Krispy Kreme Doughnuts To Repurchase Up To $50 Mln Of Stock

(RTTNews) - Krispy Kreme Doughnuts Inc. (KKD) announced that its Board of Directors has approved the repurchase of up to $50 million of the Company's common stock, effective immediately. The company also announced that it has refinanced its secured credit facilities and retired in full the $22 million outstanding balance of its term loan.

As of July 12, 2013, the Company had approximately 66 million shares outstanding.

As previously announced, the Company forecasts generating adjusted net income for fiscal 2014, ending February 2, 2014, in the range of $42 to $45 million. Cash provided by operating activities is forecasted to be in the range of $63 to $66 million.

On July 12, 2013, the Company refinanced its secured credit facilities. In connection with the refinancing, the Company retired in full the $22 million balance of its term loan and increased the size of its revolving credit commitments from $25 million to $40 million.

The refinancing and the retirement of the term loan are expected to result in a decrease in interest expense of approximately $1 million in the first twelve months following the transaction, principally reflecting the elimination of interest on the term loan, lower costs for outstanding letters of credit, and elimination of the amortization of the cost of an interest rate hedge and the amortization of deferred financing costs related to the retired term loan.

The company said it expects to record a non-cash charge resulting from the transaction of approximately $1 million in the second quarter, consisting principally of the write-off of the deferred financing costs related to the retired term loan and the termination of a related interest rate hedge.

As of July 12, 2013, there were no borrowings outstanding under the revolving facility; the only current utilization of such facility was to support outstanding undrawn letters of credit of approximately $9 million related to the Company's self-insurance programs, Krispy Kreme said.