KANSAS CITY, Mo., June 4 /PRNewswire/ -- Payless Cashways, Inc.
(OTC Bulletin Board: PCSH), a full-line building materials and finishing
products company focusing on the professional builder, remodel and repair
contractor, institutional buyer, and project-oriented consumer, today
announced it filed a petition for voluntary reorganization of its operations
under Chapter 11 with the U.S. Bankruptcy Court for the Western District of
Missouri.
An unusually harsh winter and poor 2001 economic conditions resulted in
disappointing sales and cash flow for the highly leveraged company.
Additionally, the company's asset based lenders have continued to constrict
credit, thereby reducing cash availability under the company's current
agreement. Late vendor payments and increased "out-of-stocks" in the stores
contributed to further sales declines, and necessitated this filing to make
cash flow available for vendor payments.
Millard Barron, President and CEO commented, "We are extremely
disappointed that we had to take this step. However, this convergence of
negative factors forced us to take this drastic action on behalf of our
customers. Our organization and our customers have been frustrated by the
slow replenishment of merchandise at this important time of year. Our
customers deserve the best service we can provide."
Mr. Barron continued, "Over the last 3 1/2 years, we have made significant
progress. Through the fall of 2000, our team delivered 10 consecutive
quarters of improved EBITDA. We have also reduced our overall debt levels by
over $120 million or approximately 30% in this same time period. We have a
great core of employees and stores, and a real franchise relationship with our
customers. We will continue to focus on our vision, and develop our business
and profit models. With these actions, simply having use of the revenues we
generate daily will enable us to pay for all new merchandise delivered on a
priority basis. Also, we are currently in negotiations with multiple
potential lenders, and expect to quickly have additional DIP funding in place.
I look forward to a timely and efficient reorganization process, and a
successful emergence as a profitable company with a healthy balance sheet."
Payless Cashways is a full-line building materials specialty retailer that
concentrates on professional builders, contractors and project-oriented
customers. The company operates 110 retail stores, five PCI Builders Resource
stores and one Contractor Supply store throughout 16 states. The chain
operates under the names Payless Cashways, Furrow, Hugh M. Wood, Lumberjack,
Knox Lumber, PCI Builders Resource and Contractor Supply. The company also
owns six manufacturing plants.
This paragraph is included in this release in order to comply with the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. There are certain important factors that could cause results to differ
materially from those anticipated by the forward-looking statements made
above. Investors are cautioned that all forward-looking statements involve
risk and uncertainty. Among the factors that could cause different results
are: the need for bankruptcy court approvals, access to cash collateral, the
adequacy of and compliance with the debtor-in-possession financing, stability
of customer demand and supplier support, the many uncertainties involved in
operating a business in a chapter 11 bankruptcy environment, consumer spending
and debt levels, interest rates, housing activity, lumber prices, product mix,
growth of certain market segments, competitor activities, and an excess of
retail space devoted to the sale of building materials. Additional
information concerning those and other factors is contained in the company's
SEC filings, copies of which are available from the company without charge.
The filings may also be obtained from the company's Web site,
payless.cashways.com .
SOURCE Payless Cashways, Inc.
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Related links:
http://www.payless.cashways.com
CONTACT:
Marla Holbert of Payless Cashways,
816-347-6771, or mholbert@payless.cashways.com
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