Foodmaker Loses $4.5 Million

Foodmaker, operator and franchiser of Jack in the Box fast-food and Chi-Chi’s Mexican restaurants, linked a $4.5-million net loss in the third quarter ended July 3 to a voluntary debt restructuring that caused a $10.3-million extraordinary after-tax charge.

The company also reported a $3.3-million net profit for the 40-week period ended July 3.

“We took this opportunity to lock in our debt at lower interest rates,” said Charles W. Duddles, Foodmaker senior vice president.

Foodmaker used proceeds of a recent $300-million public bond offering to prepay its existing debt, as well as debt that was incurred during the acquisition of Chi-Chi’s. It also retired several industrial revenue bonds Chi-Chi’s had carried before the acquisition.

The new financing is spread over 10 years and carries a lower interest rate, according to Duddles.

“That gives us more options on what we can do in the future,” said Duddles, who declined to describe the savings resulting from the debt restructuring.

Revenue rose by 72%, to $209 million from $121 million during the comparable period a year earlier. Revenue rose by 29%, to $502 million, for the 40-week period ended July 3, from $388 million the year before.

Average sales for company-owned restaurants rose by 9.6% over the same quarter a year ago.