Sbarro working to improve sales, lower costs, increase liquidity

By Jennifer Lanning Drey

Portland, Ore., May 20 - Sbarro, Inc. continues to implement strategic initiatives to increase sales, while also working to reduce costs and improve liquidity, Peter Beaudrault, chief executive officer of Sbarro, said Thursday during its first-quarter earnings conference call.

Sbarro posted first-quarter EBITDA, as calculated under the terms of its bank credit agreement, of $7.8 million. The figure compared to EBITDA of $9.1 million in the same period of 2009.

The company said the decrease was primarily the result of a decline in company-owned comparable unit sales and an increase in commodity costs during the quarter. Those factors were partially offset by cost savings initiatives and an increase in royalties on franchise sales.

Sbarro was in compliance with all of the covenants under its bank credit agreement at March 28, Carolyn Spatafora, chief financial officer of the company, said during the call.

The company had $16.2 million of cash at quarter-end, she said.

Capital expenditures totaled $2.1 million in the first quarter, which is on track with budgeted capital expenditures for the year. The company plans to fund capital expenditures with operating cash, Spatafora said.

First-quarter revenues were $79.0 million, compared with revenues of $79.6 million for the same period in 2009.

Sbarro is a Melville, N.Y.-based quick service Italian restaurant chain.

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