Afton Food Group posts Q3 loss

Dec. 1, 2002

BURLINGTON, Ontario -- Afton Food Group Ltd. (TSX: AFF) announced losses for its third quarter, ended Sept. 30, and for the first nine months of 2002.

According to a release, the company, which franchises 241 Pizza, Robin's Donuts, Ruffage, Donut Delite Café and Mrs. Powell's Bakery Eatery reported revenues of $7.1 million (U.S. $4.5 million) for the third quarter, versus $7.9 million (U.S. $5 million) for the same period one year ago.

The drop netted a loss of $155,000 (U.S. $99,000) versus a profit of $202,000 (U.S. $129,000) one year ago.

For the first nine months of the year, Afton reported revenues of $21 million (U.S. $13.4 million) versus $23 million (U.S. $14.7 million) for the same period last year.

For the year, the company reported a net loss of $7.2 million (U.S. $4.6 million) versus a profit of $1.2 million (U.S. $766,000) for the same period last year.

According to Afton, that loss reflects a $9.97 million (U.S. $6.4 million) restructuring charge taken during the second quarter.

Afton attributed revenue declines to delays in the completion of new franchise and supplier agreements, poor results from certain corporate stores (which have now been closed or sold) and continued losses from its call center, which was launched in late 2001.

Additionally, Afton had to issue 1,470,588 common shares of its stock to Pizza Delight Corporation during the third quarter. The outlay was in settlement of a $1.25 million (U.S. $799,000) penalty Afton had to pay for its non-completion of a proposed merger between the two companies.

The merger was announced last April (See "Canada's Afton Food Group to merge with Pizza Delight"), but it was terminated in July (See "Pizza Delight drops merger agreement with Afton Food Group") when Pizza Delight questioned whether Afton had made full disclosure about the company's financial condition.

Topics: Public Companies

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