LOS ANGELES -- Smart & Final here said last week it anticipates the sale of its Florida food-service and stores businesses to Gordon Food Service, Grand Rapids, Mich., will result in a loss of $40.2 million, which it recorded as part of a special charge in its results for the second quarter and first half ended June 15.
During a conference call with investment analysts to discuss these results, Ross Roeder, Smart & Final's chairman and chief executive officer, said the final terms of the transaction are still being negotiated, but he expects the deal to close in August.
As previously reported, Smart & Final signed a letter of intent last month to sell its Florida operations -- which include 14 stores, a full-service distribution center in Miami, and a meat facility in Orlando -- to GFS.
Explaining the reasons for the sale, Roeder told the analysts, "We just haven't reached break-even in our operations there," adding that it would require "a significant investment to exploit our potential" in Florida.
Smart & Final recorded a total of $68 million in special charges for the quarter, including $11.5 million in restructuring charges related to its Northern California food-service operation, and $16.3 million in other charges, including the cumulative effect of accounting change for financial statement consolidation of Smart & Final's synthetic lease facility.
The company noted that these special charges were the primary cause for its recording a loss of $69.2 million, or $2.31 per share, in the 12-week second quarter, compared with a profit of $2.1 million, or 7 cents a share, in the previous year's second quarter.
In this year's second quarter, sales rose 4.8% to $431.6 million, and comparable-store sales (not including the Florida stores) increased 3.7%.
Year-to-date, sales were up 4.9% to $823.4 million, and comparable-store sales (not including Florida) grew 3.9%, but the company had a net loss of $69.1 million, or $2.32 per share, vs. a net income of $2.6 million, or 9 cents per share, in last year's first half.