US - US meat processor and restaurant chain Bob Evans Farms is to close 20 Bob Evans Restaurants.
The closures will take place over the next 12 months, with the majority to close by the end of May this year.
Chief Financial Officer Mark Hood said, “Closing a restaurant is a difficult decision as it directly impacts our guests and employees.
“These restaurants, however, despite efforts to improve performance, were not meeting expectations. Bob Evans Farms is committed to assisting impacted employees by offering positions in nearby restaurants where possible.
“In cases where relocation is not possible, severance benefits will be offered to full-time and part-time employees.”
The Company said that it owns 16 of the 20 affected restaurants, and that it will immediately seek to sell these properties, with net proceeds estimated between $15.0 and $17.0 million.
Although restaurants subject to closure generated approximately $20 million of annual revenue, this action is expected to improve annual operating income by approximately $2.5 to $3.0 million.
The Company estimates it will incur approximately $4.7 to $5.2 million of expenses related to the closures, with approximately $2.1 million of the total expected to be non-cash charges.
The Company said it will provide an update of the estimated expenses related to the restaurant closures when it reports its 2015 fourth-quarter results in June.
These expenses will be classified as non-GAAP items, and will be reflected primarily in fiscal 2015 fourth quarter results.
TheMeatSite News Desk