Specialty Foods Group Inc. Comments on Continuous Disclosure review by Ontario Securities Commission of Specialty Foods Group Income Fund

HAMPTON, VA, Nov. 4, 2011 /CNW/ - Specialty Foods Group, Inc. (SFG or the Company) announced today that, in connection with a continuous disclosure review of Specialty Foods Group Income Fund (the Fund) by the Corporate Finance staff of the Ontario Securities Commission (OSC), SFG has agreed to make certain ongoing disclosure via public filings under the Fund's profile on SEDAR so long as the Fund holds an equity interest in SFG.

SFG's ongoing disclosure will include:

  • its annual financial statements for the year ended January 1, 2011 prepared in accordance with U.S. generally accepted accounting principles for private entities (U.S. GAAP) and audited using U.S. PCAOB GAAS (as defined in National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards) together with management's discussion and analysis (MD&A) in relation to such statements prepared in accordance with the disclosure requirements of Item 303 of Regulation S-K under the 1934 Act (Item 303).

  • its annual financial statements for subsequent financial years prepared in accordance with U.S. GAAP and audited using U.S. PCAOB GAAS together with the related MD&A disclosure prepared in accordance with the disclosure requirements of Item 303.

  • its quarterly financial statements for subsequent interim periods prepared in accordance with U.S. GAAP (except to the extent such statements do not include full note disclosure) together with the related MD&A disclosure prepared in accordance with the disclosure requirements of Item 303.

  • The Company's financial statements for its most recently completed interim period in 2011 in the form available (without full notes and accompanying MD&A).

The Company intends to file such documents on SEDAR for periods prior to the date hereof to the extent practicable during November 2011.

The MD&A accompanying SFG's audited financial statements for 2010 will provide information concerning the status of the litigation involving SFG and Nathan's Famous Systems, Inc. (Nathan's), together with risks and uncertainties arising from the scheduled expiry of the Company's license agreement with Nathan's in 2014, particularly in the event that such agreement is not renewed or replaced.  Such uncertainties and risks could include shut down costs associated with operating facilities, severance costs, pension deficiency funding, environmental remediation (if any) and other costs, the nature and extent of which are currently unknown.  Additional disclosure will also be provided regarding the Company's efforts to renew or extend the maturity of its outstanding debt obligations which otherwise come due in December 2011.

The Company incurred expenses on behalf of the Fund for which it has not been reimbursed.   The Company intends to disclose further details in its MD&A for 2010.  It is not known at this time whether the aggregate amount owing to the Company by the Fund exceeds the value of the Fund's interest in SFG.   SFG will give consideration as to how to collect any amount owing and will in due course make disclosure of its intentions.  Such collection efforts may, depending upon the quantum of the amount owing and the value of the Fund's remaining assets, result in the insolvency or liquidation of the Fund.

The Company is a leading independent U.S. producer and marketer of premium branded and private-label processed meat products.  SFG sells a wide variety of products such as franks, hams, bacon, luncheon meats, and delicatessen meats.  These products are sold to a diverse customer base in the retail (e.g. supermarkets) and foodservice (e.g., restaurants) sectors.  SFG sells products under a number of leading national and regional brands, such as Nathan's, Field, Fischer's, Mickelberry's, Kentucky Legend and Scott Petersen as well as on a private-label basis.

As previously publicly disclosed, SFG and certain of its affiliated companies implemented a financial restructuring in 2006 which resulted in the issuance of convertible debentures by SFG.  In connection with such restructuring, among other things, the debenture holders acquired the right to appoint a majority of the SFG directors and the right, upon conversion of their debentures, to reduce the Fund to an indirect 8% interest in SFG.

The Company is in possession of what purports to be a list of non-objecting beneficial owners of units of the Fund.  If a person appearing in such list (i) wishes to obtain a copy of same, (ii) follows the requisite procedures under the Fund's constating documents and (iii) delivers a copy of the relevant materials to the Company, the Company will provide its copy of such list so long as such person first acknowledges in writing to the Company that the Company is providing no representation or warranty as to the accuracy, completeness or currency of such list and that the Company accepts no responsibility for its contents.

This release contains, and remarks made by representatives of the Company in connection with this release, may contain forward-looking statements.

This news release contains certain forward-looking statements and information, which reflect the current view of SFG with respect to future events and financial performance.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "plan", "foresee", "believe" or "continue" or the negatives of such terms or variations of them or similar terminology.  Any such forward-looking statements are based on SFG's current expectations, estimates, projections and assumptions made in light of its experience and perception of historical trends.

Any such forward-looking statements are subject to risks and uncertainties and SFG's actual results of operations could differ materially from historical results or current expectations.  The risks that could cause actual results to differ from current expectations include: stability in the U.S. economy; stability in prevailing exchange rates; stability in the availability and pricing of raw materials, energy and supplies; the ability to implement price increases successfully; stability in the competitive environment; no future product recalls; the continued ability of the Company to access cost effective capital when needed; and no unexpected or unforeseen events occurring that would materially alter the Company's current plans.  All of these assumptions have been derived from information currently available to the Company including information obtained by the Company from third-party sources. These assumptions may prove to be incorrect in whole or in part. In addition, actual results may differ materially from those expressed, implied or forecasted in such forward-looking statements, which reflect the Company's expectations only as of the date hereof.

Factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by the forward-looking statements include risks associated with implementing and executing complex projects and plans; risks posed by food contamination, pandemics and product recalls; risks associated with the price of commodities and the inability of the Company to control commodity prices; risks associated with exchange rate fluctuations; risks associated with changing consumer tastes, preferences and buying patterns; and risks posed by competition.

Matters creating particular uncertainty regarding the Company at present include the status of the Company's ongoing litigation with Nathan's, the Company's future viability if its agreement with Nathan's is not renewed or replaced prior to its 2014 expiry, whether the Company will be successful in negotiating an extension of the scheduled maturity in December 2011 of the Company's debt obligations and the costs of any such extension and what the consequences for the Company will be in the event that it is unable to negotiate such an extension or to negotiate replacement financing in either case on commercially reasonable terms.

Some of the forward-looking statements may be considered to be financial outlooks for purposes of securities legislation including, but not limited to, statements concerning future margins and capital expenditures.  These financial outlooks are presented in order to provide measurable targets that the Company aims to achieve and for which the Company can use to benchmark its results. These financial outlooks may not be appropriate for other purposes and readers should not assume they will be achieved.

The Company does not intend to, and the Company disclaims any obligation to, update any forward-looking statements (including any financial outlooks), whether written or oral, or whether as a result of new information, future events or otherwise, except as required by law.

The Company intends to appoint a professional information service for purposes of receiving and processing information inquiries for public information regarding the Company from Fund unitholders following the filing of the 2010 financial statements and MD&A.  Pending such appointment, for further public information regarding the Company, contact Steven Wright, Chief Financial Officer, Specialty Foods Group, Inc., 757 952 1200. 


SOURCE Specialty Foods Group, Inc.

For further information:

Pending such appointment, for further public information regarding the Company, contact Steven Wright, Chief Financial Officer, Specialty Foods Group, Inc., 757 952 1200. 

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Specialty Foods Group, Inc.

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