Afton Food Group Announces Third Quarter Results.

Publication: PR Newswire

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COPYRIGHT 2002 PR Newswire Association LLC

AFF-TSX

Afton Food Group Ltd. (TSX: AFF) today announced the Company's third-quarter and nine-month financial results for the period ended September 30, 2002.

Following the announcement of its restructuring plans, at the end of the second quarter, Afton continues its work to improve its core operations to restore the Company to its previous levels of EBITDA. The Company has reduced its SG &A costs significantly and is actively focused on franchising its remaining corporate stores and curtailing further costs at its call center to achieve its EBITDA targets. Afton expects the benefits of its restructuring efforts to be visible to shareholders by the end of the current financial year.

During the quarter the Company franchised 7 corporate store locations and opened two new franchised stores. The Company is also negotiating leases on 45 properties for new Robin's(R) and 241 Pizza(R) locations, which will be available for franchising throughout 2003. In addition, the Company is in discussion with major corporations, which may result in the development of a significant number of non-traditional outlets.

For the third quarter the Company reported revenues of $7.1 million and EBITDA of $1.0 million versus revenues of $7.9 million and EBITDA of $1.7 million for the same period one year ago. Included in the third quarter EBITDA is approximately $720 thousand in recurring costs, of which $225 thousand has now been eliminated through the elimination of under performing corporate stores. The remaining $500 thousand, relating to the call center will be eliminated during the first quarter of 2003. For the nine months the Company reported revenues of $21 million and EBITDA of $2.2 million versus revenues of $23 million and EBITDA of $6.9 million for the corresponding period last year. The reduction in revenue and EBITDA for the three and nine-month periods is a result of delays in the completion of new franchise and supplier agreements, poor results from certain corporate stores, which have now been closed or sold and the continuing losses from the call center which are being addressed. For the third quarter, the Company reported a net loss of $155,000 or ($0.01) per share versus a profit of $202,000 or $0.02 per share. For the nine-month period the Company reported a net loss of $7.2 million or ($0.66) per share versus a profit of $1.2 million or $0.12 per share. The nine-month loss reflects the $9.97 million in restructuring charges taken during the second quarter. As a result of the restructuring the company has generated income tax recoveries of $2.4 million.

Afton is a leading franchisor consolidator in Canada's Quick Service Restaurant Industry. Afton's brands include: 241 Pizza(R), Robin's Donuts(R), Ruffage(R), Donut Delite Cafe and Mrs. Powell's Bakery Eatery(R).

This document may contain forward-looking statements, relating to the Company's operations or to the environment in which it operates, which are based on the Company's expectations, estimates, forecasts and projections. These statements are not guarantees of future performance, and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes...

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