Krispy Kreme repays $7.6 million of term debt in third quarter '08, may make further prepayments

By Jennifer Lanning Drey

Portland, Ore., Dec. 6 - Krispy Kreme Doughnuts, Inc. prepaid $7.6 million of its term loan during the third quarter of fiscal 2008, $5.0 million of which came from cash on hand, Krispy Kreme's chief financial officer Douglas Muir said Thursday during the company's quarterly earnings call.

Krispy Kreme made the prepayment in order to remain in compliance with the financial covenants under the credit agreement; however, the company has since determined that it would have been in compliance with the covenants without making the prepayment, he said.

"But we're not unhappy that we wound up with less debt than we had at the end of the last quarter," Muir said.

Krispy Kreme ended the third quarter with cash of $23 million and indebtedness of $88 million. The company has $11 million of unused capacity under its credit facility.

During the call, Muir said the company couldn't rule out having to make further unscheduled debt reduction payments in the future in order to remain in compliance with the financial covenants. At the same time, he added that the company does not expect to have to make any prepayments on term debt during the fourth quarter.

"That said, we're not ruling out making prepayments because as we have indicated before, we would like to reduce our indebtedness going forward," he said.

Since the start of fiscal 2008, Krispy Kreme has prepaid $21.9 million under its $110.0 million term loan, according to its earnings release.

Krispy Kreme's revenues decreased by 11.7% in the third quarter of fiscal 2008 as compared to the previous year's third quarter revenues. The net loss for the 2008 quarter was $798,000, compared with a net loss of $7.2 million in the 2007 quarter.

Krispy Kreme is a Winston-Salem, N.C.-based branded specialty retailer of doughnuts.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.