Michael Foods confident in ability to replace current revolver before maturity

By Jennifer Lanning Drey

Portland, Ore., March 24 - Michael Foods, Inc. is confident it will be able to have a revolving credit facility in place prior to the November expiration of its current facility, Mark Witmer, Michael Foods' treasurer, said Tuesday during the company's fourth-quarter earnings conference call.

The company has $93 million of borrowing availability under the revolver, which it is only using to backstop letters of credit, he said.

Also regarding its capital structure, Witmer said Michael Foods believes it will be able to handle its holdco notes that go to cash-pay on Oct. 1 with no issue.

The company closed fiscal 2008 with $78 million of invested cash on Jan. 3.

When asked about planned uses of cash, Witmer said the company is seeking to keep liquidity as an asset.

Michael Foods reported fourth-quarter EBITDA of $54.2 million, compared to $51.5 million in the comparable period of 2007, representing a 5% increase. EBITDA for full-year 2008 was $200.0 million, compared to $175.9 million, up 14%.

The company said the quarterly EBITDA growth was mainly driven by the Crystal Farms' segment results, which offset an increase in selling, general and administrative costs due to performance-based incentive compensation.

Fourth-quarter net sales were $484.3 million, compared with $410.8 million in 2007.

Michael Foods is a Minnetonka, Minn., diversified foods processor and distributor.

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