Michael Foods tight-lipped on hiring of advisers during earnings call

By Lisa Kerner

Charlotte, N.C., Aug. 14 - Michael Foods, Inc. representatives would not elaborate on why the company hired advisers during a second-quarter earnings conference call on Tuesday.

Earlier, Michael Foods announced it had retained Banc of America Securities and J.P. Morgan Securities to advise the company in evaluating strategic alternatives. No assurance was made that any transaction would occur, and Michael Foods said it would not comment further until it has entered into a definitive agreement.

Commenting on the company's second-quarter results, chairman and chief executive officer Gregg A. Ostrander noted Michael Foods continued to battle cost pressures including a record high cheese market. Production costs rose significantly as a result.

"While we have taken pricing actions with our customers, normal delays in affecting pass-throughs resulted in more modest margins for our sales in the second quarter," Ostrander said.

Second-quarter net sales were up 16% at $347.9 million from the prior-year period. Net earnings fell 43% to $3.7 million. The company reported strong cash flows, with invested cash totaling $35 million.

The Minnetonka, Minn., diversified foods processor/distributor anticipates improvement in its second-half EBITDA from the $78.6 million recorded for the six months ended June 30. EBITDA for the second quarter was $39.6 million.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.