US repair giant Service King has warned its lenders that dwindling cash is casting doubt on its ability to pay debt and continue as a going concern, according to people familiar with the closely held company’s most recent results. (Source Bloomberrg).
The Blackstone Inc. and Carlyle Group Inc.-backed company reported $31 million in cash as of the third quarter after it drew $72 million on its revolving credit facility and maxed out its borrowing availability, said the people, who asked not to be identified because the results were private. The group has 335 sites across the U.S.
The auto collision repair company has seen its earnings drop as less drivers took to the road during the pandemic. It reported a loss of $6 million in adjusted earnings during the third quarter, more than the $5.4 million loss it reported in the same period a year ago and far from the $27 million gain the company reported in 2019, the people said.
Revenue came in at $265 million in the quarter ended Oct. 2, up 27% year-over-year but down roughly 18% from the same period in 2019, the people said.
Service King’s $375 million of 7.875% notes due October 2022 dipped to around 83 cents on the dollar in September but were quoted at par Wednesday, according to Trace data.