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Check, Please: Avado CFO Leaves

Also, former GE and Hertz finance executive signs on at Star Gas. Plus, Pacific Continental promotes controller to CFO.
Jennifer CaplanNovember 7, 2001
  • Managers at Avado Brands Inc., a Madison, Georgia-based restaurant chain owner, announced that CFO and treasurer Erich Booth resigned “to pursue other interests.” Company CEO Tom DuPree will take over financial responsibilities until a permanent replacement is found.

    Avado Brands owns and operates three restaurant brands including Canyon Cafe, Don Pablo’s Mexican Kitchens, and Hops Restaurant Bar and Breweries. In late August the company sold its McCormick & Schmick’s brand to Castle Harlan Inc. and Bruckmann, Rosser, Sherrill & Co., for $119.3 million.

    Avado has been through going through a rough patch of late. The company posted a third-quarter net loss of $64.4 million, up substantially from an $8.3 million loss in the third quarter of 2000. Net sales for the quarter were down to $150 million, compared with $174 million the year prior. Same-store sales for the third quarter of 2001 decreased 13.7 percent at Canyon Cafe, 4.2 percent at Don Pablo’s, and 3.3 percent at Hops. Meanwhile, EBITDA earnings dropped to $8.3 million in Q3 compared with $12.3 million in the year-ago period.

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    Management attributed the loss in large part to a $45 million noncash write-down associated with the Canyon Cafe brand. “As Canyon Cafe’s sales have continued to deteriorate and operating performance has failed to show significant improvement, there is uncertainty as to whether or not future cash flows will be sufficient to recover our investment in the brand. As a result, the decision was made to write these assets down to an estimated fair value,” Booth said in a statement.

    Booth joined Avado in 1991 and was instrumental in taking the company public that year. Since then, he has directed 10 M&A deals for the restaurant operator. During Booth’s tenure, Avado’s sales jumped from $67.6 million to a record $863 million in 1998. Most recently, Booth oversaw the sale of Avado’s Applebee’s business, which netted the company some $400 million.

    Booth’s leaving apparently caught the company’s investor relations department unaware. As of this morning, a profile of the company’s former CFO — picture and all — is still promimently displayed smack in the middle of the Avado home page.

  • Officials at Pacific Continental Corp., a bank holding company based in Eugene, Oregon, promoted vice president and controller Michael Reynolds to the CFO post. Company officials were not immediately available to comment on whom Reynolds is actually replacing.

    Pacific Continental’s net income for the third quarter came in at $1.5 million, up 4 percent from the year prior. Operating revenue in Q3 was up 6 percent over the same quarter last year. Earnings per diluted share remained flat from the prior year quarter at $0.31. Return on assets and return on equity for the quarter were 1.95 percent and 16.84 percent respectively.

  • Ami Trauber is the new finance chief at home-heating-oil distributor Star Gas Partners L.P. Trauber replaces George Leibowitz, who is retiring. Prior to joining Star Gas, Trauber worked at General Electric and as corporate vice president and controller of Ford Motor Co.’s Hertz Corp. Trauber will report directly to Star’s chairman and CEO, Irik Sevin.

    Star is the nation’s largest retail distributor of home heating oil, serving approximately 500,000 customers through its Petro and Meenan Oil subsidiaries. It is also the nation’s eighth-largest retail propane distributor, serving approximately 275,000 customers throughout the Midwest and Northeast. Star owns a controlling 80 percent interest in Total Gas and Electric, which sells natural gas and electricity in the Northeast and Mid-Atlantic to 54,000 customers.

    Trauber has a difficult job ahead. In the quarter ended June 30, Star Gas’ earnings plummeted 122 percent. The company’s losses more than doubled from the year-ago quarter, hitting $11.3 million. Sales in the quarter increased 28 percent to $166 million, due to an additional $21.9 million provided by the home-heating-oil segment, a $8.8 million increase in the propane segment, and a $5.2 million increase in TG&E sales.

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