Boardriders Inc

Overview Key strengths Key risks Portfolio of several well-known sports brands including Billabong, Quiksilver, Roxy, and DC Shoes. Near-term maturity of the super senior term loan heightens the company?s refinancing risk. Modest geographic diversification. Unsustainable capital structure with leverage of above 10x (including preferred stock) and negative free operating cash flow (FOCF) generation. Narrow product focus on the niche youth action sports apparel. Small-scale player competing against well-diversified market leaders like Nike Inc., Adidas AG and Under Armour Inc. Vulnerable to changes in consumer discretionary spending levels and retail environment. Boardriders has a super senior term loan, in which the Tranche -A portion of $50 million will become current in October 2022 and mature in October 2023. As this portion

...The company faces refinancing risk over the next 12 months because of an upcoming maturity of the super senior term loan, triggering the asset-based lending (ABL) maturity to spring forward. Boardriders has a super senior term loan, in which the Tranche -A portion of $50 million will become current in October 2022 and mature in October 2023. As this portion of the super senior term loan becomes current, the springing maturity on the company's ABL of $205 million will also be triggered and will accelerate its maturity to 91-days prior to the maturity of any debt outstanding that exceeds $25 million. As of April 30, 2022, the company had $141 million of borrowings under the ABL, with an availability of $51.2 million. The company relies on its ABL to fund its daily operations; therefore, we view the refinancing of the super senior term loan tranche A to be critical and to avoid a broader balance sheet restructuring. If we no longer believe that the company will be able to refinance these maturities,...

Full Report