Papa Murphy’s posts 3Q net loss of $788,000

Papa Murphy’s Holdings Inc., the Vancouver-based parent of Papa Murphy’s take-and-bake pizza chain, said Thursday it posted a third-quarter net loss of $788,000. That compares with a net loss of $395,000 in the same July-to-September period a year ago.

The company said the net loss in the three months ended on Sept. 29 included a $2.1 million after-tax charge. The after-tax charge was related to the company’s refinancing of loans, which it said boosts its financial flexibility while lowering its borrowing costs.

Meanwhile, the company recorded total revenues of $22.16 million in the third quarter, up 15.9 percent from $19.12 million in the year-ago period. Papa Murphy’s also saw an increase of 4.6 percent in domestic comparable store sales. It was the company’s 15th consecutive quarter of comparable store sales growth. Papa Murphy’s opened 16 new stores in the third quarter, including 13 domestic franchise openings.

During the company’s earnings conference call Thursday, Ken Calwell, president and CEO of Papa Murphy’s, said the company experienced strong third-quarter financial results “despite record high cheese prices.”

For the rest of this year, and headed into 2015, Calwell said, the company has several new products in the pipeline, including Gourmet Delites, Thick ‘n’ Cheesy Home Baked Bread and a gluten-free pizza line.

“We are confident that we are building sustainable layers of organic sales growth,” he said.

As it moves to add product offerings, Papa Murphy’s also has expanded the number of stores it owns in Minneapolis, Minn. During the third quarter, the company bought nine stores from a single franchisee in that city for about $3.5 million.

That brings its company-owned store count to 24 in the Minneapolis market. At the end of the third quarter, Papa Murphy’s and its franchisees operated 79 stores in that market.

Founded in 1981, the company went public in May, making its costs and profits public for the first time.

It operates more than 1,400 franchised and company-owned stores in 38 states, Canada and the United Arab Emirates. Most of the company’s stores are operated by franchisees.

The company’s stock, which trades as FRSH on the Nasdaq exchange, closed down 25 cents Thursday, at $8.81 per share.