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Weber’s Receivables No Longer Wanted

Grill maker also expects trouble in remaining compliant with its debt covenants.

August 20, 2022

Outdoor cooking products maker Weber (WEBR) is not providing investors with any detail regarding a sudden change in appetite for its trade receivables. The company has an agreement with a third party financial institution for the purchase of up to $235 million of its receivables.

But in its latest quarterly filing, Weber inserted new language suggesting its receivables are no longer desired:

“As of June 30, 2022, the third party under the Receivables Purchase Agreement informed the Company that, as permitted by the terms of the agreement, it will not be purchasing trade accounts receivable for an unspecified period of time. There can be no assurance that the third party will begin purchasing trade accounts receivable in the near term, or at all.”

Weber burnt through $242.8 million in operating cash flow in the quarter. The receivables sold in the latest period are included in the company’s operating cash flows. Unless the third party financial institution has a change of heart, the impact will manifest itself on future period operating cash flows and working capital.

The company also warned it expects trouble in remaining compliant with the covenants in its Secured Credit Facility. Weber says its cutting costs, employees, and suspended its dividend in an effort not to violate its debt covenants.


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