Finlay’s Filing: “Doubts About Ability to Continue”

Finlay has just filed its 10K. I’m still going through it, but here is a good (and not reassuring) summation of its financial condition:

Our ability to continue as a going concern is dependent on the successful implementation of our strategic plan, the repayment of the amounts due under the Revolving Credit Facility and our ability to secure a new line of credit on or before the maturity date of the Revolving Credit Agreement.  In addition, we experienced a significant operating loss in 2008 and are expected to have an operating loss in 2009. As discussed above, we are in default of certain covenants under the Revolving Credit Agreement.  These uncertainties raise substantial doubt about our ability to continue as a going concern. As such, the independent auditor’s report accompanying our January 31, 2009 financial statements contains an explanatory paragraph regarding these factors, which also constitutes a default under our Revolving Credit Agreement.  If we cannot resolve some or all of these factors, we may be unable to maintain a level of liquidity necessary to continue to operate our business.

 

It also says that Arthur Reiner is an employee “at will” and they expect to have a loss in 2009. It plans to close “approximately half” of its specialty stores in 2009,  which would be (approximately) 54, more than the 40 it announced originally.

JCK News Director