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FURR'S/BISHOP'S ANNOUNCES SUCCESSFUL COMPLETION OF DEBT RESTRUCTURING; ANNOUNCES LOSS FOR FISCAL YEAR AND FOURTH QUARTER

FURR'S/BISHOP'S ANNOUNCES SUCCESSFUL COMPLETION OF DEBT RESTRUCTURING;
 ANNOUNCES LOSS FOR FISCAL YEAR AND FOURTH QUARTER
 LUBBOCK, Texas, March 27 /PRNewswire/ -- Furr's/Bishop's, Incorporated (NYSE: CHI) announced today that Cafeteria Operators, L.P., an indirect subsidiary of Furr's/Bishop's, has successfully completed the restructuring of Cafeteria Operators' $60 million of 10.25 percent Series A senior notes due 1997 and its $90 million of 10.75 percent Series B senior notes due 2007, in each case plus accrued interest, and of commercial bank debt of Cafeteria Operators and Furr's/Bishop's indirect subsidiary, Cavalcade Foods, Inc., totaling $29 million plus accrued interest.
 Pursuant to the restructuring, Cafeteria Operators, among other things, issued $187.4 million of new 11.00 percent notes due June 1998 in exchange for its entire $170 million indebtedness plus accrued interest. The new notes include all accrued and unpaid interest to date. Additional notes will be issued in June, 1992 for the interest payment then due and cash interest payments will begin Dec. 31, 1992. All currently scheduled principal payments of Cafeteria Operators will be deferred until June 30, 1998. Principal payments on the 11.00 percent notes are required to be made on an annual basis in an amount equal to 85 percent of any excess cash flow (as defined in the indenture). The new 11.00 percent notes are secured by all the assets of Cafeteria Operators. Additionally, Cavalcade Foods, Inc. issued a new 9 percent note in the amount of $9.4 million including all accrued and unpaid interest in exchange for a $9 million note owed to a commercial bank and originally due March 31, 1993. Cash interest payments on that note will begin March 31, 1993 and all scheduled principal payments will be deferred until June 30, 1998. Cavalcade Foods' note is secured by certain real estate in Lubbock held by Cavalcade Development, L.P., a subsidiary of Furr's/Bishop's, and by all of the limited partnership interests of Furr's/Bishop's Cafeterias, L.P., a subsidiary of Furr's/Bishop's, and all of the capital stock of Cavalcade & Co., Inc., a subsidiary of Furr's/Bishop's and managing general partner of Furr's/Bishop's Cafeterias and Cafeteria Operators. Following the debt restructuring, Cafeteria Operators plans to spend approximately $81 million during the next five years to expand its specialty restaurant operations, refurbish many of its existing cafeterias and build new restaurants. In connection with the debt restructuring, the holders of Cafeteria Operators' debt will receive warrants to purchase an aggregate of 1,400,000 shares of Class B common stock at $.75 per share or 7.77 percent of the shares of Furr's/Bishop's common stock on a fully diluted basis.
 The indenture for the new 11.00 percent notes contains a provision allowing Cafeteria Operators to pay out funds to allow Furr's/Bishop's to pay dividends on its securities if, among other things, Cafeteria Operators meets certain earnings tests for three consecutive years and at least one-half of the principal amount of the 11.00 percent notes have been redeemed. Accordingly, Furr's/Bishop's will not be able to pay dividends on its securities prior to the end of fiscal year 1994. Under the terms of the debt restructuring, Cafeteria Operators may, on or after Oct. 3, 1993, make distributions under certain circumstances, including to enable Furr's/Bishop's to provide for the purchase of Furr's/Bishop's equity securities, if, among other things, certain cash flow tests are met. Furr's/Bishop's stated that although its certificate of incorporation prohibits the company from purchasing any shares of Class A common stock while arrearages exist on the payment of the Series A $9.00 convertible preferred stock dividend, the self tender offer to purchase an aggregate of at least two million shares of Furr's/Bishop's Class A common stock at $4.00 per share remains a continuing obligation of Furr's/Bishop's.
 A promissory note of Cavalcade Holdings, Inc. and Furr's/Bishop's owed to Michael J. Levenson, chairman of Furr's/Bishop's, in the approximate amount of $4.5 million will be contributed as capital, and a $1.5 million stock subscription fee will be extinguished in connection with the termination of a stock subscription agreement with Levenson pursuant to which he agreed to subscribe for up to two million shares of Furr's/Bishop's Class B common stock. Also, in connection with the termination of the stock subscription agreement and the debt restructuring, a subsidiary of Furr's/Bishop's has canceled a $3.5 million, five-year management agreement with an affiliate of Levenson and has entered into a $2 million, four-year management agreement with another affiliate of Levenson.
 In connection with the debt restructuring, Levenson has withdrawn as special general partner of all partnership subsidiaries of Furr's/Bishop's, including Cafeteria Operators, and has transferred his general partner interest to Cavalcade & Co. without compensation. Levenson remains chairman of the board of Furr's/Bishop's and its subsidiaries.
 Furr's/Bishop's also announced that in connection with the restructuring it has taken charges for the fourth quarter of 1991 in the aggregate amount of $12.9 million to account for the write down of assets related to certain restaurants and charges related to the debt restructuring, organizational restructuring and certain potential tax and other liabilities.
 Furr's/Bishop's also announced today that revenues for the fourth fiscal quarter ended Dec. 28, 1991 were $66.2 million, a decrease of $2.0 million or 3.0 percent from the fourth quarter of 1990. Net loss for the fourth quarter of 1991 was $20.5 million or $1.97 per common share primarily as a result of charges in the aggregate amount of $12.9 million arising from the restructuring as compared to a net loss of $2.9 million or $0.43 per common share for the 13 weeks ended Dec. 29, 1990. Selling, general and administrative expense was higher by $2.3 million in the fourth quarter of 1991 compared with the same period in 1990. Cost containment measures instituted by the company resulted in lower expenses in salaries, wages and advertising while workers' compensation and other insurance costs increased.
 Revenues for fiscal year 1991 were $268.0 million, a decrease of $16.5 million or 5.8 percent from revenues in the same period of 1990. Net loss for fiscal year 1991 was $31.8 million or $3.46 per common share as compared to a net loss of $818 thousand for the same period in 1990 or a net loss of $0.73 per common share. The results of operations for fiscal year 1991 include special charges of $15.2 million. Revenues decreased primarily as a result of lower average weekly guest traffic of 5.1 percent which was partially offset by an increase in the average guest ticket. The war in the Persian Gulf, the national economic recession and intense competition in the food service industry negatively impacted revenues and results of operations for the period.
 Furr's/Bishop's also said that its board of directors has voted to pass and not pay the first quarter dividend of $.2925 per share on Furr's/Bishop's Series A convertible preferred stock. The company also did not pay the dividend on the Series A convertible preferred stock for the third and fourth quarters of 1991.
 As previously announced, Cafeteria Operators and Cavalcade Foods did not make scheduled interest payments on certain of their indebtedness on Sept. 30, 1991 and as a result each has been in default on such indebtedness, and since such time has been negotiating with their respective lenders with a view towards restructuring their indebtedness.
 Levenson, said, "This concludes a long and difficult process for the company. We are now poised to execute our strategy to return Furr's/Bishop's to profitability. Our same store sales and guest counts have taken an encouraging turn upward during the first quarter of this year, the result of which will, we believe, be favorable bottom line comparisons to the first quarter of 1991. We expect this favorable comparison to continue as sales increase and new expense controls take effect. The debt restructuring is a most welcome and exciting opportunity for Furr's/Bishop's and its customers, employees and security holders."
 Furr's/Bishop's is one of the largest operators of cafeterias in the United States, operating 119 cafeterias in 10 states in the Southwest, West and Midwest under the name "Furr's," 21 cafeterias in seven states in the Midwest under the name "Bishop" and eight specialty restaurants in five states.
 FURR'S/BISHOP'S
 Financial Data
 (Amounts in thousands except per share amounts)


