in revenues for both periods was the result of the recognition of lower franchise fee revenue and the lack of bakery operations in 2011.  The lower loss during the third quarter was the result of lower general and administrative expenses as well s lower labor costs.  The increase in the loss for the nine month period was primarily the result of higher food costs and marketing expenses.

The balance sheet reflects the continued losses by the company with an accumulated deficit of $19.9 million and a negative shareholders’ equity of $1.72 million.  The company has a heavy debt load for its size with $4.4 million in long-term debt/notes payable and total assets of only $4.3 million.

The company announced in October its intention to expand its Spicy Pickle® brand internationally to Canada and the State of Qatar.  The company already operates BG UrbanSM cafes within Canada.  In addition, the company announced in November that it has signed an agreement with an existing Las Vegas-based franchisee for the development of five additional Spicy Pickle® Sandwich Company locations throughout the Las Vegas area.

Spicy Pickle Franchising, Inc. franchises and operates both Spicy Pickle® Sandwich Company and BG UrbanSM brands.

Source: Spicy Pickle Franchising, Inc.

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