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Friedman's Comments on Missing December, 2004 Minimum Sales
Covenants and Discussions With Lenders and Vendors
SAVANNAH, Ga., Jan. 4 /PRNewswire-FirstCall/ -- Friedman's Inc. (OTC non-BB:
FRDM.PK), the Value Leader in fine jewelry retailing, today announced that
delayed receipts of inventory shipments during the 2004 holiday season and the
implementation of more prudent credit practices had a negative impact on its
holiday season sales and contributed to the Company not meeting the December,
2004 minimum sales covenants in its credit facility. Friedman's is currently
in discussions with its senior lenders regarding the amendment of its financial
covenants under the credit facility and regarding the terms of other
modifications to the credit facility. There can be no assurances of obtaining
the amendment.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020215/FRIEDMANLOGO )
The Company also said that it has reached agreement with substantially all of
the participating vendors to amend the terms of its secured trade credit
program initiated on September 8, 2004. The amendment modifies the conditions
vendors must meet for continued qualification under the program, including
provisions relating to future shipments by participating vendors to support the
Company's Valentine's Day sales plan. The amendment also revised the schedule
of amortization payments to vendors under the program.
Mr. Sam Cusano, Friedman's CEO, said: "Delays in shipments and the
implementation of more prudent credit practices have clearly had a negative
effect on our holiday season, making it necessary for us to seek amendments to
our secured trade credit program and to our credit facility. Friedman's
appreciates the ongoing support of both our lenders and vendors as the Company
works through the challenges and changes necessary to restore and rebuild
Friedman's."
Additional details regarding the amendment to the trade credit program and any
amendment to the credit facility will be released in Current Reports on Form
8-K to be filed with the SEC. About Friedman's
Founded in 1920, Friedman's Inc. is a leading specialty retailer based in
Savannah, Georgia. The Company is the leading operator of fine jewelry stores
located in power strip centers and regional malls. For more information, go
to: http://www.friedmans.com/ .
Some of the statements included in this press release, particularly those
anticipating future financial performance, business prospects, growth and
operating strategies and similar matters, are forward-looking statements that
involve a number of risks and uncertainties. For those statements, we claim the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are not guarantees of future performance and a variety of factors
could cause the Company's actual results to differ materially from the
anticipated or expected results expressed in these forward-looking statements.
The Company undertakes no obligation to update or revise any such forward-
looking statements. The forward-looking statements, the Company's liquidity,
capital resources, and results of operations are subject to a number of risks
and uncertainties, including but not limited to, the following: the ability of
the Company to comply with the terms of its credit facility; potential adverse
developments with respect to the Company's liquidity and/or results of
operations; competitive pressures from other retailers; trends in the economy
as a whole which may affect consumer confidence and consumer demand for the
types of goods sold by the Company; the ability of the Company to attract,
retain and compensate key executives and associates; the ability of the Company
to attract and retain customers; potential adverse publicity; the ability of
the company to achieve the cost savings and operational benefits projected from
its planned store closings; the final results of the audit including the review
of the calculation of our allowance for doubtful accounts; the results of the
SEC and Justice Department investigations; the results of various litigation;
the effect of the restatement on our credit facilities, including funding
availability there under and our relationship with our lenders; the effect of
the restatement on our future earnings, including any adjustments to previously
announced earnings forecasts; and other risk factors identified from time to
time in our SEC reports, including, but not limited to, the report on Form 10-K
for the year ended September 28, 2002.
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DATASOURCE: Friedman's Inc.
CONTACT: Jane D'Arcy of Trion Communications, +1-401-453-3100, ext. 104, or
, for Friedman's Inc.
Web site: http://www.friedmans.com/