Sbarro, the quick-serve pizza chain owned by MidOcean Partners, could be in trouble with its banks again.
Last quarter, Melville, N.Y.-based Sbarro posted 12-month trailing EBITDA of $41.7 million, which is just $1.7 million shy of breaching covenant agreement with its lenders.
This comes just one year after the company was in noncompliance with its banks over its high debt (currently $336.3 million) but was able to get a waiver and refinance. The refinancing required Sbarro to maintain a minimum 12-month trailing EBITDA of $40 million each quarter. This minimum will rise to $43 million in December, according to regulatory filings.