Logan's Roadhouse executives expect that their commodity costs will rise between 3 percent and 5 percent in their fiscal 2013, which kicked off Aug. 1. That's less than the increase their peers at Cracker Barrel fear but still an important issue. It's also probably more than Logan's CEO Tom Vogel and his team will be able to hike prices given that customer traffic fell almost 5 percent in fiscal 2012.
The private-equity owners of Nashville-based Logan's Roadhouse this week added David Karam to the chain's board of directors. Karam, a longtime Wendy's franchisee, was that company's North American president until November 2011. He also was elected chairman of the Sbarro's board of directors in February of this year.
Nashville-based Logan's Roadhouse and banks JPMorgan and Credit Suisse last week amended the terms of the restaurant chain's $30 million debt agreement to give it more breathing room regarding its debt load. Logan's, which had $395 million in long-term debt — more than 1.6 times its equity — as of late April, can now finish its fiscal 2013 with total debt that is six times its adjusted EBITDA. That's up from 5x before.
Similarly, the company's allowed ratio of operating earnings to interest expenses has come down. In return, the amendment to the two-year-old contract limits Logan's annual capital spending to $35 million in fiscal 2013, down from $60 million. That number will stairstep up back to $55 million by fiscal 2016.
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