CALABASAS HILLS, Calif.--(BUSINESS WIRE)--
The Cheesecake Factory Incorporated (NASDAQ: CAKE) today announced that
the Company entered into an amendment (“Amendment”) to its revolving
credit facility (“Facility”), taking a proactive step to increase its
financial flexibility in light of the uncertain economic environment.
The five-year Facility, due in 2012, provides for a maximum available
commitment of $300 million. Both the maximum available commitment and
maturity date remain unchanged. As of December 30, 2008, the Company’s
fiscal 2008 year-end, the Company had an outstanding balance of $275
million under the Facility, standby letters of credit of approximately
$16 million and net availability for borrowings of approximately $9.0
million. The Company is currently in the process of completing its
fiscal year-end close and anticipates that it will be in compliance with
the covenants required under the Facility as of December 30, 2008.
Effective January 5, 2009, terms of the Facility were amended to include
the following:
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Financial covenants reset. The leverage ratio (defined as
funded debt to trailing 12-month earnings before interest, taxes,
depreciation, amortization and non-cash stock option compensation
expense, or “EBITDA”) has been reset from a maximum of 2.25 to a
maximum of 1.75 through the end of the Company’s first quarter of
fiscal 2009, and a maximum of 1.50 thereafter.
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The fixed charge coverage ratio (defined as trailing 12-month EBITDA
plus rental expense, or “EBITDAR,” to interest plus rental expense)
has been reset from a minimum of 2.25 to a minimum of 1.90 through
the end of the Company’s third quarter of fiscal 2010, and a minimum
of 2.00 thereafter. The definition of EBITDAR also provides for the
adding back of non-cash stock option compensation expense.
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Pricing grid changed. Under the Amendment, the Company will pay
interest on drawn balances at a rate equal to LIBOR plus a maximum of
2.75%, depending on the Company’s leverage ratio. In addition, the
Company will pay a commitment fee on undrawn balances of a maximum of
0.45%, also depending on its leverage ratio.
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Previously, the Company paid interest rates equal to LIBOR plus a
maximum of 1.00% on drawn balances and commitment fees on undrawn
balances of a maximum of 0.20%, both tied to its leverage ratio.
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Requirements regarding repurchases of common stock. Share
repurchases will be permitted only if the Company has a minimum
liquidity level, based on cash and available capacity on its Facility,
of $125 million and its leverage ratio is less than 1.25.
“We continue to believe that maintaining financial flexibility is both
prudent and appropriate given the state of the economy and its uncertain
outlook,” said David Overton, Chairman and CEO. “In an effort to further
strengthen our financial position, we took the precautionary step of
amending our credit facility. Given our reduced development plans for
fiscal 2009, as well as a healthy level of cash flow that we anticipate
our restaurants will generate next year, we should be well positioned to
increase the amount of cash on our balance sheet and/or reduce our debt
level, both of which we view as favorable options.”
About The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated created the upscale casual dining
segment in 1978 with the introduction of its namesake concept and
continues to define it today with the two highest productivity concepts
in the industry. The Company operates 145 restaurants throughout the
U.S. under The Cheesecake Factory® name with an extensive menu of more
than 200 items and fiscal 2007 average annual unit sales of
approximately $10.4 million. Grand Lux Cafe®, the Company’s second
concept, has 13 units in operation across the U.S. offering a broad menu
of more than 150 items and average annual unit sales of approximately
$12.7 million in fiscal 2007. The Company also operates one unit of its
newest concept, RockSugar Pan Asian Kitchen™, and two bakery production
facilities in Calabasas Hills, CA and Rocky Mount, NC that produce over
60 varieties of quality cheesecakes and other baked products.
Additionally, the Company licenses two bakery cafe outlets to another
foodservice operator under The Cheesecake Factory Bakery Cafe® mark. For
more information, please visit thecheesecakefactory.com.
Safe Harbor Statement
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements in this release are generally identified by
words such as "believes," "anticipates," "plans," "expects," "will," and
"would," and similar expressions that are intended to identify
forward-looking statements. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed
or implied by forward-looking statements. Investors are cautioned that
forward-looking statements are not guarantees of future performance and
that undue reliance should not be placed on such statements. In
particular, the Company’s belief in its ability to maintain financial
flexibility is subject to risks and uncertainties, including national
and regional economic conditions, beyond the Company’s control.
Forward-looking statements speak only as of the dates on which they were
made. The Company undertakes no obligation to publicly update or revise
any forward-looking statements or to make any other forward-looking
statements, whether as a result of new information, future events or
otherwise unless required to do so by the securities laws. Investors are
referred to the full discussion of risks and uncertainties associated
with forward-looking statements and the discussion of risk factors
contained in the Company’s filings with the Securities and Exchange
Commission. These filings are available on a website maintained by the
Securities and Exchange Commission at www.sec.gov.
Source: The Cheesecake Factory Incorporated
The Cheesecake Factory Incorporated
Jill Peters, 818-871-8342
jpeters@thecheesecakefactory.com