Weekly Food Industry Report: June 28, 2013
Every week, we take a look into some of the biggest financial news to emerge from the world of food. Here is this week’s:
Cyanotech: Cyanotech Corporation, a world leader in health products high in nutrition, announced their financial results for the fourth quarter of the fiscal 2013 year. This quarter, net sales increased a total of 15%, the gross profit margin increased 5%, and operating income increased 92% since the fourth quarter 2012. For the year, net sales increased a total of 12%, with a gross profit margin increase of 40%.
Jerome Bettis and Papa John’s: Papa John’s announced that Jerone “The Bus” Bettis will be the newest franchisee. Bettis, who owns three out of twelve Papa John’s restaurants in Pittsburgh owned by the Bajco Group, plans to open additional restaurants in the area in the next couple of years. To celebrate the partnership, all Pittsburgh Papa John’s chains offered 36% off menu items ordered online.
Beef Prices: USDA cattle report showed a 3.1% decrease as compared to last year. Record highs were in tact when new placements of feedlot in May suggested a 2% increase, but with poor pasture conditions and drought affecting roughly 85% of Texas, cow slaughter rose 17%, with beef cow herding at its lowest percent in 72 years. The USDA forecasts cattle prices for 2014 to be at $134 per hundredweight, increasing 5.1% from levels projected in 2013.
Smashburger: Smashburger confirmed a $35 million finance from Golub Capital to fund ongoing growth, eliminating the possibility that the fast-casual burger chain would become public. Smashburger’s chair and chief executive Dave Prokupek said an initial public offering might be in the future, but as of now, Smashburger is positioned well enough to potentially become a leader in the better-burger category.
Pizza Hut and Wendy's: NPC International, the largest franchise owner of Pizza Hut, says they will expand their portfolio through the acquisition of 24 Wendy’s units in Kansas City. They have bought 22 Wendy’s in Kansas City for $9.3 million, plus franchise fees and capital, as well as two more in the works. NPC will acquire the Wendy’s locations through a subsidiary that will generate $32.7 million in net product sales during 52 weeks until Dec. 30.
Sonic: With fallen same-store sales during March, Sonic’s same-store sales in April and May have increased. As of May 31, Sonic’s net income increased 2.8%, but their revenue declined 1.9%. They will implement a new point-of-sale system for the first half of fiscal 2014. The company has lowered their projected number of restaurant openings to 25 or 30, instead of last year’s 36.
Noodles & Company: Noodles & Company raised their initial public offering to $15 to $17 a share, hoping to generate up to $89 million in profit. Earlier this month, they set their price range between $13 and $15, raising an estimated $77.5 million. The company plans on using $76 million of the projected $89 million to repay their debt.