Mrs. Fields September 2008 interest payment in jeopardy

By Caroline Salls

Pittsburgh, Nov. 13 - Mrs. Fields Famous Brands, LLC's management is not sure the company will have enough cash to make its September 2008 interest payment on its 9% senior secured notes and 11½% senior secured notes, according to a 10-Q filed Tuesday with the Securities and Exchange Commission.

The company said the uncertainty is based on historical results and current projections.

Mrs. Fields said it is taking actions to improve its liquidity, financial condition and results of operations, including staff changes and investment initiatives to reduce costs and improve revenues; possible reinvestment of net proceeds from the sale of the company's Pretzel businesses into higher yielding assets; the sale of additional assets; and raising additional equity capital.

Mrs. Fields' management and its major shareholder have retained Blackstone Advisory Services to help the company review its strategic alternatives.

According to the 10-Q, at Sept. 29 the company had $24.1 million of cash on hand.

Mrs. Fields said it expects its principal uses of cash to be working capital, capital expenditures and semiannual interest payments of $10.3 million on its 9% senior secured notes and 11½% senior secured notes, of which $10.3 million will be due on March 15, 2008 and Sept. 15, 2008.

Because of borrowing restrictions under the senior secured notes indenture, the company said its ability to obtain additional debt financing is significantly limited.

Mrs. Fields, based in Salt Lake City, has 2,100 franchised and licensed concept locations worldwide.

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