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Diedrich to Sell Some Outlets to Meet Its Lending Agreement

September 28, 2000|From Dow Jones Newswires

Diedrich Coffee Inc. is planning to sell some of its assets, including some company-operated coffeehouses outside of Southern California, as part of an amended credit agreement with a lender, the Irvine company disclosed Wednesday in its annual report.

The coffeehouse chain said last month that it was in technical violation of its lending arrangement.

Under the amended agreement, Diedrich's lender, Fleet National Bank, will receive 50% of the proceeds from the assets sale, according to the annual report, which was filed with the Securities and Exchange Commission.

The chain also disclosed that it lost $22.4 million, or $1.80 a share, in the fiscal year ended June 28, compared with a loss of $2.6 million, or 43 cents a share, the previous year.

Revenue climbed to $74.5 million from $24.2 million.

Diedrich had warned of heavy losses from closing 39 of its poorly performing Gloria Jean's coffee shops.

The company, which is planning to expand through franchise agreements, said it had terminated franchise arrangements for 50 coffeehouses in the San Diego area and 50 coffeehouses in Kentucky and Tennessee.

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