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A leading casual dining restaurant company who owns and operates three restaurant concepts which operate under the O'Charley's, Ninety Nine Restaurants and Stoney River Legendary Steaks trade names.
The new product offerings and new marketing & analytical approach are driving the revenues up, as is evident by 6% increase in $989.5 mn for the fiscal 2006. The company owns and operates full-service restaurant facilities under the brand names of O’Charley’s, Ninety Nine Restaurant and Pub and Stoney River Legendary Steaks. Revenues reflect an overall increase in restaurant sales, commissary sales and franchise revenues. Net income increased by whopping 57% to $18.9 mn, which also reflects a decrease in assets impairment & disposals and lower pre-opening costs.Meritage Hospitality Group Inc., the franchisor of the company's Michigan business segment, has settled the lawsuit filed last year against O'Charley's Inc. Under terms of the agreement Meritage will continue operating its O'Charley's restaurants in Michigan and will also continue to evaluate expansion of the brand at new locations that have solid demographic profiles and population growth. This is expected to help the company expand in new areas and in turn lead to a revenue growth.The company has completed 11 “Project RevO’lution” re-brandings at O’Charley’s and 13 similar overhauls at Ninety-Nine, introducing new elements at both concepts such as different uniforms, plateware, menu designs, Curbside To Go Service, kitchen display systems, and enhanced service standards. These initiatives are expected to be favorable for the company as a longer-term brand building strategy for the two chains. These efforts have created a level of excitement at both brands and the initial sales results are justifying the same. Backing on this the company is expecting to complete 20-30 re-brandings at O’Charley’s and a similar number at Ninety-Nine in 2007.O'Charley's is a leader in food quality in the casual-dining segment and it’s re-branding and renovation efforts are expected to help the company maintain its position in the market. With the margins in the restaurant industry growing it is expected that O'Charley's will cash on the opportunity and grow its margins which will reflect in its share price.
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