Papa Murphy’s Announces Strategic Realignment of Resources to Drive Franchise Growth and Profitability
February 15 2017 - 3:01PM
Papa Murphy’s Holdings, Inc. (NASDAQ:FRSH) today announced a
strategic realignment of resources aimed at better supporting
franchise-owners and field staff while reducing overall selling,
general & administrative (SG&A) expenses.
The realignment, which includes the elimination
of certain management positions and other corporate personnel, is
expected to generate annual SG&A savings of approximately $1.5
million, including SG&A savings of approximately $0.3 million
at the national ad-fund. In 2017, the Company expects the
realignment will reduce SG&A expenses by nearly $1.2 million,
exclusive of a pre-tax charge of approximately $1.0 million related
to severance.
“While it’s always a difficult decision to
affect people, this realignment is necessary to ensure the business
is as efficient as possible while we remain laser-focused on the
support of our franchise owners and field staff as we all execute
on our key strategies,” said Papa Murphy’s interim Chief Executive
Officer, Jean Birch. “Operating with an efficient cost
structure is critical to the health of the Company and is in the
best interest of all of our stakeholders including our
franchise-owners, employees, and shareholders.”
The Company is focused on driving franchisee
growth and profitability through several key initiatives including
the refranchising of Company-owned stores. In this next phase
of its strategic development plan, the Company is seeking to
partner with high-quality well-capitalized franchisees who can buy
Company-owned stores and further build out select markets.
Additionally, in January, Papa Murphy’s launched its first-ever
national advertising campaign which consists of at least six weeks
of mostly incremental national television advertising in the first
half of the year. Lastly, the Company continues to focus on
driving sales growth through product innovation and the addition of
more customer convenience through its recently launched e-commerce
platform and the delivery test. These measures, along with
the above mentioned cost savings, are expected to drive ongoing top
and bottom line growth.
Birch continued, “As we re-size SG&A
expenses, focus on our asset-light franchise business model, and
continue to execute against our strategic plan, we see significant
long term opportunity for profitable growth at Papa Murphy’s.
We are confident that we now have the right structure, team and
strategies in place to enable us to drive our brand forward and
create long term value for all shareholders.”
FORWARD-LOOKING STATEMENTSThis
news release, as well as other information provided from time to
time by Papa Murphy's Holdings, Inc. or its employees, may contain
forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from those
anticipated in the forward-looking statements. You can identify
forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may
include words such as “guidance,” “anticipate,” “estimate,”
“expect,” “forecast,” “project,” “plan,” “intend,” “believe,”
“confident,” “may,” “should,” “can have,” “likely,” “future” and
other words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial
performance or other events.
Forward-looking statements in this press release
include statements relating to the Company’s expectations for
future financial or operational results, including future
reductions in SG&A expenses and severance costs as a result of
the realignment, potential growth arising from the Company’s
strategic initiatives, and the Company’s marketing strategy.
Although the Company believes any forward-looking statements are
based on reasonable assumptions, you should be aware that many
factors could affect our actual financial results and cause them to
differ materially from those anticipated in any forward-looking
statements. Please refer to the risk factors discussed in the
Company’s annual report on Form 10-K for the fiscal year ended
December 28, 2015 and quarterly reports on Forms 10-Q for the
fiscal quarters ended March 28, 2016 and September 26, 2016 (each
of which can be found at the SEC’s website www.sec.gov); each such
risk factors are specifically incorporated into this press
release.
Any forward-looking statement made by the
Company in this press release speaks only as of the date on which
it is made. The Company undertakes no obligation to update any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
ABOUT PAPA MURPHY’S
Papa Murphy's Holdings, Inc. (NASDAQ:FRSH) is a
franchisor and operator of the largest Take ‘n' Bake pizza brand in
the United States, selling fresh, hand-crafted pizzas ready for
customers to bake at home. The company was founded in 1981 and
currently operates more than 1,575 franchised and corporate-owned
fresh pizza stores in 38 States, Canada and United Arab Emirates.
Papa Murphy's core purpose is to bring all families together
through food people love with a goal to create fun, convenient and
fulfilling family dinners. In addition to scratch-made pizzas, the
company offers a growing menu of grab 'n' go items, including
salads, sides and desserts. Order online today at
www.papamurphys.com.
Media Contact:
Christine Beggan, ICR
papamurphys@icrinc.com
203-682-8329
Investor Contact:
Alexis Tessier, ICR
papamurphys-ir@icrinc.com
877-747-7272
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