Loading...
Loading...
Bob Evans Farms, Inc.
("Bob Evans") today announced it had entered into a definitive agreement
for the sale of its Mimi's Cafe restaurant chain to LeDuff America, Inc.
("LDA") .
The purchase price for the transaction is $50.0 million, consisting of $20.0
million in cash and a note for $30.0 million, subject to customary purchase
price allocations and adjustments as of closing. The transaction is subject
to customary closing conditions and is expected to be completed within the
next 45 days.
The Company also said it expects to provide certain transitional support
services on a contractual basis to Mimi's Cafe during a period following the
close of the transaction. LDA intends to continue operating and managing the
company out of its current Irvine, California office.
Bob Evans Comments on Outlook for Third Quarter of Fiscal 2013
Bob Evans also said today that revenue for the third quarter of fiscal 2013
will exceed last year's third quarter driven by positive sales growth in both
the Bob Evans Restaurants and Bob Evans Foods segments. The third quarter of
fiscal 2013 will be the last period for which Mimi's Cafe is included within
the Company's non-GAAP consolidated results. During the quarter, the Company
also announced early payment of its private placement notes, and the
conversions of its restaurant operating companies to a LLC structure. Among
the benefits expected from the payment of the notes is reduced interest
expense on a go-forward basis. The conversions of the restaurant operating
companies to a LLC structure are expected to generate a cash tax benefit of
$53 to $63 million to be realized over the next few years. The cash tax
benefit arises from a write-down of the tax basis of the Company's investment
in Mimi's Cafe. The cash tax benefits are not expected to permanently change
the Company's tax rate.
The Company's non-GAAP earnings for the quarter will be negatively impacted by
several non-continuing factors affecting each of our segments, and the timing
of marketing expenses within the Bob Evans Foods segment. The non-continuing
factors include: a decline in performance at Mimi's Cafe due, in part, to
reduced operational focus resulting from the announcement of the strategic
review process; a weather related impact on guest traffic, sales, labor and
direct operating expenses at Bob Evans Restaurants during the month of
December; and one-time costs associated with in-sourcing production of a key
refrigerated side dish product line at Bob Evans Foods. Furthermore, the
Company made a strategic decision to shift Bob Evans Foods' marketing spending
from the first and second fiscal quarters to the third quarter to better align
those expenditures with demand during the key holiday period. Reflecting
primarily the aforementioned factors, the Company expects to report non-GAAP
earnings of between $0.51 to $0.57 per share for the third quarter ending
January 25, 2013. Last year's third quarter results included the benefit of a
state income tax settlement equating to $0.05 per diluted share. Further
details regarding third quarter performance and a revised outlook for the
fourth quarter of fiscal 2013 incorporating the impact of this event,
including the transitional support service agreement with the buyer that is
not likely to fully offset the costs associated with delivering those
services, will be addressed within the Company's earnings release for the
third quarter of fiscal 2013 to be issued after 4 p.m. (ET) on February 19,
2013.
Loading...
Loading...
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in