Sara Lee

A little more than two years ago, JP Foodservice Inc.'s debut as a publicly traded company drew a huge ho-hum: The Columbia company's shares fell from $11.25 to $9.25 in its first six weeks of trading.After all, JP Foodservice had lost money in each of its first five years. The restaurant supply industry was known for fierce competition and slim margins. And on the high-flying, technology-laden Nasdaq exchange, JP Foodservice was hardly a sexy buy.But when JP Chairman and Chief Executive James L. Miller rang the opening bell yesterday on the New York Stock Exchange -- the stock's new home -- a lot had changed.

JP Foodservice Inc. said yesterday earnings for its fiscal first quarter were 51 percent below last year because of a one-time charge to account for the acquisition of two companies.Without the charge, earnings would have risen 91 percent in the first quarter of 1997, which ended Sept. 28, the company said.JP earned $1.8 million, or 9 cents a share, compared with $3.7 million, or 21 cents per share, for the same quarter a year before. Without the $5.3 million (17 cents a share) charge for the acquisitions, earnings per share would have been 26 cents.

In a signal of a widening rift between Columbia-based JP Foodservice Inc. and former parent company Sara Lee Corp., the companies said yesterday that three Sara Lee Corp. representatives had resigned from JP Foodservice's board.Sara Lee is entitled to the board seats because it holds 32 percent of JP Foodservice's stock.In February, the board's five other members vetoed a Sara Lee plan for JP Foodservice to take over Sara Lee's supply business, PYA/Monarch Inc.Sara Lee Executive Vice President C. Steven McMillan attributed the resignations to the failure of the deal.

JP Foodservice Inc. of Columbia saw its stock jump more than 5 percent yesterday after a strong quarterly earnings report, driven by sales growth four times faster than the pace the company had predicted after going public in late 1994.JP Foodservice, a restaurant supply business that used to be part of Sara Lee Corp., said it earned $1.4 million on sales of $295.8 million during the three months that ended March 30, compared with $1.5 million in the same period last year. The quarter is the third in the company's fiscal year.

JP Foodservice Inc. of Columbia said yesterday that it has cut off talks with Sara Lee Corp. about taking control of Sara Lee's restaurant supply business in a dispute over the financial terms of the deal, walking away from a chance to become a Fortune 500 company.Three months of talks ended abruptly Monday night when JP Foodservice's board voted at a meeting near the Chicago headquarters of Sara Lee to reject the proposal. Three independent directors and two JP Foodservice executives who sit on the board vetoed the plan, over the objections of three JP Foodservice directors appointed by Sara Lee.The board decided the deal would cut the earnings per share of existing JP Foodservice stock and effectively give control of the company to Sara Lee without making it pay any bonus above JP Foodservice stock's everyday trading value.

JP Foodservice Inc. of Columbia said yesterday that it has formed a special committee of independent directors, the next step in its proposed $946 million purchase of Sara Lee Corp.'s food-service business.The three-member group, headed by David Abramson, retained investment banking and legal firms to help in the evaluation. It hired Smith Barney Inc. and Morgan Lewis Githens & Ahn as financial advisers and Wachtell, Lipton, Rosen & Katz as legal counsel.In late November, Sara Lee, maker of Hanes underwear and Sara Lee cakes, offered to sell its PYA/Monarch food-service business to JP. The proposal called for Sara Lee to receive about $821 million in JP stock, or 52.4 million shares.

Maryland's newest Fortune 500 company may be in the process of being born -- but most people locally haven't really noticed.That is the result of Sara Lee Corp.'s unusual public offer last week to sell its food service distribution business to JP Foodservice Inc. of Columbia, a one-time Sara Lee subsidiary that gained its independence through a 1989 leveraged buyout and only went public last year."We might end up being the largest company in [metropolitan Baltimore]," JP Foodservice chief financial officer Lewis Hay III said.

Sara Lee Corp. said yesterday it was talking with Columbia-based JP Foodservice Inc. about combining JP Foodservice with Sara Lee's food-service business, PYA/Monarch.Sara Lee said it has proposed exchanging PYA/Monarch for 52.4 million shares of newly issued JP Foodservice common stock worth about $946 million after taking into consideration PYA/Monarch's debts of $125 million. Sara Lee would become the majority shareholder of JP Foodservice, which would continue to be publicly held.Sara Lee said it expects JP Foodservice's board to appoint a committee of independent directors to evaluate the proposal.

A night to remember is what Beth Goldsmith, chairwoman of the Hopkins Weizmann Research Exchange program, hopes "A Celebration of Achievement" will be on Sept. 11. How can it miss? Tony Randall has signed on as the master of ceremonies and even Sara Lee (of the desserts!) Schupf will be there in her capacity as chair of the American Committee for the Weizmann Institute, to present a special award to this year's guest of honor, Hopkins prez William C. Richardson.Last year's honorees, Dr. Marc Gertner and his wife, Nancy, an attorney, are also working on the Sunday evening event at the Peabody.

If you've ever wondered where "Chef Boy-ar-dee" came from, what the two "M's" in "M&M's" stand for, or whether it's "ketchup" or "catsup," you're sure to relish Vince Staten's new book, "Can You Trust a Tomato in January?"In this delightful cook's tour de farce, Mr. Staten reveals not only the succulent state secrets of the American food industry (there's more lemon in Lemon Pledge furniture polish, for instance, than in equal amounts of Country Time lemonade), but provides delicious etymologies of food terms and brand names as well.