By NEIL HARTNELL
Tribune Business Editor
AML Foods has agreed to sell the equipment, and assign the lease, for its former Carl's Jr site on Carmichael Road as it winds down a unit that generated a near-$1.5m loss in its final year.
The BISX-listed food retail and franchise group, in its annual report for the year to end-April 2018, said it was in talks to sell equipment at one of the other three Carl's Jr locations after it closed the hamburger chain following a five-fold increase in losses year-over-year.
"At April 30, 2018, the company was in discussions with a third party to purchase equipment at two of the three locations, and had written down property, plant, and equipment by $613,000 from $1.263m to the expected sale amount of $650,000," the footnotes to AML Foods' annual report confirmed.
"On July 26, 2018, the company entered into an agreement for the sale of equipment and assignment of lease of its Carl's Jr Carmichael Road location."
AML Foods' annual report revealed that Carl's Jr's net operating loss increased from $285,000 in the 12 months to end-April 2017 to $1.472m in the admittedly-shorter 2018 financial year, as the chain ceased operation on December 11.
Sales fell from $2.243m to $1.321m as a result of the shorter year, with gross profit down from $1.136m to $495,000. Selling, general and administrative expenses, though, were close to 2017's $1.421m, standing at $1.354m.
Franklyn Butler, AML Foods' chairman, told shareholders: "The closure of Carl's Jr in December 2017 was a difficult and painful decision but was the right decision for us. The benefits and synergies that were present when we opened the business had eroded, and the unit was requiring resources that far outweighed its relative position within our company. I am pleased to report there were no job losses with the closing."
He added that AML Foods was focused on increasing shareholder dividend payments to 50 percent of earnings, with July's $0.02 extraordinary dividend "the first step" towards achieving this goal.
Mr Butler said AML Foods was also committed to finding a new home for its Nassau Cost Right store, currently located in the Town Centre Mall, by end-2019.
Tribune Business also previously revealed that the group was seeking to base its Nassau training centre, and relocate its head office, at the former City Markets headquarters building and warehouse on the East-West Highway.
However, its $3 million purchase of the site has become bogged down in the ongoing litigation involving the property's owner, the City Markets employee pension fund, and this newspaper reported that AML Foods was close to walking away from the deal unless it can close quickly.
The situation was little changed in AML Foods' annual report, although it was not referred to by name. "On September 21, 2016, the company signed an agreement to purchase a building located at Soldier Road Industrial Site for $3.359m, which included taxes and fees," the annual report said.
"Subsequent to the payment of the final purchase price in July 2017, a dispute arose as to the ability of the vendors to provide good title to the property. This matter was taken to the court in February 2018, and the company is awaiting final court ruling on the title."
The City Markets employee pension fund trustees are currently embroiled in a legal challenge over whether they have the right, and ability, to sell the former head office and warehouse building.