Wolverine World Wide, Inc. (NYSE: WWW) (the “Company”) today
provided an update on actions it has taken to increase its
liquidity and the flexibility of its capital structure, primarily
through the amendment of its Senior Credit Facility, including $171
million in aggregate principal amount of incremental 364-day term
loans and the sale of $300 million of 6.375% Senior Notes due 2025
(the “Notes”).
The Company implemented several measures earlier this year to
prioritize liquidity, cash preservation, and asset management in
response to the impact of the COVID-19 pandemic. These
measures included drawing down the remainder of its revolving
credit line, reducing planned inventory receipts, postponing
certain capital expenditures, suspending further share repurchases,
and reducing planned operating expenses by an estimated $100
million for the remainder of 2020. The Company continues to
expect these cash preservation initiatives to exceed $500 million,
positioning the Company to deliver $150 million to $200 million of
operating cash flow in 2020.
The amendment to the Senior Credit Facility provides enhanced
flexibility within the Company’s existing covenant requirements,
while the sale of the Notes provides longer-term financing.
The Company is using the net proceeds from the new
incremental term loans and Notes offering primarily to repay
borrowings under its revolving credit facility, adding borrowing
capacity if needed for future operations.
“With these actions, the Company’s total liquidity, including
cash and available borrowing on the revolver, increased to
approximately $940 million, up from $483 million at the end of the
first quarter of 2020,” said Mike Stornant, Senior Vice President
and Chief Financial Officer. “Our agile business model and
lean fixed cost structure remain a key advantage in this
environment, and our investment in eCommerce continues to drive
accelerated, profitable growth in that channel. Given our
anticipated strong positive operating cash flow in 2020 combined
with increased liquidity from these recent actions, we are
confident in the Company’s ability to navigate the current
environment and take advantage of the opportunities that will
emerge.” This press release contains forward-looking statements,
including statements regarding the Company’s cash preservation
initiatives, operating cash flow in 2020 and use of proceeds of the
incremental term loans and Notes offering. In addition, words
such as "estimates," "anticipates," "believes," "forecasts,"
"step," "plans," "predicts," "focused," "projects," "outlook," "is
likely," "expects," "intends," "should," "will," "confident,"
variations of such words, and similar expressions are intended to
identify forward-looking statements. These statements are not
guarantees of future performance and involve certain risks,
uncertainties, and assumptions ("Risk Factors") that are difficult
to predict with regard to timing, extent, likelihood, and degree of
occurrence. Risk Factors include, among others: the effects of the
COVID-19 pandemic on the Company’s business, operations, financial
results and liquidity, including the duration and magnitude of such
effects, which will depend on numerous evolving factors that the
Company cannot currently accurately predict or assess, including:
the duration and scope of the pandemic; the negative impact on
global and regional markets, economies and economic activity,
including the duration and magnitude of its impact on unemployment
rates and consumer discretionary spending and levels of consumer
confidence; actions governments, businesses and individuals take in
response to the pandemic; the effects of the pandemic, including
all of the foregoing, on the Company's distributors, suppliers,
joint venture partners and other counterparties, and how quickly
economies and demand for the Company’s products recover after the
pandemic subsides; changes in general economic conditions,
employment rates, business conditions, interest rates, tax policies
and other factors affecting consumer spending in the markets and
regions in which the Company’s products are sold; the inability for
any reason to effectively compete in global footwear, apparel and
consumer-direct markets; the inability to maintain positive brand
images and anticipate, understand and respond to changing footwear
and apparel trends and consumer preferences; the inability to
effectively manage inventory levels; increases or changes in
duties, tariffs, quotas or applicable assessments in countries of
import and export; foreign currency exchange rate fluctuations;
currency restrictions; capacity constraints, production
disruptions, quality issues, price increases or other risks
associated with foreign sourcing; the cost and availability of raw
materials, inventories, services and labor for contract
manufacturers; labor disruptions; changes in relationships with,
including the loss of, significant wholesale customers; risks
related to the significant investment in, and performance of, the
Company’s consumer-direct operations; risks related to expansion
into new markets and complementary product categories; the impact
of seasonality and unpredictable weather conditions; changes in
general economic conditions and/or the credit markets on the
Company’s distributors, suppliers and retailers; increases in the
Company’s effective tax rates; failure of licensees or distributors
to meet planned annual sales goals or to make timely payments to
the Company; the risks of doing business in developing countries,
and politically or economically volatile areas; the ability to
secure and protect owned intellectual property or use licensed
intellectual property; the impact of regulation, regulatory and
legal proceedings and legal compliance risks, including compliance
with federal, state and local laws and regulations relating to the
protection of the environment, environmental remediation and other
related costs, and litigation or other legal proceedings relating
to the protection of the environment or environmental effects on
human health; the potential breach of the Company’s databases or
other systems, or those of its vendors, which contain certain
personal information, payment card data or proprietary information,
due to cyberattack or other similar event; problems affecting the
Company’s distribution system, including service interruptions at
shipping and receiving ports; strategic actions, including new
initiatives and ventures, acquisitions and dispositions, and the
Company’s success in integrating acquired businesses, and
implementing new initiatives and ventures; the risk of impairment
to goodwill and other intangibles; changes in future pension
funding requirements and pension expenses; and additional factors
discussed in the Company’s reports filed with the Securities and
Exchange Commission and exhibits thereto. The foregoing Risk
Factors, as well as other existing Risk Factors and new Risk
Factors that emerge from time to time, may cause actual results to
differ materially from those contained in any forward-looking
statements. Given these or other risks and uncertainties, investors
should not place undue reliance on forward-looking statements as a
prediction of actual results. Furthermore, the Company
undertakes no obligation to update, amend, or clarify
forward-looking statements.
ABOUT WOLVERINE WORLDWIDEWith a commitment to
service and product excellence, Wolverine World Wide, Inc. is one
of the world’s leading marketers and licensors of branded casual,
active lifestyle, work, outdoor sport, athletic, children’s and
uniform footwear and apparel. The Company’s portfolio of highly
recognized brands includes: Merrell®, Sperry®, Hush Puppies®,
Saucony®, Wolverine®, Keds®, Stride Rite®, Chaco®, Bates® and
HYTEST®. The Company also is the global footwear licensee of the
popular brands Cat® and Harley-Davidson®. The Company’s products
are carried by leading retailers in the U.S. and globally in
approximately 170 countries and territories. For additional
information, please visit our website,
www.wolverineworldwide.com.
CONTACT: Mike
Stornant(616) 866-5728
Wolverine World Wide (NYSE:WWW)
Historical Stock Chart
From Mar 2024 to Apr 2024
Wolverine World Wide (NYSE:WWW)
Historical Stock Chart
From Apr 2023 to Apr 2024