NASHVILLE, Tenn., April 4, 2018 /PRNewswire/ -- Gibson Brands (Gibson) today announced that between March 15 and March 28, 2018, Henry Juszkiewicz and David Berryman (together, the "Shareholders") engaged in negotiations with KKR Credit Advisors (US) LLC ("KKR") concerning a potential transaction involving a change of control that would result in the Company being substantially deleveraged through a debt-to-equity conversion pursuant to which the Shareholders would receive some cash and/or warrants. The negotiations concluded on March 28, 2018, as the Shareholders and KKR were significantly divergent in their views regarding the appropriate consideration for the various parties involved.
During these negotiations, in support of the Shareholders' position on illustrative potential future enterprise value for the Company's Musical Instruments / Pro Audio businesses (the "MI Business"), the Shareholders provided KKR with illustrative implied future equity values for the MI Business based on an Adjusted EBITDA range of $60.0-$65.0 million and an assumed EBITDA Multiple of 10.7x.
Gibson said it has contacted and/or is in discussions with other potential investors about refinancing its bonds, when they mature, and other debt and equity investments in the company; however, no guarantee can be made as to the outcome of those discussions.
EBITDA Description
EBITDA and Adjusted EBITDA are supplemental measures of the Company's performance and useful indicators of the Company's ability to incur and service indebtedness that are frequently used by others in evaluating companies in our industry and can assist securities analysts, investors and other parties in their evaluation of us. They are not, however, required by, or presented in accordance with, U.S. generally accepted accounting principles, or U.S. GAAP. Neither EBITDA nor Adjusted EBITDA is a measurement of the Company's financial performance under U.S. GAAP and neither should be considered as an alternative to net income, operating income or any other performance measure derived in accordance with U.S. GAAP or as an alternative to cash flows provided by (used in) operating activities as a measure of the Company's profitability or liquidity. Furthermore, in evaluating these non-U.S. GAAP measures, you should be aware that in the future the Company will incur expenses such as those used in calculating them. The Company's presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or non-recurring items.
EBITDA as used herein represents net income (loss) attributable to the MI Business before interest expense, net, provision for income taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA as further adjusted for the following non-recurring items of revenue or gain and expense or loss: swap impact, casualty loss (recovery), patent lawsuit, restructuring expenses, non-recurring compensation, acquisition expenses, stock-based compensation, excess audit fees and (income) loss from continuing operations, net of tax.
Our EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations. You should compensate for these limitations by relying primarily on our U.S. GAAP results and using these measures supplementally.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. securities laws. Forward-looking statements may include, but are not limited to, statements relating to our outlook and future financial performance, including the illustrative Adjusted EBITDA range described above. In some cases, you can identify forward-looking statements by terminology such as "believes," "anticipates," "plans," "expects," "intends," "estimates," "projects," "should," "will," "may," "would," "contemplates," "aims," "pro forma" and "might," the negative of such terms or other comparable terminology. Forward-looking statements reflect our current views about future events, are based on estimates and assumptions and are subject to known and unknown risks, uncertainties and contingencies. Many important factors could cause actual results or achievements to differ materially from any future results or achievements expressed in or implied by our forward-looking statements, including the factors listed below. Many of the factors that will determine future events or achievements are beyond our ability to control or predict. The Company/s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in the Company's posting, dated April 4. 2018, to its intralinks website that may be accessed by certain persons in accordance with the indenture governing the Company's outstanding debt securities. The forward-looking statements included herein reflect our views and assumptions only as of the date of this press release. You should not place undue reliance on forward-looking statements. We assume no responsibility to update any forward-looking statements and we do not currently intend to provide additional guidance in the future.
ABOUT GIBSON
Gibson Brands, one the fastest-growing companies in the music and sound industries, was founded in 1894 and is headquartered in Nashville, TN. Gibson Brands is a global leader in musical instruments, and consumer and professional audio, and is dedicated to bringing the finest experiences by offering exceptional products with world-recognized brands. Gibson has a portfolio of over 100 well-recognized brand names starting with the number one guitar brand, Gibson. Other brands include: Epiphone, Dobro, Valley Arts, Kramer, Steinberger, Tobias, Slingerland, Maestro, Baldwin, Hamilton, Chickering and Wurlitzer. Audio brands include: KRK Systems, TASCAM, Cakewalk, Cerwin-Vega!, Stanton, Onkyo, Integra, TEAC, TASCAM Professional Software, and Esoteric. All Gibson Brands are dedicated to innovation, prestige and improving the quality of life of our customers.
View original content:http://www.prnewswire.com/news-releases/gibson-brands-shareholderkkr-negotiations-300624694.html
SOURCE Gibson Brands