Outdoor financials: Eddie Bauer shares drop 50 percent on bankruptcy rumors, plus Quiksilver, Cabela's, Forzani

Eddie Bauer shares dropped 50 percent on bankruptcy rumors, Quiksilver shares fell on analyst concerns over high-cost loans, the chairman of Cabela's arranged estate planning distributions, and Forzani narrowed its Q1 loss.

Eddie Bauer shares drop 50 percent on bankruptcy rumors

Shares of Eddie Bauer Holdings (Nasdaq: EBHI) plunged 50 percent, falling $0.25 to close at $0.24, as rumors flew about a potential bankruptcy announcement.

Various reports, including articles from Bloomberg News and the Wall Street Journal, cited five unidentified sources saying that the company may file for bankruptcy protection as early as this week.

According to published reports, a final decision on bankruptcy hasn't been made and those expressing an interest in the company's assets include Hilco Consumer Capital LLC of Toronto, Canada, CCMP Capital Advisors LLC of New York, and Gordon Brothers Group of Boston.

Last month, Eddie Bauer reported a first-quarter loss of $44.5 million, or $1.44 per share, and total revenues for the quarter fell to $179.8 million from $213.2 million in 2008.

Quiksilver shares fall on analyst concerns over high-cost loans

Shares of Quiksilver (NYSE: ZQK) dropped more than 18 percent on June 10 as analysts expressed concerns about the company's near-term prospects after it took new loans at higher interest rates.

"We view progress on the refinancing of the business as a positive and see a light at the end of the tunnel for near-term liquidity concerns. The cost of financing, however, is daunting," wrote Thomas Weisel Partners analyst Jim Duffy in a client note.

Quiksilver is taking $150 million over five years from Rhone, a private-equity firm, and has secured a $200 million credit facility.

Duffy wrote that the $150 million loan comes with a 15-percent interest rate and gives the private-equity firm warrants for 20 percent of the shares priced at $1.86. He added interest payments are expected to cost the company $110 million per year. Thomas Weisel Partners suspended its rating on Quiksilver shares until the company finishes all refinancing.

Its shares fell $0.71 to close at $2.91 on June 10.

Cabela's chairman arranges estate planning distributions

Cabela's (NYSE: CAB) said Chairman Richard N. Cabela has adopted a pre-arranged stock trading plan to sell a small portion of the approximately 9.6 million shares of Cabela's common stock that he owns. Under the stock trading plan, a Cabela family trust will make 12 consecutive monthly sales of 1,000 shares of Cabela's common stock as part of his personal financial and estate planning.

The company added that he intends to cause certain Cabela family trusts to make 12 consecutive monthly distributions of 9,000 shares of Cabela's common stock to his children as part of his personal estate planning.

The stock trading plan sales and anticipated estate planning distributions will reduce the chairman's beneficial ownership of Cabela's common stock by 120,000 shares -- about 1.25 percent of the shares he owns.

Forzani narrows Q1 loss

Canadian sporting goods dealer Forzani Group (TSX: FGL) said it posted a smaller first-quarter loss as it dealt with weak consumer confidence. Its shareholders also voted all of Forzani's board candidates in.

For the quarter ended May 3, the company reported a loss of CDN $1.1 million (USD $991,447), or CDN 0.04 a share (USD $0.03), versus a loss of CDN $2.8 million (USD $2.5 million), or CDN 0.09 a share (USD $0.08), for the same period last year.

Revenue was flat at CDN $307.7 million (USD $277.3 million), compared with CDN $307.5 million (USD $277.1 million) in the year-before quarter.

Same-store sales rose 1 percent at corporate stores, but fell 2.8 percent at franchise locations.

Quarterly gross margin was 33.7 percent of revenue, compared with 34.3 percent a year earlier.

Also, Forzani said its shareholders have elected all eight of the company's nominees for the board of directors despite a proxy contest initiated by dissident New York hedge fund Crescendo Partners.

The company said it had 30.5 million shares eligible to vote. Based on preliminary information, approximately 28.0 million shares were voted, representing 92 percent of the eligible shares.

Earlier this year, the company said it planned to boost sales by 10 percent a year and earnings per share by 20 percent a year over the next five years as it reduces the number of retail chains it operates.

Forzani retail stores include Sport Chek, Fitness Source, Coast Mountain Sports and Sport Mart.

(Conversion of Canadian dollars into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of June 10.)

--Compiled by Wendy Geister

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