Crocs, Inc. has been thrown a lifeline as it works to turn around a sliding revenue base. The company reported last week that it had obtained an extension for its existing credit facility with Union Bank of California N.A. from a maturity date of April 2, 2009 to September 30, 2009. The amendment includes scheduled principle and interest payments and scheduled reductions in applied interest rate.
As reported previously in Sports Executive Weekly (SEW_0912), CROX had revealed in its recently filed 10-K that that its accounting firm had raised substantial doubt about the companys ability to continue as a going concern. That concern was based in part on the maturity of the credit line and the potential for the company to default on that line.
As of December 31, 2008, the company had $51.6 million in cash and cash equivalents and $22.4 million in borrowings under the revolving credit facility.
“We are pleased with this extension as it provides us the headroom necessary to complete our restructuring plans, realign our operations and refocus the Crocs brand,” said John Duerden, the newly minted president and CEO of Crocs, Inc.
CROX said Union Bank of California N.A. continues to be supportive with its negotiations as the Crocs, Inc. continues negotiations with other financial institutions to arrange longer term financing.
