Whataburger Posts 10% Earnings Rise, Seeks $2.72 Billion Loan

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Or sign-in if you have an account.(Bloomberg) — Privately owned fast-food chain Whataburger said earnings in the first quarter rose 10% from a year ago, even as concerns mount that higher energy costs will weigh on consumer spending and drag sales lower.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountTexas-based Whataburger, which is looking to raise a $2.72 billion term loan to refinance debt, shared the numbers with investors this week, according to people familiar with the matter.Whataburger reported earnings before interest, taxes, depreciation and amortization of $145 million for the first quarter, up from $132 million in the same period last year. It posted revenues of about $930 million, rising from roughly $900 million a year ago, the people said, asking not to be identified as the details are private. The company, known for its white and orange restaurants and hefty, 5-inch burgers, reported leverage of about five times earnings.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againS&P Global Ratings said it expects Whataburger’s same-store sales to decline in the near term, “as ongoing consumer budgetary pressures weigh on both its visitation frequency and average order size.” It also flagged elevated beef prices as a drag on margins. However, the ratings firm said a loyal customer base in Texas and a new cheaper menu should help comparable sales to “turn modestly positive” in the next two years.Whataburger, backed by BDT & MSD Partners, posted more than $60 million of free cash flow in the 12 months ended March 31, the people said. Representatives for Whataburger and BDT & MSD Partners declined to comment.BDT & MSD Partners bought a majority stake in the company in 2019 to help expand the fast-food chain, which opened its first location in 1950.The burger chain’s latest loan deal is being offered to investors at 2.75-3 percentage points above the Secured Overnight Financing Rate. This could decrease if the company reduces its overall leverage or conducts an initial public offering. Currently, Whataburger is paying 2.5 percentage points over the benchmark for its existing loan due in 2028. Lenders have until Thursday to commit to the new deal. S&P assigned a B rating – five notches below investment grade – to the business.The company will use the net proceeds of its debt raising to repurchase debt maturing in 2028 and to pay fees and expenses.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.