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Non-Tech : Foodmaker (Jack-in-the-Box Restaurants)
FM 27.190.0%Jan 8 4:00 PM EST
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To: Arnie Doolittle who wrote (205)10/1/1997 10:32:00 PM
From: David Kuspa   of 338
 
Moody's raises FM's debt rating again:

"The company is achieving both price and volume increases, due to its successful marketing program and new product introductions. Operating margins have also benefited from increased labor efficiencies
which have more than offset increased food costs. Foodmaker's operating margins are lower than many other large QSR operators since it operates the bulk of the Jack-in-the-Box system, while many of
the other chains franchise a greater proportion of their systems.

But we believe that Foodmaker's restaurant operating margin (15% in the 12 months ended July 1997) is strong for a QSR operator. Foodmaker has reduced its total debt from $442 million at the end of
fiscal 1995 to $347 million (proforma at the end of July 1997) through operating cash flow. The company has indicated that it plans to invest approximately $80 million in fiscal 1998, primarily to open
new restaurants. "

full story at: biz.yahoo.com

Past debt upgrades by Moody's and S&P have resulted in steady rallys after upgrades on 3/6/96 and 7/26/96. The most recent upgrade a few weeks ago on 8/5/97 was followed by a steep downturn, but a rapid recovery back above the $20 level.

D. Kuspa
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