Real Mex Sees Q2 Loss as Sales FallMonday, August 15, 2011
Cypress-based Mexican restaurant chain Real Mex Restaurants Inc. reported another quarterly loss and lower sales from a year ago, declines that come as the company works to restructure its debt.
Real Mex reported a $4.1 million loss for the three months through June, which excludes non-cash impairment charges of about $70 million.
The company lost $1 million for the same period a year earlier.
Real Mex saw revenue fall about 2% from a year earlier to $127.2 million in the second quarter.
Real Mex owns 178 restaurants mostly in California. It has another 30 restaurants that are run by franchisees.
The company operates under various brands, including El Torito, Acapulco and Chevys Fresh Mex along with a few smaller restaurant brands such as Las Brisas in Laguna Beach.
The company also owns a food manufacturing and distribution subsidiary called Real Mex Foods.
Real Mex cited five restaurant closures as part of the reason for the drop in its quarterly sales.
Sales of restaurants open at least a year remained relatively flat, with an increase of less than a 1% in the second quarter.
Last month Real Mex missed an interest payment due July 1. The payment is part of a $130 million bond that's set to mature in 2013.
Real Mex ended up making the $9.2 million interest payment later that month within the allowed 30-day grace period, while announcing its plans to work with lenders to restructure its debt.
“As previously announced, we are actively working with all parties within our capital structure to restructure our corporate capital requirements,” said Real Mex Chief Executive David Goronkin in a statement. “We continue to generate meaningful cash flow from our restaurants and remain current with our obligations. While this is a challenging process, it should ultimately lead to a strong foundation for the future.”
Real Mex is required to prepare a restructuring proposal by Sept. 15 and come to a final agreement with lenders on new debt terms by the end of October.