(The results of operations of each of the 1990 periods have been restated to reflect the results of operations of Furr's/Bishop's Cafeterias, L.P. and its operating subisidiaries, Calvalcade Holdings, Inc. and Cavalcade & Co., Inc. as combined entities.)
 13 Weeks Ended 52 Weeks Ended
 Dec. 28, Dec. 29 Dec. 28 Dec. 29
 1991 1990 1991 1990
 Revenues $ 66,177 $ 68,184 $ 268,048 $ 284,569
 Net Loss (20,498) (2,948) (31,758) (818)
 Preferred stock
 dividend
 requirement (1,869) (1,869) (7,478) (7,478)
 Net Loss allocable
 to common
 stock $ (22,367) $ (4,817) $ (39,236) $ (8,296)
 Total number of
 common shares
 outstng. 11,326,291 11,326,291 11,326,291 11,326,291
 Net Loss per
 share of
 com. stock $ (1.97) $ (0.43) $ (3.46) $ (0.73)
 All per share amounts are after a provision for dividends on the Preferred Stock and were made using the outstanding common shares of Furr's/Bishop's at Dec. 28, 1991 as though the shares had been outstanding for all of the periods reported. The comments relating to the results of operations for the 52 weeks relate to the combined operating results of Furr's/Bishop's Cafeterias, L.P., and its operating subsidiaries, Cavalcade Holdings, Inc. and Cavalcade & Co., Inc. (together the predecessor entities) for the first quarter of 1991 and Furr's/Bishop's, Incorporated (FBI) for the last 39 weeks of 1991 compared to the results of operations for the predecessor entities for 1990. The comments relating to the results of operations for the 13 weeks ended Dec. 28, 1991 relate to the operating results of FBI for the fourth quarter of 1991 compared to the operating results of the predecessor entities for the fourth quarter of 1990.
 -0- 3/27/92
 /CONTACT: Alton Smith, chief financial officer of Furr's/Bishop's, 806-792-7151/
 (CHI) CO: Furr's/Bishops, Incorporated; Cafeteria Operations, L.P. ST: Texas IN: LEI SU: RCN


AH -- NY074 -- 2587 03/27/92 19:22 EST
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Date:Mar 27, 1992
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