- Company Gives Insight Into How It Intends To Leverage its Three
Complementary Business Units, Expanded Business Model and Strong Brand
Portfolio to Accelerate Profitable Growth Across All Channels -
TOPEKA, Kan., Sept. 27 /PRNewswire-FirstCall/ -- Collective Brands,
Inc. (NYSE: PSS), at its first investor conference since its launch and
transformation through the acquisition of The Stride Rite Corporation by
Payless ShoeSource, Inc., provided analysts and investors with additional
detail on its business strategies, unique competitive capabilities and
enhanced financial and operating goals that will drive greater growth than
each company would have achieved standing alone.
"Collective Brands will be more than simply the sum strength of our
business units' individual core competencies, expertise and heritage; we
intend to leverage this exceptional foundation to become the preeminent,
consumer-centric, global footwear, accessories and lifestyle brand
company," said Matthew E. Rubel, chief executive officer and president of
Collective Brands, Inc., at a meeting held today in New York.
The Company provided investors with financial targets it expects to
achieve:
* Excluding the impact of purchase accounting, the acquisition is
expected to be accretive to earnings per share in 2008 as the Stride
Rite unit's earnings contribution is expected to exceed the incremental
interest expense. Due to the impact of purchase accounting, the Stride
Rite acquisition is not expected to be earnings per share accretive in
2008 on a GAAP basis.
* Excluding purchase accounting, the 2006 - 2009 compound annual growth
rate in operating profit is expected to be in the mid-to-upper teens.
Including purchase accounting, the 2006 - 2009 compound annual growth
rate in operating profit is expected to be in the low-teens on a GAAP
basis.
* Cumulative synergies from 2008-2010 in the range of $45 million to $50
million.
* Specific year synergies of $5 million in 2008; $12 million to $15
million in 2009; and $25 million to $30 million in 2010.
* Leverage ratio as defined by lease adjusted total debt/EBITDAR expected
to return to pre-acquisition level by end of 2009, approximating 4.6
times.
Collective Brands hybrid (retail/wholesale/licensing business model) is
expected to drive improvement in:
* Sales growth through world class brand building and consumer centric
focus
* Gross margin by leveraging significant sourcing and manufacturing
benefits
* Capital utilization as its less capital intensive wholesaling business
grows
* Liquidity and cash flow generation in excess of a pure retail model
* Asset efficiency as expected improved working capital productivity
results from leveraging physical distribution network and inventory
management systems
In their individual presentations, the CBI management team outlined
specific initiatives, across each business unit and business discipline,
including marketing, merchandising process and drivers, retail operations,
brand management, licensing, wholesale and supply chain, designed to
capitalize on key industry growth trends and the company's competitive
advantages:
* Well-recognized and growing portfolio of brands
* Hybrid business model with diverse channels to serve customers
* Strong marketplace positioning
* Enhanced international growth opportunities
* Vertically-integrated, highly efficient supply chain
* Effective growth and integration strategies at Stride Rite
* Seasoned management team
All of the presentations made by CBI management are available on the
Company's website at http://www.collectivebrands.com.
About Collective Brands, Inc. and Forward Looking Statements
Collective Brands, Inc. is the holding company of three business units:
Payless ShoeSource, Stride Rite, and Collective Licensing International. At
this time, Collective Brands, Inc. continues to trade under the symbol
(PSS). Payless ShoeSource is the largest specialty family footwear retailer
in the western hemisphere. It is dedicated to democratizing fashion and
design in footwear and accessories and inspiring fun, fashion possibilities
for the family at a great value. Stride Rite markets the leading brand of
high-quality children's shoes in the United States. The unit also markets
products for children and adults under well-known brand names, including
Keds, Sperry Top-Sider, Tommy Hilfiger Footwear, Saucony, and Robeez.
Collective Licensing International is a leading youth lifestyle marketing
and global licensing business. Information about, and links for shopping
on, each of Collective Brands' units can be found at
http://www.collectivebrands.com.
This release contains one or more forward-looking statements. Forward-
looking statements are identified by words such as "will," "expected," and
other similar words. A variety of known and unknown risks and uncertainties
could cause actual results to differ materially from the anticipated
results which include, but are not limited to: the risk that the businesses
will not be integrated successfully or will take longer than anticipated;
the risk that the expected cost savings will not be achieved or unexpected
costs will be incurred; the risk that customers will not be retained or
that disruptions from the transaction will harm relationships with
customers, employees and suppliers; costs and other expenditures in excess
of those projected for environmental investigation and remediation or other
legal proceedings; changes in accounting treatment of any financings;
changes in consumer spending patterns; changes in consumer preferences and
overall economic conditions; the impact of competition and pricing; changes
in weather patterns; the financial condition of the suppliers; changes in
existing or potential duties, tariffs or quotas and the application
thereof; changes in relationships between the United States and foreign
countries; changes in relationships between Canada and foreign countries;
economic and political instability in foreign countries, or restrictive
actions by the governments of foreign countries in which suppliers and
manufacturers from whom we source are located or in which we operate stores
or otherwise do business; fluctuations in currency exchange rates;
availability of suitable store locations on acceptable terms; the ability
to terminate leases on acceptable terms; performance of other parties in
strategic alliances; general economic, business and social conditions in
the countries from which we source products, supplies or have or intend to
open stores; performance of partners in joint ventures; the ability to
comply with local laws in foreign countries; threats or acts of terrorism
or war; strikes, work stoppages and/or slowdowns by unions that play a
significant role in the manufacture, distribution or sale of product;
congestion at major ocean ports; changes in commodity prices such as oil;
and changes in the value of the dollar relative to the Chinese Yuan and
other currencies; changes in intellectual property, customs and/or tax
laws; litigation, including intellectual property and employment
litigation; and the ability to hire and retain associates. In addition,
other risks and uncertainties not presently known to us or that we consider
immaterial could affect the accuracy of our forward-looking statements.
Please refer to the Company's 2006 Annual Report on Form 10-K for the
fiscal year ended 2006 and Form 10-Q for the fiscal quarter ended August 4,
2007 for more information on these and other risk factors that could cause
actual results to differ. Collective Brands does not undertake any
obligation to release publicly any revisions to such forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
SOURCE Collective Brands, Inc.
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Related links:
http://www.collectivebrands.com
CONTACT:
James Grant of Collective Brands, Inc.,
+1-785-559-5321
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