Bank of America, GE Capital Commit to Providing Increased Borrowing Capacity
SAN FRANCISCO, Sept. 9 /PRNewswire/ -- The Good Guys! (Nasdaq: GGUY), a
leading specialty retailer of consumer entertainment electronics, today
announced that it has received a commitment for a three-year $100 million
credit facility from Bank of America and GE Capital. Subject to the
completion of certain customary conditions by The Good Guys!, the new facility
is expected to be effective October 1 and will replace an existing agreement
with another lender and will offer lower interest rates and more favorable
terms.
The new credit facility will raise The Good Guys! borrowing capacity by
approximately 33 percent, significantly increasing the company's inventory
purchasing power. This increase in working capital will enable The Good Guys!
to optimize product purchases and vendor discounts as the company shifts its
inventory to focus exclusively on consumer entertainment electronics, with an
emphasis on digital and high-tech products.
"An endorsement of this magnitude from two premier financial institutions
enhances our ability to secure more favorable vendor terms and, as a result,
will strengthen our financial performance and accelerate our return to
profitability," said Ronald A. Unkefer, founder, chairman and CEO of The Good
Guys!.
The expanded borrowing agreement is the latest in a series of initiatives
launched by Unkefer since his return to The Good Guys! on July 1, 1999. In
July, the company began implementing measures to reduce annual general and
administrative costs by 20 percent, or $8 million. The company is also
reducing store and other operating expenses by approximately $7.5 million a
year. The Good Guys! expects these steps, combined with other efforts, will
enable it to be profitable in early fiscal 2000. In addition, The Good Guys!
recently announced the completion of a $16.25 million private placement to
improve liquidity, accelerate the shift in the company's product mix and
restructure internal operations.
"The implementation of our business strategy is progressing on an
aggressive schedule. We are committed to providing a compelling and
competitively priced selection of entertainment electronics products and
services that meet the demands of early adopters of technology, product-savvy
consumers and our large base of middle- and upper-income customers," said
Unkefer. "We will continue to work closely with the leading manufacturers in
our industry to ensure that The Good Guys! stores offer the most advanced
products on the market."
The Good Guys! is a leading specialty retailer of consumer entertainment
electronics, operating a total of 79 stores in California, Washington, Oregon
and Nevada, and marketing a broad range of high quality, name brand products
and related services. For more information on The Good Guys!, including news
releases, product information and store locations, visit http://www.thegoodguys.com.
To the extent this news release contains forward-looking statements, such
statements are subject to risks and uncertainties, including, but not limited
to the Company's current restructuring program, increases in promotional
activities of competitors, changes in consumer buying attitudes, the presence
or absence of new products or product features in the Company's merchandise
categories, changes in vendor support for advertising and promotional
programs, changes in the Company's merchandise sales mix, the possibility that
conditions to the commitment for the new credit facility mentioned in this
news release will not be satisfied and the facility will not be provided, and
economic conditions.
SOURCE The Good Guys!
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Related links:
http://www.thegoodguys.com
Company News On-Call:
http://www.prnewswire.com/comp/108403.html or fax,
800-758-5804, ext. 108403
CONTACT:
Kristen Malacarne of The Good Guys!,
214-665-1335, or pager, 888-613-2159
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