Burger King Holdings
Altman Z-Score, Current: 2.38
Altman Z-Score, 2009: 2.38
Burger King Holdings (BKC) is a well-known household name that would likely break many Whopper-loving hearts if it were to go bankrupt. The "have it your way" burger-and-fries chain's Z-Score came in at 2.38 for the trailing-12 months, flat from the previous year, indicating its standing isn't getting any worse, but it's also not getting any better.Burger King has been in talks with private-equity firms in recent weeks about a possible sale. The status of the talks is unclear but one interested firm was 3i Group, a British private-equity firm. Burger King, a public company since 2006, has been in the hands of private equity before. In 2002, a group led by TPG Capital, Bain Capital and Goldman Sachs (GS) Capital Partners bought Burger King for about $1.5 billion from Diageo (DEO). The firms still own nearly 32% of Burger King, and have significant representation on the board. Last week two analysts cut their ratings and reduced their price targets on Burger King shares, citing concerns regarding the company's full-year costs and sales. Burger King recently posted better-than-expected fourth-quarter profits of $49 million, or 36 cents per share, though results were sharply lower than year-earlier results, likely due to stubbornly high rates of young, jobless males in the U.S. Global comps fell 0.7%, with comps at U.S. and Canadian locations down 1.5%. UBS (UBS) analyst David Palmer said Burger King's performance in fiscal 2011 "will depend largely on the net impact of the U.S. breakfast rollout." Year-over-year comparisons will be more difficult because 2010 sales were also boosted by the launch of the $1 double cheeseburger. Burger King plans to launch an enhanced breakfast platform this fall in U.S. and Canadian locations that will include new menu products and Seattle's Best Coffee in an effort to better compete with McDonald's (MCD) and Starbucks (SBUX).
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