Boston Chicken Posts Quarterly Decline

Boston Chicken Inc. posted a $288 million loss in the third quarter, reflecting huge charges stemming from its bankruptcy filing and restructuring.

The restaurant chain, which sells homestyle foods under the Boston Market brand name, filed for bankruptcy Oct. 5.

J. Michael Jenkins, chairman and chief executive, said Friday the Chapter 11 reorganization filing in U.S. Bankruptcy Court triggered a 7 percent to 9 percent decline in customers, which he predicted would continue to affect sales “in the near term.”

In a related development, the Nasdaq Stock Market has set a hearing Nov. 19 to determine whether to delist Boston Chicken’s stock, which has fallen below the required $5 per share minimum. The stock price has hovered around $1 per share in the past month.

The loss for the quarter ended Oct. 4 equaled $3.79 a diluted share, compared with a profit of $11 million, or 16 cents a share, in 1997.

The third-quarter special charges of $260 million included $105.5 million related to restaurant closures and the bankruptcy filing and $110.7 million for the restructuring, under which the company purchased restaurants from developers through a loan conversion program.

Revenues for the quarter rose 57 percent to $261 million from $110.8 million a year ago, reflecting an increase in company-owned restaurants under the restructuring.

Company officials are working to reduce an estimated $900 million in debt by exchanging $627 million in subordinated convertible debentures for equity.