Aug. 23, 2004
ANN ARBOR, Mich. — Domino's Pizza announced in a news release that it paid off $109.1 million of its $908 million in debt on Aug. 16.
In a regulatory filing prior to its July initial public offering, Domino's anticipated paying off $125 million with its IPO proceeds.
Harry Silverman, executive vice president and CFO of the 7,530-unit chain said the reduced debt will lower its interest expenses by $9 million annually and reduce its leverage ratio to below four times EBITDA (earnings before interest, taxes, depreciation and amortization).
"Although our strong and stable cash flow enables us to operate at much higher debt levels, we felt this de-leveraging activity was an appropriate strategy for our newly public company," Silverman said in the release.
The pay-down led Moody's Investors Service to upgrade Domino's subordinated debt credit rating from "B3" to "B2." Standard & Poor's, who currently has a B- rating on Domino's senior subordinated notes, also changed the company's outlook from "stable" to "positive."