Coffee People, Inc. Files On Proposed Merger; Shareholder Vote Set for May 19, 1998.PORTLAND, Ore.--(BUSINESS WIRE)--April 27, 1998-- Merged Company to be Second Largest U.S. Specialty Coffee Retailer With Combined Systemwide Sales of $123 Million, Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Annual Revenue of $52.2 Million Coffee People, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :MOKA MOKA Methodology and Software Tools Oriented to Knowledge Based Engineering Applications ), a specialty coffee retailer and operator of coffee houses, announced today that it has filed a definitive proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. with the Securities and Exchange Commission for the pending merger with the U.S. operations of The Second Cup Ltd. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :SKL SKL Conservative Peasants Party (Poland) SKL State Key Laboratory SKL Simple Key Loader SKL Svenska Kriminaltekniska Laboratoriet (Swedish National Criminal Forensics Laboratory) ). Shareholders of Coffee People will vote on the merger at the company's annual meeting on May 19, 1998. "This proposed merger combines 39 Coffee People stores in two core markets -- Oregon and Arizona -- with the 277-store operation of Gloria Jean's This article or section deals primarily with Australia and does not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Inc., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Second Cup," said Taylor H. Devine, president and chief executive officer of Coffee People. Gloria Jean's, which had systemwide sales of approximately $103 million for its fiscal year ended June 28, 1997, includes 246 franchised and 31 company owned stores. The combined company will be the second largest specialty coffee retailer in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. with a total of 316 stores in 38 states and in six other countries. In addition to strengthening its position in the specialty coffee industry, the merger creates a platform for additional growth, organizational efficiencies and increased purchasing power Purchasing Power 1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. . "We're confident that the combined company will be greater than the sum of its parts, and will be an even stronger factor in the specialty coffee industry," said Alton McEwen, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Second Cup's U.S. operations. In its filing with the SEC, Coffee People said that for the 24-week period ended December 13, 1997, pro forma revenue for the combined companies was $30.4 million with pro forma net income of $1.5 million, or $0.14 per share. On a stand alone basis, Coffee People had revenue of $6.3 million and net income of $188,000, or $0.06 per diluted share, for its most recent quarter ended December 31, 1997. On an annual basis, pro forma revenue for the two companies would have been approximately $52.2 million for the fiscal year ended June 28, 1997. For the same period, pro forma results showed a net loss of $7.7 million, or $0.80 per share, which included a $5.5 million charge taken by Coffee People in the second quarter of 1997 for closing seven stores and related corporate restructuring. Coffee People reported revenue of $20.4 million and a loss of $6.4 million, or $1.96 per diluted share for its fiscal year ended December 31, 1997 "Both Coffee People and Gloria Jean's have undergone substantial improvements in this past year which are positively affecting current financial results," Devine said. The proposed merger creates a stronger balance sheet for the combined company, providing support for additional growth. Total assets at December 13, 1997, on a pro forma basis, were $60.5 million compared to $17.0 million for Coffee People on a stand alone basis, while pro forma stockholder's equity Stockholder's equity The residual claims that stockholders have against a firm's assets, calculated by subtracting all current liabilities and debt liabilities from total assets. was $45.8 million compared to $8.3 million for Coffee People alone. "With the combination, there will be greater internal financial resources and improved access to capital needed to continue building the company in the future," said McEwen, who will become president and chief executive officer of the combined company following the merger. "We also believe that there will be enhanced opportunities to take part in an industry consolidation through transactions with other strong industry participants." The planned merger changes the balance of ownership of Coffee People. As part of the transaction, Coffee People, which currently has 3.3 million shares outstanding, will issue approximately 7.5 million shares of Coffee People common stock to Second Cup, giving Second Cup 69.5 percent ownership of the combined company. As a result of the change of control in the company, the merger will be accounted for as a "reverse purchase" with Gloria Jean's treated as the acquirer for accounting and financial purposes. It is expected that Coffee People's fiscal year will be changed to end on the last Saturday of June, consistent with Second Cup's fiscal year. "We anticipate that the combined company will benefit from a centralized general and administrative overhead structure, other operating synergies, purchasing efficiencies and vertical integration of roasting and retail activities," said McEwen. Certain management functions will be centralized in Castroville, California Castroville is a census-designated place (CDP) in Monterey County, California, United States. The population was 6,724 at the 2000 census. Castroville calls itself "Artichoke Center of the World" and hosts the annual Castroville Artichoke Festival. while Coffee People's operations will maintain a regional staff in Portland and Phoenix. Gloria Jean's owns and operates a full roasting facility in Castroville that currently supplies all 277 Gloria Jean's stores. Coffee People, headquartered in Portland, Oregon, has been in business since 1983 and operates coffee houses, Motor Mokas(R) drive throughs, and Aero Mokas(R) airport kiosks, primarily in Oregon and Arizona. Gloria Jean's is a leading specialty coffee retailer with a strong brand franchise throughout the United States. It also has 27 stores internationally with operations in Japan, Mexico, Ireland, Korea, Australia, and the United Arab Emirates United Arab Emirates, federation of sheikhdoms (2005 est. pop. 2,563,000), c.30,000 sq mi (77,700 sq km), SE Arabia, on the Persian Gulf and the Gulf of Oman. . The Second Cup Ltd., headquartered in Toronto, Canada, is the leading specialty coffee retailer in Canada with more than 300 retail outlets. For its fiscal year ended June 28, 1997, Second Cup had systemwide sales from its Canadian operations of $108 million (Canadian), revenue of $19.5 million (Canadian) and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $8.1 million (Canadian). This news release contains forward-looking statements that involve a number of risks and uncertainties. Actual results may differ materially from projected results. For a complete discussion of the risks associated with forward-looking information, refer to the Risk Factors contained in the company's 10-KSB for 1996 and 1997 and the Registration Statement on Form S-4 as filed with the Securities and Exchange Commission on April 24, 1998. The timing of the proposed transaction with Second Cup also is subject to uncertainty, due to several factors outside of Coffee People's control, including obtaining governmental approvals in a timely fashion, obtaining the consent of other third parties to the transaction and the satisfaction of other conditions to closing contained in the Agreement and Plan of Merger, dated February 19, 1998, a copy of which was filed with the SEC as an exhibit to its Registration Statement on Form S-4. CONTACT: Coffee People, Inc. Ken Ross, 503/672-9603 or The Second Cup Ltd. Kathy Welsh, 416/975-5541 or Gloria Jean's Inc. Alton McEwen, 408/633-6300 or in.ves'com Dolores Dolores (or Delores) was a common given name (until the 1960s in the USA); it is cognate with the English word "dolorous" (meaning sorrowful) and equivalent in meaning. Chenoweth, 503/291-1924 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion