Huffy Corporation has finalized the sale of its services to retail segment, which includes Huffy Service Solutions, Creative Retail Services, and Creative Retail Services (Canada) to National Product Services Inc., a portfolio company of H.I.G. Capital, LLC. Proceeds from the sale will be used to reduce debt and to fund working capital requirements.
Commenting on the sale of Huffy Service Solutions, Paul R. D'Aloia, Chief Executive Officer and President said, “As mentioned in the earlier announcement of the pending sale of Huffy Service Solutions, as a result of an on-going review of our business and product lines, we concluded that Huffy Service Solutions was not a key strategic component as we move to a single sporting goods platform. We are pleased that National Product Services has recognized the value of Huffy Service Solutions and the benefit of combining two premium services to retail companies.”
D'Aloia continued, “With the divestiture of Huffy Service Solutions and the previously announced divestiture of the Gen-X Opportunity business, Huffy has reconfigured its business portfolio to a focused sporting goods platform delivering branded sporting goods and related products into the mass, sporting goods and specialty channels, under such well-known brands as Huffy(R), Tommy Armour(R), RAM(R), UltraWheels(R), Lamar(R), Hydra-Rib(R), and premiere licenses such NBA(R), NCAA(R), Sims(R), and Disney Princess(R).”
Robert W. Lafferty, Vice President and Chief Financial Officer commented, “We continue to evaluate the appropriate valuation for certain intangible assets as well as the appropriate accounting treatment for expenses and reserve requirements identified during the first quarter. The transition to a single business platform is continuing, but as previously announced will not improve operational results until the fourth quarter of 2004, and our view that Huffy will not return to profitability in 2004 remains unchanged. We have also finalized arrangements with our lenders that modify our loan covenants to allow the Company to execute a sale of all, or of product segments within, the Company and allow a portion of the Huffy Service Solutions sale proceeds to be used to fund on-going operations.
