Second Quarter 2009 Highlights

 --  Sales increased 10.8% to $16.4 million from $14.8 million in the     second quarter of 2008. --  Income from operations grew to $789,000 from $81,000 in the second     quarter of 2008. --  Net income increased to $607,000 from $191,000 in the second quarter     of 2008. --  Consolidated EBITDA (a non GAAP measure) increased to $1.2 million     from $916,000. --  The Company completed the acquisition of 20 Wendy's restaurants in     Jacksonville, Florida. --  The Company generated strong operating cash flows during the period     increasing cash on hand to $2.5 million.      

"Meritage experienced significant financial improvements in the second quarter, despite a subdued consumer spending environment. Driven by cost containment, new store growth through acquisition and easing commodity costs, our results are exceeding our 2009 plan," said Meritage CEO, Robert E. Schermer,Jr. Second quarter and six month 2009 results included five weeks of the recent acquisition of 20 Wendy's restaurants in Jacksonville, Florida.

Sales for the six months ended May 31, 2009 were $29.6 million compared to sales of $28.2 million for the same period last year.

Income from operations for the six months ended May 31, 2009 were $660,000 compared to a net loss of $664,000 for the same period last year. Additionally, net earnings improved to $187,000 compared to a net loss of $601,000 for the same period last year, which also included a $684,000 gain from the sale of real estate.

Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the six months was $1.5 million compared to $1.2 million in 2008, an increase of 29.6%.

The Company remains encouraged by the prospects for the Wendy's brand, as the new management team at Wendy's/Arby's Group works on the formation of the supply chain cooperative and restaurant level operating margins of the Wendy's system. Returning Wendy's restaurant margins back to historical 16%-17% margins has profound positive implications on the Company's business model.

Meritage Hospitality Group Inc. specializes in the development and operation of restaurants and leisure properties and currently operates 73 quick-service and casual dining restaurants. The Company is headquartered in Grand Rapids, Michigan and employs a workforce of approximately 2,400. The Company continues to seek unique opportunities to capitalize on its substantial development and operating expertise.

SAFE HARBOR STATEMENT

Certain information in this new release, particularly information regarding future economic performance and finances, and plans, expectations and objectives of management, constitutes forward-looking statements. 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 such results to differ materially from those expressed in forward-looking statements. Please review the Company's Safe Harbor Statement at http://www.meritagehospitality.com.

 CONTACT: Robert E. Schermer, Jr. CEO Meritage Hospitality Group Inc. 616/776-2600  

SOURCE: Meritage Hospitality Group Inc.

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