Naugles Inc. on Wednesday reported its first quarterly operating profit in two years, but a company official admitted that most of the earnings came not from the tacos and burritos prepared by Senor Naugles, but from the Kentucky Colonel's fried chicken.
Last month, the Orange-based fast-food chain obtained 111 Kentucky Fried Chicken outlets from Collins Foods International Inc., a Los Angeles-based firm which holds a majority stake in Naugles. The KFC restaurants, Thomas said, accounted for 83% of Naugles' $1.8 million in operating earnings for its first fiscal quarter ended Oct. 23.
However, because of a $2.3-million write-down, incurred by the early retirement of $30 million in bond debt, Naugles reported a net loss of $547,000. That loss contrasts with net earnings of $40,000 a year earlier. The prior year's figures have been restated to include the impact of the Kentucky Fried Chicken franchises.
Revenues fell 5% to $56 million from $59 million a year earlier. The drop was due to the closing of 45 Naugles restaurants during the year-to-year period, said Chris Thomas, vice president of finance. Naugles currently operates 171 outlets in four states.