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Vendor Participation in Friedman's Secured Trade Credit Program
Exceeds $15 Million
Additional $9.5 Million Previously Reserved Under Friedman's Credit Facility
Becomes Available
SAVANNAH, Ga., Oct. 1 /PRNewswire-FirstCall/ -- Friedman's Inc. (OTC:FRDM.PK),
the Value Leader in fine jewelry retailing, today announced that as of
September 27, 2004, it had received vendor agreements under its secured trade
credit program representing more than $15 million in obligations owed by
Friedman's to participating vendors. Under its new amended and restated credit
facility which closed on September 7, 2004, Friedman's had been required to
reserve $9.5 million of availability pending the receipt of vendor agreements
totaling at least $15 million in obligations owed by Friedman's as of July 31,
2004.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020215/FRIEDMANLOGO )
Mr. Sam Cusano, Friedman's CEO, said: "Friedman's recognizes and appreciates
the continued support of our key vendors as we move forward with the Company's
ongoing restructuring efforts. The current level of vendor participation in
Friedman's secured trade credit program, together with the elimination of the
reserve under the new credit facility, helps to ensure adequate liquidity as we
move forward. Still, the delay in shipments and the more prudent credit
policies being implemented by the Company, as well as the impact of the recent
hurricanes, have had an adverse effect on recent sales. I expect this trend
will continue as we work through production and availability of merchandise
issues in obtaining a full assortment of inventory for the upcoming holiday
season. We greatly appreciate the support of our vendors and believe that their
participation in the trade credit program will clearly help Friedman's with its
long-term strategic plan to improve value for all stakeholders."
As previously announced, under the terms of the secured trade credit program,
Friedman's has agreed to grant participating vendors a junior lien to secure
amounts past due to such vendors as of July 31, 2004, and amounts due for new
shipments from participating vendors which are delivered by the earlier of the
duration of a vendor's participation in the trade credit program or December
31, 2005. Friedman's has agreed to repay amounts due to participating vendors
as of July 31, 2004 over a fifteen month period ending on December 31, 2005,
and to repay amounts due for new shipments in the ordinary course of business.
As part of Friedman's ongoing restructuring, the definitive terms for the
Company's secured trade credit program were reached through negotiations
between Friedman's and an informal committee of its largest vendors, which
committee was organized at the Company's request. Mr. Michael Schaffet, Chief
Operating Officer, of M. Fabrikant & Sons, a member of the informal vendor
committee, said: "In light of our long-standing and valued relationship with
Friedman's, we are pleased to have been able to play an instrumental role in
working with Friedman's to restructure its vendor obligations and help resolve
its recent liquidity issues. We look forward to strengthening our relationship
as we work with Friedman's through the upcoming holiday sales season and
beyond."
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. 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: adverse effects
from the Company's delay in paying suppliers and from suppliers not delivering
merchandise; the ability of the Company to comply with the terms of its credit
facility; the continued support of the Company's vendors under its secured
trade credit program; 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 and any recordation of impairment charges; the
results of the SEC and Justice Department investigations and any actions taken
by such governmental authorities; the results of various litigation; 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.
http://www.newscom.com/cgi-bin/prnh/20020215/FRIEDMANLOGO
http://photoarchive.ap.org/
DATASOURCE: Friedman's Inc.
CONTACT: Jane D'Arcy of Trion Communications, +1-401-453-3100, ext. 104
, for Friedman's Inc.
Web site: http://www.friedmans.com/