TO OUR STOCKHOLDERS
SALES AND EARNINGS
REACH NEW PEAKS
Sales of $74.6 million from Hot
Shoppes' broadly diversified public
feeding and motor hotel operations
were up $3 million from last year.
Your Company thus enjoys the
unique record of increasing its sales
in every year of its 36-year history,
with the last five years alone producing an 83% increase in volume.
After-tax earnings of $2.4 million also evidence the stability and
growth that Hot Shoppes' broad participation in basic consumer areas
has provided over the years. 1963
per share earnings are $1.18 or 7%
above the $1.10 earned last year.
We feel that this is a good profit
performance. Our 1963 operations
absorbed heavy expansion expenses
and were adversely influenced by
the Eastern Air Lines' strike, and
the unusually cold winter.
A 4% stock dividend totaling
77,501 shares was distributed to our
6,150 shareholders in June, 1963.
The market value of these shares
totaled $1.9 million.
EXPANSION IN 1963
Each of our divisions was expanded in fiscal 1963 in our continuing effort to provide quality food,
good service, and beautiful surroundings to American families and
businessmen at reasonable prices.
The Airline Catering Division
opened the country's largest and
most modern jet flight kitchen at
Washington's new Dulles International Airport. This new facility
has a capacity of 10,000 in-flight
meals per day, and provides a basic
particpiation for your Company in
the growth of national and international air transportation serving
the Nation's Capital.
New service restaurants were
opened in North Miami Beach,
Florida, South Miami, Florida,
Capital Plaza Shopping Center near
Washington, D. C, and a beautiful
Top O' The Mall dining room in
Salt Lake City's Cottonwood Mall
Shopping Center. The Hot Shoppe
on Florida Avenue in Washington,
D. C. was- also reopened after extensive remodeling.
A new public cafeteria was opened
at Salt Lake City in the Cottonwood
Mall Shopping Center, and several
additional units are planned in this
division for fiscal 1964.
The Motor Hotel Division has
opened a 184-room addition to the
Dallas Marriott Motor Hotel, making it now the "world's largest" facility of its kind with almost 500
guest rooms. The addition features
bi-level luxury suites, a second patio
and pool area, and a ballroom seating 1,000 persons for dinner or
1,500 for meetings.
The convention facilities of the
Washington, D. C. Twin Bridges
Marriott have also been expanded
with the addition of two more 600-
700-person ballrooms, complete
with exhibition areas and a banquet
kitchen. This 12,000 square foot
addition supplements the new 1,000-
person Persian Room reported last
Your Company was operating 111
units in 12 states and the District
of Columbia at July 28, 1963, and
twenty potential new units are under active development.
PROFIT PLANNING FOR 1964
Our strong year-end financial
position provides a sound basis
for your Company's future profit
Current assets of $16.2 million
provided a 2.3 to 1 current ratio
over current liabilities of $7.1 million, and net working capital totaled
The flow of cash available for
investment from earnings, depreciation, and deferrecT taxes also increased to $5.3 million in 1963 from
$4.9 million last year.
The stockholders' equity increased
by $2.4 million to $18.7 million, and
the 1963 book value of each share
of stock was $9.28 as compared to
$8.10 at the end of fiscal 1962.
These strong financial reserves
coupled with our continued good
earnings record provide your Company with the capability and flexibility to continue successfully its
ambitious but selective expansion
Some significant organizational
steps already have been taken to
further strengthen our management base for growth through the
establishment of six major operating divisions for Service Restaurants, Cafeterias, Motor Hotels,
Airline Catering, Institutional Food
Service, and Manufacturing.
T. Lawson Combs has been named
Vice President, Service Restaurant
Division; Charles C. Baker, Vice