Meritage announces a common stock dividend for the third quarter and

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GRAND RAPIDS, Michigan, Aug. 08, 2022 (GLOBE NEWSWIRE) — Meritage Hospitality Group Inc. (OTCQX: MHGU), the nation’s leading franchise operator, today announced that the company’s board of directors has approved a special quarterly dividend of $0.12 per share. The dividend is payable on October 1, 2022 to shareholders of record on September 15, 2022.

The Board of Directors also approved the increase in the Company’s authorization to repurchase an additional 1,000,000 common shares, subject to the availability of capital and in accordance with applicable laws and regulations. The Board is authorized to revoke the redemption authorization at any time.

“The company recently announced strong growth in sales and financial results in the second quarter. Company restaurant management teams continue to manage operating costs well in an environment of volatile commodities and high inflation. Operating margins are beginning to move in a more positive direction as we remain focused on managing controllable costs and strategic price increases. The Company has targeted a common share dividend for the year of $0.36, which would represent an increase of 12.5% ​​over last year, which is consistent with our capital allocation strategy to return capital to shareholders,” said Robert Schermer, Jr., CEO.

The company recently announced the start of construction of its first Taco John’s restaurant, located in West Michigan. Along with its development agreement, the company plans to build 50 new Taco John’s restaurants in five states by 2026, with options to develop up to 150 additional restaurants. The development agreement provides the Company with exclusive rights to these five states, as well as significant economic incentives.

“We have the people and resources in a position to begin scaling Taco John’s across multiple states, while leveraging our best technology and accounting platforms. This is an exciting new fast food brand for the company, and we believe it will provide long-term profitable growth for investors as well as many new career opportunities for employees. Meritage is in a unique position as the only publicly traded company associated with the Taco John’s private label, providing investors with a way to participate in Taco John’s national expansion story,” Schermer added.

The company estimates that it will invest approximately $100 million in the initial rollout of the Taco John’s 50 restaurant through a combination of cash and credit facilities.

Annual outlook: 2022

  • Sales growth of +10% to 15%
  • Dividend growth +10% to 15%

Strong future sales growth

Meritage expects strong sales growth in 2023 and 2024, driven by the development of new Wendy’s and Taco John’s restaurants, reimagined restaurants and acquisitions. The Company is committed to implementing its capital allocation strategy of reinvesting in the business to generate profitable growth and return free cash flow to shareholders over time through a combination of dividend growth and share buybacks.

Meritage continues to distinguish itself as a leader and innovator in the quick service restaurant segment through a performance-driven culture focused on operational excellence, strategic acquisitions and real estate development.

About the company

Meritage Hospitality Group is the nation’s largest franchise operator, currently with 350 operating restaurants located in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas and Virginia. Meritage is headquartered in Grand Rapids, Michigan, and has approximately 11,000 employees. At the end of fiscal 2021, the Company had total diluted weighted average shares outstanding of 9,631,000 and fully diluted EPS of $1.81.

The Company’s current, publicly available information pursuant to SEC Rule 15c2-11 and FINRA Rule 6432 can be found at www.otcmarkets.com, under the ticker symbol MHGU/Disclosures or at the website of the company, www.meritagehospitality.com.

SAFETY STATEMENT
Certain information contained in this new press release, in particular information regarding future economic and financial performance, as well as management’s plans, expectations and objectives, constitutes forward-looking statements. The factors set forth in our Safe Harbor Statement, in addition to other possible factors not listed, could affect the Company’s actual results and cause those results to differ materially from those expressed in the forward-looking statements. Please see the company’s Safe Harbor Statement at http://www.meritagehospitality.com.


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