Claremont, NC - Fresh Foods, Inc. announced that it expects to report earnings of 19 to 23 cents per share for its third quarter ended Dec. 6, 1998, as compared to 23 cents per share (before non recurring expenses) for the second quarter of its current fiscal year and 19 cents per share for its year-earlier third quarter.
This estimate is preliminary and subject to adjustment until final results are disclosed in the company's next 10-Q report. Financial analysts had been expecting the company to earn between 46 and 53 cents per share in this year's third quarter.
David R. Clark, the company's president, stated that third quarter earnings had been impacted by the company's failure to realize expected benefits from restaurant conversions, together with slower than expected growth in the sale of restaurant branded products. Elaborating, Clark said, “Although the results we now expect to achieve in the third quarter fall short of what we hoped for, we remain confident in our restaurant conversion strategy and the long-term viability of selling restaurant branded products in the foodservice and home meal replacement markets.”
These factors are expected to influence the company's performance in future periods, as well. According to Clark, “Our best estimate today is that fourth quarter earnings should be consistent with third quarter earnings.”
EBITDA is expected to total $8.7 million to $9.1 million for Fresh Foods' third quarter ended Dec. 6, 1998, as compared to $8.7 million (before non- recurring expenses) for the second quarter. The company's most restrictive financial covenants require it to maintain a funded debt to EBITDA ratio of not more than 5.75 to 1.0 and a fixed charge coverage ratio of not less than 1.0 to 1.0. The company has not experienced any difficulty in satisfying these covenants and does not currently envision any problem in that regard.
Fresh Foods, Inc. is the parent company of several wholly owned subsidiaries, principally Pierre Foods, LLC, which operates food processing facilities in Cincinnati, Ohio and Claremont, NC, and Claremont Restaurant Group, LLC, which is responsible for the company's restaurant activities.
The company's food products include numerous fully cooked meat products as well as packaged microwaveable sandwiches for the foodservice, vending, convenience store and other home meal replacement markets. Fresh Foods sells its high-quality, value-added products under the Pierre(tm), Fast Choice(r) and Mom 'n' Pop's(r) brand names, which are widely recognized in the food industry. It also sells a variety of sandwiches under several national restaurant brands.
Fresh Foods owns and operates 48 Sagebrush(r) restaurants. In addition, the company owns and operates thirteen Western Steer(r) and five Prime Sirloin(r) locations and one Bennett's(tm) restaurant. A total of 37 franchised locations operate under the Western Steer, Prime Sirloin and Bennett's concepts.
Meat Industry Insights News Service
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