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CNNfn after the bell
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January 11, 1999: 5:45 p.m. ET
The Cheesecake Factory issues profit warning; HCC offers to buy Centris
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NEW YORK (CNNfn) - A popular restaurateur warned of weaker profits, while a deal in the insurance sector was brewing after the closing bell Monday.
The Cheesecake Factory Inc. (CAKE) reported fourth-quarter profits will miss analysts' expectations of 21 cents per share. The restaurateur expects diluted earnings per share to fall between 14 cents and 16 cents, compared with 16 cents per share for the same period last year. The company blamed start-up costs and temporary labor inefficiencies related to an increase in bakery sales volumes, heavier promotional costs, and price volatility in certain bakery-related commodities, such as cream cheese. The company expects to increase revenue and earnings by 25 percent or more in 1999.
In another earnings disappointment, ESC Medical Systems Ltd. (ESCMF) announced that fourth-quarter operating results would be adversely affected by a slowdown in the U.S. aesthetic market, specifically in the area of hair removal. The company, which retails laser products for hair removal and skin care, said fourth-quarter revenue will total $50 million. ESC plans to implement steps to improve efficiencies and expects benefits by the second half of 1999.
In merger news, Hello Direct Inc. (HELO) has signed a definite agreement to acquire privately-held PhoneZone.com for an undisclosed amount, expanding its electronic commerce capabilities. PhoneZone.com, whose 1998 revenue were about $1.2 million, publishes a Web buyers' guide covering telecommunications and networking products and services. It also offers comparative research, analysis, and purchase information on telecom and networking solutions for small and medium-sized companies.
The insurance industry also saw a potential deal. HCC Insurance Holdings Inc. offered to acquire The Centris Group Inc. for $13.25 per share in cash, a 40 percent premium over Centris' recent average closing price. Additionally, HCC announced that it has already purchased 911,200 shares or 7.79 percent of Centris common stock. 
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