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Papa Murphy’s Unveils Two Strategic Initiatives

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Papa Murphy’s said pre-market Monday it is advancing two of its strategic initiatives which are designed to improve near-term operating performance and its go-forward profitability. The company said it will book a one-time after-tax charge of up to $7.4 million tied to these actions, which are expected to benefit annual EBITDA by about $1.9 million and improve annual EPS by $0.09 per share.

Papa Murphy also said that it will close up to 16 company-owned stores in several markets by year-end. Most closures will take place in Q2. The company is preparing some markets to be refranchised and expects a one-time charge of up to $2.3 million and an annual EPS benefit of approximately $0.05. The company added that it has partnered with digital ordering provider Olo, to create a platform for online and mobile ordering beginning in Q1 2018. A move to Olo’s digital platform will generate cost efficiencies, benefiting go-forward annual EBITDA by $0.9 million and improve annual EPS by $0.04 per share. As part of the transition, the company expects to take a one-time charge of about $5.1 million related to the impairment