Pancho's loses $3.5 million

Nation's Restaurant News, Dec 16, 1991

FORTH WORTH, Texas -- Pancho's Mexican Buffet Inc. has taken $9 million in charges against its 1991 results, creating a loss of $3.5 million for the year.

The company said the charges were twofold. More than $6.4 million involved restructuring costs related to devaluing assets or closing underperforming restaurants. Another $2.7 million was held in reserve to meet any workers' compensation insurance charges for the years before 1991.

For the year ended Sept. 30., revenues rose 3 percent, to $73.6 million.

A year ago the company reported a profit of $3.6 million.

"We are confident that these restructuring charges and reserves will possition the company to return to an orderly growth in sales and earnings," said Hollis Taylor, president and chief executive, in a statement.

For the three months of the period, the company lost $5 million, on a 1-percent gain in revenues, to $19.5 million. In the year-ago quarter, Pancho's posted $910,000 in net income.

The 26-year-old company operates 66 cafeteria-style, TexMex restaurants in seven Southwestern states.