No one ever said it was easy to make money in the restaurant business, but Salt Lake City-based JB's Restaurants Inc. seems to have found a winning formula in the family-style niche of the market.
JB's reports a 10 percent increase in net income from $2.4 million in fiscal 1989 to $2.6 million in fiscal 1990. Earnings per share jumped 15 percent from 47 cents in 1989 to 54 cents in 1990, reflecting the company's repurchase last year of 500,000 (10 percent) of its outstanding shares.Revenues for the year grew 5 percent from $109.4 million to $114.8 million, a company record and an increase that Chairman Clark D. Jones and President Fred P. Gonzales, in their message to shareholders in the company's annual report, attribute to the addition of new restaurants while maintaining sales in existing units.
JB's opened 15 new restaurants in 1990, five more than were planned for the year - the result of an acquisition of six former Plush Pippin restaurants in Oregon and Washington, a move that the two executives said doubled the company's market penetration in the Pacific Northwest.
At the end of fiscal 1990, JB's operated 131 restaurants and one franchised unit in Bozeman, Mont., that was opened in 1990, the first JB's franchise.
Jones and Gonzales said the company will continue expansion of the JB's Restaurant concept by adding new company-operated stores, by franchising and by increasing revenues at existing stores. He said development plans over the next three years include 10 percent growth in new units, mostly in existing JB's markets.
They also expect existing unit revenues to increase as facilities are remodeled and the company continues to reposition itself in the "upper end" of the family restaurant segment.
"We believe our strategy of combining the JB's food bar with signature products and exceptional service provides the company with an unassailable niche position in our market," said Jones and Gonzales.
They said they are targeting a 20 percent average annual growth rate in earnings per share for the 1990s by strengthening JB's' position in the family restaurant segment while concentrating on expansion in markets where it is already established.
Shortly after the end of the company's fiscal year last September, JB's entered into an agreement with Sbarro Inc. to acquire two operating Sbarro restaurants in Phoenix. It also acquired three-year exclusive Sbarro development rights to Phoenix and Portland, Ore. Jones and Gonzales said they plan to open a minimum of 19 additional Sbarro restaurants in those cities as well as units in contiguous markets "when and where appropriate."
They said the Sbarro concept, which "fills a unique niche in the growing Italian segment," is one of the most profitable and consistent performers in the restaurant industry.
Sbarro's features Italian entrees served in a fast-food format, primarily in regional malls, and does not compete directly with JB's.