• Afton signs merger documents with Pizza Delight, reports Q1 results

BURLINGTON, Ontario -- Afton Food Group Ltd. and Pizza Delight Corporation announced on May 31 the signing of its agreement to merge the two Canadian companies.

According to a release, current shareholders of Pizza Delight will become the controlling shareholders of Afton, obtaining approximately 63 percent of Afton's fully diluted shares.

Upon completion of the merger, expected to occur June 30, Bernard Imbeault, the chief executive officer of Pizza Delight, will serve as CEO and president of the merged firms.

Afton owns the 175-store 241 Pizza chain.

The combined companies will operate and have under development more than 700 franchised and corporate outlets, generating an estimated $400 million (U.S. $260 million) in system sales, almost $60 million (U.S. $39 million) in revenue and approximately $15 million (U.S. 9.8 million) in earnings before income tax, depreciation and amortization (EBITDA) on an annualized basis.

* In related news Afton reported that its first quarter 2002 revenues and EBITDA were down slightly compared to the same period a year ago.

First quarter '02 revenues were $6.9 million (U.S. $4.5 million) and EBITDA was $1.4 million (U.S. $910,000), versus $7.8 million (U.S. $5 million) and EBITDA of $2.25 million (U.S. $1.5 million) for the same period last year.

Net income declined to $270,461 (U.S. $175,800) for the period, versus from $536,009 (U.S. $349,000) last year.

Same-store sales were flat for the period and overall system sales declined to $39.8 million (U.S. $25.8 million) for the quarter, versus $42.7 million (U.S. $27.8 million). Afton blamed the decline on the targeted closure of underperforming stores.

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