By David Clucas
Performance Sports Group Ltd. has lived to tell the 10K tale another day.
The parent company to the Bauer, Mission and Easton sporting goods brands said September 1 that creditors had granted it a 60-day extension to file its annual 10K report. That gives PSG a new deadline of October 28, 2016.
On August 15, PSG had said it would be unable to file the report by the previous late-August deadline, therefore risking default if an extension couldn’t be granted. Officials said the delay was due to internal financial investigations, and on August 17 also confirmed inquiries by U.S. and Canadian securities regulators.
The extension didn’t come without cost. The company agreed to increase its interest rates by 1.5 percent under its term loan credit facility and by 0.5 percent under its revolving credit facility. PSG also plans to issue “bi-weekly default status reports in the form of news releases” and said its management would be restricted from trading in the company’s securities.
PSG also confirmed, September 1, that its board had formed a special committee of independent directors, which hired Centerview Partners LLC as its independent financial adviser to assist “in the review and evaluation of strategic alternatives and in the company’s ongoing discussions with its lenders.”
That could signal a potential sale of the company. Last week, former PSG Chairman Graeme Roustan said he is weighing a possible bid for the company, hiring Jefferies Group LLC and Canaccord Genuity to explore an offer.
PSG and its brands have faced a myriad of market pressures, including a decline in diamond-sport sales, the lingering effects of recent sporting goods retail bankruptcies and currency exchange-rate pressures.
In mid June, the company hired a new CEO, Harlan Kent, formerly of Yankee Candle, to help right the ship. Kent announced in July that PSG would consolidate its entire baseball/softball category under its existing Easton operations in Thousand Oaks, CA, closing two Combat brand facilities. Then, in early August, he said PSG would reduce its workforce by 15 percent at a severance expense of $2.8 million in the first half of fiscal 2017 for an estimated annualized savings of $5.9 million.
But with the delayed filing, investors have yet to see the full financial picture. PSG last gave a financial update with preliminary fiscal-fourth-quarter results on June 8, at the time of Kent’s hiring. It projected the quarter’s revenue down 10 percent to $133 million and fiscal-year 2016 revenue also down 10 percent to $587 million.
Photo courtesy PSG/Bauer
