Jackson Hewitt was able to get funding for only 50 percent of its RAL loans, which caused a loss of business as taxpayers went elsewhere. At the end of April, the company was able to make a $25 million principal repayment on a $225 million amortizing term loan and then made another $65 million payment to reduce the $139 million outstanding on a $175 million revolving credit facility.
After the payments, the latter was changed so that $105 million would continue to be a revolving credit facility with the remaining $70 million reclassified as a non-revolving credit commitment. Combined with the $200 million term loan, the tax chain has $375 million in credit.
Jackson Hewitt said the layoffs would cause it to take a $1 million pre-tax severance charge for the fourth quarter ending April 30, but would save $5 million in expenses annually. However, the changed credit terms will produce additional interest expense of $20 million to $25 million for fiscal 2011.
Last modified on Sunday, 02 June 2013