Friendly Ice Cream to explore strategic alternatives

By Lisa Kerner

Charlotte, N.C., March 7 - Friendly Ice Cream Corp. said its board of directors will explore strategic alternatives, including a possible sale of the company, to enhance shareholder value.

The company has retained Goldman Sachs & Co., as financial adviser, and Weil, Gotshal & Manges LLP, as legal adviser, to assist its board in the exploration process, according to a company news release.

Shareholder Sardar Biglari, chairman of the Lion Fund, LP, recently criticized the company's governance and is seeking nomination to the board. San Antonio-based Lion Fund owns 14.92% of the company's stock, or about 1.2 million shares.

The Wilbraham, Mass.-based restaurant company also announced its fourth-quarter and full-year 2006 results.

For the quarter ended Dec. 31, reported net income was $0.1 million, or $0.02 per share, up from a net loss of $30.2 million, or $3.82 per share, for the prior-year period.

Total revenues were $122.4 million for the quarter, compared with total revenues of $123.5 million for the same period in 2005.

Net income for the full year rose to $4.9 million, or $0.61 per share, from a net loss of $27.3 million, or $3.49 per share, reported for the full-year 2005.

For 2006, total revenues were $531.5 million, up slightly from $531.3 million for the prior year.

"I believe there are opportunities to improve our performance, increase our bottom line and build long-term shareholder value," president and chief executive officer George Condos said in the release. Condos assumed his position in January.

"We will continue to leverage the value of the Friendly's brand by improving the quality of our menu and overall guest experience and by creating a more contemporary environment within our restaurants," Condos added.

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