Gibson is pushing back against reports of an impending bankruptcy and has hired a new chief financial officer, who starts with the company Monday.
Gibson Brands, Inc., maker of the famed Les Paul and ES-335 electric guitars, released a statement saying it has met all “current obligations to the bondholders, is in the process of arranging a new credit facility to replace the bonds, and fully expects the bonds to be refinanced in the ordinary course of business.”
In the statement, Gibson Chairman and Chief Executive Henry Juszkiewicz said: “These bonds expire as all fixed income instruments do at the end of their term.”
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He said also that the company has been working with Jefferies investment bank to manage the refinancing process.
“While the musical instrument and pro audio segments have been profitable and growing, they are still below the level of success we saw several years ago,” Juszkiewicz said.
Also, the Nashville-based company said that Benson Woo will return to Gibson as the company's chief financial officer today.
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Said Juszkiewicz:”We are excited and pleased that Benson with be coming back to the Gibson Brands family. He has a great knowledge of the industry, our current businesses and is liked and respected by everyone at Gibson and with whom he dealt. We are confident he will contribute to moving the company forward.”
Woo had previously served with Gibson in 2016. He replaces Bill Lawrence.
The CEO said that the company is “streamlining” and will focus its Philips brand consumer audio business on those products that have “greater growth potential,” as well as eliminating product segments that fall below expectations.
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While Gibson has been struggling to re-pay debt, an officer with Moody's Investors Service has told the Nashville Post that the company's core guitar business remains sound.
“The core business is a very stable business, and a sustainable one,” Kevin Cassidy, of Moody’s, told the newspaper. “But you have a balance sheet problem and an operational problem.”
Gibson was founded in 1894 and makes musical instruments, and consumer and professional audio. Juszkiewicz acquired Gibson in 1986 with fellow investors. The company has a portfolio of over 100 well-recognized brand names.