In a statement released Wednesday lunchtime, Wahoo Fitness says it has found a way to eliminate all of its debt.
Shared via press release, the statement claims that the brand has "fully recapitalised its business" courtesy of "significant equity support from new and current investors."
The move comes just a month after the company's credit rating was downgraded to 'D' — described by S&P as "Payment default on a financial commitment or breach of an imputed promise; also used when a bankruptcy petition has been filed" — after defaulting on a payment; its third successive credit rating downgrade in less than 18 months.
Interestingly, the terms of the arrangement are being kept confidential, so it's unclear exactly how Wahoo has achieved this feat. Whether it has sold off shares or followed in Rapha's recent footsteps by partaking in a debt-for-equity exchange is, unfortunately, between Wahoo and its creditors.
However, the brand claims the newfound financial position now readies the business for "innovation and growth," and to extend its "prominence in advancing innovation in the global smart fitness and training category."
At the time of that recent credit-rating downgrade, the overarching trend among investment advisors' analysis was that, while Wahoo would require restructuring, the brand position and its product lineup was strong enough for the company to survive. American advisor Moody's stated "Wahoo benefits from its strong market position in the cycling and smart fitness products market, supported by its good brand recognition, product innovation, and high product quality."
This is a sentiment echoed today by the brand's founder, Chip Hawkins: “The investment from both new and existing investors is a clear sign of confidence in the strength of Wahoo. Specifically our team, brand, strategy, and powerful ecosystem of innovative products, software, and services."
As for the future, CEO Mike Saturnia added that the "successful recapitalisation of the business provides the flexibility we were seeking as a management team to allow for investment in innovation and growth from the company’s substantial base and category leadership position," adding that the brand now has a renewed focus on "delighting its customers".
