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Krispy Kreme Gets Default Extension on Credit Facility
WINSTON-SALEM, N.C. -- Lenders under Krispy Kreme Doughnuts Inc.'s Credit Facility have agreed to defer until March 25 the date on which an event of default would occur by reason of the company's failure to deliver financial statements for the quarter ended Oct. 31, 2004, company officials announced earlier today.On Jan. 4, Krispy Kreme -- which has a store in Boardman, Ohio -- notified the Securities and Exchange Commission that previously issued financial statements for the fiscal year ended Feb. 1, 2004, should be restated to correct "certain errors" after company directors concluded on Dec. 28, 2004, that the previous statements were not reliable.Restatement of the financial statements to reflect six principal adjustments and other minor adjustments are expected to reduce net income for fiscal 2004 by between approximately $3.8 million and $4.9 million and net income for the fiscal 2004 second, third and fourth quarters by approximately $0.3 million, approximately $0.3 million and between approximately $3.2 million and $4.3 million, respectively.At that time, officials cited the need to restate financial statements for the first and second quarters of fiscal 2005, though they did not expect those results to be materially affected by the restatement.Officials also said today the company has agreed to certain amendments to its Credit Facility. These amendments provide for a limitation on the issuance, extension and renewal of letters of credit without lender consent, a limitation on additional revolving credit or swing loan borrowings without lender consent and a limitation on the creation of guarantees in respect of debt incurred by the company's joint ventures, whether or not the current financial statements are delivered.Founded in 1937, Krispy Kreme currently operates 435 stores (399 factory stores and 36 satellites) in 45 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United KingdomVisit Krispy Kreme Doughnuts Inc.: www.krispykreme.com"