Restaurant firm owned by Cannae files bankruptcy

Cannae Holdings Inc. was spun off from Jacksonville-based Fidelity National Financial in 2017.

  • By Mark Basch
  • | 5:10 a.m. February 6, 2020
  • | 5 Free Articles Remaining!
American Blue Ribbon Holdings, the company that operates the Village Inn and Bakers Square restaurant chains, is 65.4% owned by Cannae Holdings Inc. ABRH is seeking Chapter 11 bankruptcy.
American Blue Ribbon Holdings, the company that operates the Village Inn and Bakers Square restaurant chains, is 65.4% owned by Cannae Holdings Inc. ABRH is seeking Chapter 11 bankruptcy.
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A restaurant company formerly controlled by Fidelity National Financial Inc. filed for Chapter 11 bankruptcy restructuring last week.

American Blue Ribbon Holdings, operator of the Village Inn and Bakers Square restaurant chains, filed petitions for Chapter 11 in U.S. Bankruptcy Court for the District of Delaware.

The Nashville, Tennessee-based company is 65.4% owned by Cannae Holdings Inc., the investment company spun off from Jacksonville-based Fidelity in 2017.

“Financial trends have been negative since 2017 as the restaurant operations struggled with declining sales and acceptable margins,” ABRH said in a news release.

The company said “the reorganization will facilitate the company’s Village Inn and Bakers Square restaurant brands evolution to a healthy core of restaurants and support an approach to the brands that is most beneficial for all stakeholders.”

Village Inn has 159 locations and Bakers Square has 22. ABRH said it is closing 33 underperforming restaurants as part of the reorganization.

ABRH also operates a pie-making business called Legendary Baking.

Cannae has majority ownership of two other restaurant chains, O’Charley’s and 99 Restaurants, which are not affected by the bankruptcy filing.

All of Cannae’s restaurant group reported revenue of $772 million and a net loss of $32.8 million in the first nine months of 2019.

ABRH said last week it expects losses at its operations to continue in 2020.

Cannae is headquartered in Las Vegas but is run by executives with ties to Fidelity.

Dun & Bradstreet files for IPO

When it was a subsidiary of title insurance firm Fidelity, Cannae was known for wheeling and dealing with investments in other businesses and the trend is continuing as an independent company.

In addition to the restaurant news, Cannae also last week said Dun & Bradstreet Corp. filed a confidential registration statement for an initial public offering with the Securities and Exchange Commission.

It was just a year ago that a consortium led by Cannae bought Dun & Bradstreet for $6.9 billion. Cannae owns 24.3% of the business data firm.

The investment group includes another company spun off from Fidelity, Jacksonville-based Black Knight Inc., which acquired 18.1% of Dun & Bradstreet.

No details of the proposed IPO were announced.

Insurance costs hit Landstar

Landstar System Inc. reported lower-than-expected fourth-quarter earnings last week because of higher insurance and claims costs.

The Jacksonville-based trucking company reported earnings of $1.27 a share, below its forecast of $1.40 to $1.46 a share.

Landstar already had been expecting earnings to be lower than the $1.68 it posted in the fourth quarter of 2018 because of a difficult freight environment.

Revenue dropped 16% in the quarter to $994.9 million.

“During the first half of 2019, I believe we were in a relatively healthy freight environment,” CEO Jim Gattoni said in Landstar’s conference call with analysts.

“Throughout the second half of 2019 however, weaker economic conditions, especially in the U.S. manufacturing sector, led to seasonal softness in Landstar’s truckload volumes,” he said.

“The softness began mostly in September and continued through the end of the 2019 fourth quarter.”

Landstar expects the softness to continue in early 2020. The company projects first-quarter earnings of $1.10 to $1.20 a share, down from $1.58 in the first quarter of 2019, and revenue of $915 million to $965 million, down from $1.33 billion.

Gattoni said industry trends are increasing its insurance costs, as opposed to safety concerns.

“We believe Landstar is one of the safest operators in the industry based on our low frequency of accidents,” he said.

“In recent periods, even though our frequency has remained relatively consistent, we’ve been experiencing elevated insurance and claims costs.”

Loss for Patriot Transportation

Jacksonville’s other publicly traded trucking company, Patriot Transportation Holding Inc., reported a loss for its first quarter ended Dec. 31.

Patriot recorded a net loss of $464,000, or 14 cents a share, in the quarter with revenue falling 11.6% to $24.8 million.

The company said the closing of a terminal in Charlotte, North Carolina, last year and downsizing certain customer accounts caused revenue to fall.

“While our business has not produced acceptable returns in the last couple of years, we are not accustomed to reporting a quarterly loss, and management is making changes to be sure we improve our results going forward,” CEO Robert Sandlin said in Patriot’s quarterly conference call.

That includes controlling costs and a new compensation program to help the company attract and retain drivers.

Despite the loss, Patriot in December declared a one-time special dividend of $3 a share and a quarterly dividend of 15 cents, its first-ever cash payments to shareholders.

“Our balance sheet remains strong with $19 million of cash and no outstanding debt,” Sandlin said.

Landstar is a nationwide freight transportation company while Patriot focuses on fuel transportation in the Southeast.

“Demand for our services during the quarter was lower than normal, but we anticipate demand to be high in most of our markets going into the busy season and we continue to evaluate new and current business based on price and efficiency of the daily operation,” Sandlin said.

Duos Technologies increases revenue

Duos Technologies Group Inc. said last week it expects to report 2019 revenue of $13.6 million, up 13% from 2018, and also projects revenue to continue growing this year.

 “We’ve entered 2020 with significant operating and sales momentum. Based on our current projections, we are anticipating continued, robust double-digit growth in 2020 and are reaffirming our annual revenue expectations of $20 million,” CEO Gianni Arcaini said in a news release.

The Jacksonville-based provider of intelligent analytical technology estimates it will report an operating loss of $2.5 million to $3 million for 2019.

Duos three weeks ago completed a reverse split in which stockholders received one share for every 14 shares they previously owned.

The company implemented the reverse split to raise its stock price and qualify for listing on the Nasdaq Capital Market. Duos currently trades on the OTCQX market.

With the reverse split, the stock has been trading near $7 recently, well above the $4 level needed to gain a Nasdaq listing.

International Baler reports loss

International Baler Corp. recorded a net loss of $323,614, or 6 cents a share, for the fiscal year ended Oct. 31, according to its annual report filed last week with the SEC.

The Jacksonville-based company, which makes balers used for recycling and waste disposal, said sales fell 14.3% to $9.53 million, mainly because of lower sales of auto-tie balers.

International Baler said sales have been impacted by a sharp drop in prices for old corrugated cardboard over the last three years, and a slowdown in demand for rubber balers.

PulteGroup buys Jacksonville-based construction firm

PulteGroup Inc. last week said it acquired Innovative Construction Group, a Jacksonville-based provider of wood-framed construction services.

Atlanta-based PulteGroup said ICG will continue to operate as a stand-alone operation.

The homebuilding company said the deal builds on its strategy to drive greater production efficiency.

“In acquiring ICG, we see the potential for our Jacksonville operations to benefit through faster cycle times, precision structural components and savings on lumber and other materials,” PulteGroup CEO Ryan Marshall said in a news release.

Terms of the deal were not disclosed. PulteGroup said in an SEC filing the acquisition will not have a material impact on its finances.



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