![]() “The company anticipates cash flow generation will improve in the middle of this year as orders stabilise and excess inventory declines. ![]() “The debt capital injection provides near-term financial flexibility to fund operations and working capital seasonality, particularly during the first quarter of 2023, ahead of the North American fishing season,” added Moody’s. The company has also implemented productivity improvements that include labour cost reduction and production efficiency improvements. Pure Fishing announced changes to its executive management team this month, with its CEO, Harlan Kent, stepping down but remaining on the Board and Dave Allen replacing him. In addition, the company extended the maturity of its ABL revolving facility to March 2026. The company also obtained a $50 million promissory note due until February 2027 to fund working capital and for general corporate purposes. Moody’s noted that in late fiscal 2022 and early 2023, Pure Fishing completed a series of transactions to improve its liquidity, which included entering into a $60 million property loan due October 2024, secured by the company’s North American real estate and provided by its financial sponsors, Sycamore Partners. Since 2021, ongoing cash flow deficits also contributed to higher debt. The company’s debt balance sheet doubled over the past two years due, in part, to having to fund the acquisitions of Plano Synergy in April 2021 and Svendsen Sport in February this year, added the report. In addition, said Moody’s, the elevated level of inventory has negatively impacted reorders. Pure Fishing reported ‘meaningfully lower operating results’ in fiscal 2022, with year-on-year revenue declining 14.6% as persistently high inflation and weakening macro-economic conditions pressurised consumer demand for its product. “We expect that demand and industry headwinds will persist in 2023 and the company has limited financial flexibility to absorb prolonged revenue pressures given its constrained liquidity. “The rating downgrade and negative outlook reflects Pure Fishing’s unsustainable capital structure and the elevated risk of default over the next 12 to 18 months given its very high financial leverage,” said Oliver Alcantara, AVP-Analyst at Moody’s. Moody’s Investment Services lowered Pure Fishing’s Corporate Family Rating – long-term ratings that reflect the likelihood of a default on a corporate family’s debt – and Probability of Default Rating both to Caa2 (very high risk). Steve lives in Toronto with his wife and two children and is a passionate cyclist and endurance athlete.The financial rating of Pure Fishing has been downgraded as sales at the world’s largest supplier of fishing tackle declined by nearly 15% last year. ![]() Steve has also completed the Directors Education Program at the Institute of Corporate Directors at the Rotman School of Management. Steve holds a B.Comm (Honours) from the University of British Columbia and is a past CFA charterholder. Steve started his career at BMO Capital Markets in Vancouver before moving to Toronto to join BMO Nesbitt Burns Equity Partners to begin his private equity career. During his 16-year tenure at OTPP, Steve played lead roles on a number of notable investments, including: Alliance Laundry Systems, Baybridge Senior Housing, BroadStreet Partners, Canada Guaranty Mortgage Insurance Company, Flynn Restaurant Group, GCAN Insurance Company, Heartland Dental, INC Research, NXT Capital, Plano Synergy Holdings and Shearer’s Snacks. Prior to co-founding PCM, Steve was a Managing Director at the Ontario Teacher’s Pension Plan where he led the firm’s Consumer & Healthcare team within Teachers’ Private Capital. Steve currently sits on the boards of 123Dentist, P3 Veterinary Partners, EHN Canada, Glass Lewis, Victoria Park Medispa and Unison Risk Advisors. ![]() He co-leads the operations of the firm with Mike Murray and is a member of the firm’s Investment Committee. ![]() Steve is a Co-Founder and Managing Partner at PCM. ![]()
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