For Immediate Release
Chicago, IL – September 7, 2010 – Zacks.com Analyst Blog features: Burger King Holdings Inc. (BKC), McDonald's Corp. (
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Here are highlights from Friday’s Analyst Blog:
Burger King to be Bought by 3G
Burger King Holdings Inc. (BKC), the world’s second-largest hamburger chain after McDonald's Corp. (
The offer price is at a 46% premium to the share price before the speculation of buyout talks in the market on Wednesday. The transaction is expected to close in the fourth quarter of 2010.
As per the agreement, Burger King's Chairman and CEO John Chidsey will become co-chairman of the board in the new company, and 3G Capital’s Managing Partner Alex Behring will be the other co-chairman.
For the second time in less than a decade, Burger King is going private. In 2002, Burger King was acquired by private equity funds controlled by TPG Capital LP, Bain Capital Investors and Goldman Sachs Capital Partners. The private equity firm purchased the company from Diageo plc (DEO), a British spirits company for $1.5 billion.
In May 2006, Burger King went public, although private equity firms, including TPG, Bain Capital and Goldman Sachs still own 31% stake in Burger King. These private equity firms have agreed to tender their shares into the offer, which 3G Capital will not start before September 17, 2010.
However, the completion of the deal is subject to regulatory as well as shareholders’ approvals and other customary closing conditions. Moreover, there will be a 40-day period where Burger King can consider if it gets any lucrative offer from any third party, running through October 12, 2010. Though possibility of higher bid seems negligible and completion of the deal is likely.
Krispy Kreme Beats, Raises Outlook
Krispy Kreme Doughnuts Inc.'s (KKD) second quarter fiscal 2011 earnings were 3 cents per share, which outdid the Zacks Consensus Estimate of zero per share. The company also reported profit of $2.2 million compared to a loss of $0.16 million posted in the prior-year quarter. The better-than-expected results were driven by a growth in the top line.
Total revenue climbed 6.3% year - over - year to $87.9 million and also out performed the Zacks Consensus Estimate of $84.0 million. All the four segments reported increase in revenues. Segment-wise, Company stores revenues were flat year over year at $60 million, Domestic franchise revenues spiked up 15.1% to $2.1 million, International franchise revenues upped 5.3% to $4.0 million and KK Supply Chain revenues (including sales to Company stores) were up 18.9% to $44.9 million.
For the seven consecutive quarters, same store sales at Company stores rose 5.7%. Domestic franchise same store sales grew 5.0%, while International franchise same store sales declined 14.3%.
Direct operating expense, as a percentage of total revenue, surged 140 basis points to 87.5% and general and administrative expenses dropped 20 basis points to 5.6%. As a result, operating income expanded 41.2% to $4.2 million and operating margin perked up 110 basis points to 4.7%.
Interest expense reduced $0.7 million from the prior-year quarter to $1.6 million due to a decline in debt.
Cooper Profit Grows, Lifts View
Eye-care and surgical product maker Cooper Companies Inc. (COO ) reported better-than-expected third-quarter fiscal 2010 (ended July 31, 2010) results with adjusted earnings per share of 91 cents outshining the Zacks Consensus Estimate of 71 cents and the year-ago earnings of 54 cents.
Adjusted earnings exclude litigation settlement charges, restructuring costs and acquisition expenses. Net profit zoomed 81% year-over-year to $39.7 million (or 86 cents a share) boosted by healthy performance at the company’s CooperVision (CVI) eye-care division and lower sales costs.
The healthy results coupled with management’s upbeat guidance pushed up Cooper’s shares that leapt $1.74 (or 4.22%) to $43 in after-hours trading on Sep 2.
Revenues
Revenues rose 4% year-over-year to $295.6 million as the company gained market share in its CVI business. However, sales missed the Zacks Consensus Estimate of $297 million.
Sales at the CVI division grew 3% year-over-year to $249 million on the back of higher sales from toric lenses (up 9% year-over-year) and single-use sphere lenses (up 10%), partly offset by declines in multifocal lenses (down 7%) and non-single-use sphere lenses (down 2%). Revenues from the CooperSurgical (CSI) surgical division increased 5% year-over-year to $46.6 million boosted by higher sales of hospital products (up 18%).
Margin Analysis
Gross margin improved to 60% from 51% a year-ago, supported by higher revenues and manufacturing efficiency gains at the CVI unit. Higher gross margin helped the company to improve operating margin in the quarter which rose to 17% from 12% a year-ago.
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BURGER KING HLD (BKC): Free Stock Analysis Report
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MCDONALDS CORP (MCD): Free Stock Analysis Report
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