【hikvision plugin not working chrome】Car rental firm Hertz gets more time from lenders to avoid bankruptcy
(Reuters) - Struggling car rental company Hertz Global Holdings Inc said on Tuesday its lenders have extended the deadline for certain loan repayments,hikvision plugin not working chrome giving it more time to come up with a financing plan to avoid a possible bankruptcy.
The deadline has now been extended until May 22, the company said in a filing. The earlier deadline was May 4 and it has been in talks with the lenders after skipping a payment that was due April 27.
Hertz said it will talk to stakeholders to draw up a strategy that would account for the economic impact of COVID-19 pandemic and its cash needs.
The Estero, Florida-based company, whose largest shareholder is billionaire investor Carl Icahn with 38.9% stake as of March 11, is reeling from the impact of the health crisis on global travel.
Last month, it decided to lay off 10,000 employees across its North America operations from a workforce that totaled 38,000 at 2019 end and enlisted restructuring experts to address a cash crunch that made its $17 billion debt potentially unsustainable. [nL4N2C84L9] [nL2N2C32V3] Hertz's preparations for a possible bankruptcy have been accelerating, Reuters reported last week. [nL1N2CH1X9]
Even before the pandemic, Hertz and its peers were under financial pressure as travelers shifted to ride-hailing services such as Uber Technologies Inc.
"In light of the impact of the COVID-19 global pandemic on the travel industry, Hertz believes it will not need to acquire new vehicles for its fleet through the remainder of 2020," Hertz said in the filing https://bit.ly/35z3q49.
"While Hertz has taken aggressive action to eliminate costs, it faces significant ongoing operating expenses."
Shares of Hertz, which fell as much as 22% earlier in the day after a report said the company was preparing for a bankruptcy filing, pared some losses and were down about 14.2% in afternoon trading.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Arun Koyyur)
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- ·5%, led by a 17% increase in average ticket and a slight decline in traffic. Growth in the quarter reflected the impact of households stocking up on essentials like paper goods and cleaning supplies as the pandemic became a nationwide concern, along with strength in discretionary categories as the quarter came to a close and stimulus dollars and tax refunds were disbursed.
As shown below, the results in the quarter materially changed the trend in two-year stacked comps for each of the banners, along with a significant acceleration for consolidated comps.
The increase in consolidated comps was the primary driver of an 8% increase in revenues to $6.3 billion. The company ended the quarter with 15,370 locations, up less than 1% year-over-year. This reflects a 7% increase in Dollar Tree units, offset by a 4% decline in Family Dollar units.
The top-line results at each banner flowed through to their respective income statements, with Dollar Tree gross margins and operating margins declining year-over-year while Family Dollar gross margins and operating margins expanded year-over-year. On a consolidated basis, gross margins contracted by 120 basis points in the quarter to 28.5%, reflective of a shift to lower-margin consumables, tariff costs and the impact of markdowns from the Easter headwinds at the Dollar Tree banner. The company saw slight operating leverage on SG&A from higher comps, with the net result being an 80 basis point contraction in operating margins to 5.8%, with operating income declining 5% to $366 million. This is not adjusted for $73 million of pandemic-related costs, such as PPE supplies.
In the first quarter, the company opened 85 stores (net of closures) and completed 220 Family Dollar renovations to the H2 format. Importantly, comps at renovated Family Dollar stores continue to outpace the chain average by more than 10%. On the call, management indicated that they plan on reducing both the number of new store openings (from 550 to 500) and the number of H2 renovations (from 1,250 to 750) in 2020.
Personally, given the fact that Family Dollar is seeing material benefits to its business from the pandemic with new or lapsed customers coming into its stores, I think the company should try to get more aggressive with its renovation plans, not less. On the other hand, you could argue that renovations cause short-term disruptions and limit their ability to fully capitalize on the business momentum they are currently experiencing.
As a result of fewer new stores and remodels, management now expects 2020 capital expenditures to total $1.0 billion compared to previous guidance of $1.2 billion. In addition, the company has temporarily suspended share repurchases. At quarter's end, the company had $1.8 billion in cash on its balance sheet compared to $4.3 billion in total debt.
Conclusion
In recent years, Dollar Tree has been a tale of two cities. While its namesake banner has generally delivered impressive financial results, Family Dollar has been a persistent underperformer. This quarter, those results flipped, and given what we've seen in the weeks since quarter's end, there's a decent possibility that we will see something similar in the coming months. As the CEO noted, the second quarter is off to a very good start at Family Dollar.
Here's the important question: how useful is that information is in terms of making future predictions about the business? Will recent success at Family Dollar translate into long-term success for the banner? The optimistic take is that new or lapsed customers, especially those visiting the renovated stores, could become recurring business for the banner. The pessimistic take is that they have experienced short-term success out of necessity as people went to any store that was open to try and find essentials like toilet paper and hand sanitizer that were largely out of stock throughout the retail landscape. From that view, many of these customers could abandon the retailer when life returns to normal. As Philbin noted on the conference call, early on [during the pandemic], folks needed us. Will people still shop as much at Family Dollar when it's no longer a necessity?
Personally, I do not place too much weight on the recent results. I will need to see incremental data points that indicate that Family Dollar has truly won sustained business from these new customers. While I still believe that the Dollar Tree banner is a well-positioned retailer with attractive unit returns, I'm not yet willing to say the same thing for Family Dollar. For that reason, along with the recent run-up in the stock price, I plan on staying on the sidelines for now.
Disclosure: None
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