EDMONTON, May 22 /PRNewswire-FirstCall/ -- Planet Organic Health Corp. ("Planet Organic") Mr. Darren Krissie, Chief Financial Officer of Planet Organic, Canada's leading natural products retailer, provides the following update on its current status with its lenders. As previously announced on March 2, 2009, Planet Organic remains in default of its debt covenants with its senior lenders based on its results for the period ending December 31, 2008. Planet Organic is required to be in compliance with certain covenants measured quarterly under the company's loan agreements. It is also expected that additional covenants will be breached for the quarter ended March 31, 2009. Planet Organic has been in negotiations with its lenders to amend the terms of its existing agreements.
Planet Organic has undertaken a restructuring of its board of directors and senior management team. Effective immediately, Ron Francisco will step aside as President and CEO and be replaced by Darren Krissie, currently vice-president and chief financial officer, and Brent Knudsen, currently a director, who have been appointed to a newly created "Office of the CEO". The Office of the CEO will oversee the company on a day to day basis while the company begins a search for a permanent CEO. Both Mr. Krissie's and Knudsen's long involvement with Planet Organic will ensure the continuity of leadership and the direction of the business. Their primary responsibility will be to lead Planet Organic during this transition, maintain strong financial discipline within the organization, strengthen Planet Organic's balance sheet, and restore the confidence of its shareholders. It is expected that the Office of the CEO will be an interim office and will be in effect for 3-6 months or until a suitable CEO with extensive retail experience has been appointed. The office of the CEO will report directly to the board of directors. Planet Organic is currently interviewing various executive search firms to locate an experienced CEO. Planet Organic wishes to extend its deep gratitude and appreciation to Mr. Francisco for his valuable contributions to the company as President and CEO since 2002. Mr. Krissie says "without Mr. Francisco's guidance and leadership, the company would not be the leading national chain it is today. Ron has been integral in providing the company with the early stage financings that helped catapult Planet Organic from a small retailer with one location in 2001 and generating $1.7M in revenue to the successful chain it is today with revenues of over $120M." Mr. Francisco will remain as a director of Planet Organic.
In addition, Planet Organic has appointed Dan Katz and Mike Arougheti to the board of directors. Mr. Arougheti is President of Ares Capital Corporation (ARCC) and Mr. Katz is Co-head of Portfolio Management at ARCC. Planet Organic also announces that Roy Sangster has resigned from the board of directors to pursue other interests. Planet Organic wishes to express its thanks to Mr. Sangster for his service to the company and wishes him success in his future endeavours.
Although the company has had initial discussions with its lenders to waive certain events of default, any agreement is subject to definitive documentation, which the company expects to complete shortly. To date, all principal and interest payments have continued to be made to the lenders, such that the respective loans are all in good standing up to the date hereof except for the aforementioned covenant defaults. While the outcome of these negotiations is uncertain, management is optimistic that they will be successful based upon the company's relationship with its lenders. In addition to negotiating with its lenders, the company has engaged Partnership Capital Growth ("PCG") as a financial adviser and agent to assist the company in exploring strategic alternatives, including raising additional capital, exploring asset sales to reduce leverage and provide the company with additional liquidity or a teaming agreement with one or more industry partners. Planet Organic has agreed to pay PCG a success fee on the closing of any transaction, calculated as a percentage of the transaction's value.
About Planet Organic Health Corp. ---------------------------------
Planet Organic Health Corp. (TSX-V: POH) is a natural products industry company, comprising manufacturing, distribution and retail. Planet Organic is listed on the TSX Venture Exchange as a Tier One company. Planet Organic operates ten natural food supermarkets throughout Canada under the Planet Organic Market banner and eleven natural food supermarkets in the U.S. under the Mrs Green's Natural Markets banner. The Company also operates 43 natural health outlets under the Sangster's Health Centre banner and eight natural health outlets under the Healthy's and Planet Organic Living banners. Another Planet Organic division, Trophic Canada, is the country's leading manufacturer of natural supplements. The Company has a total of 61 stores throughout Canada and eleven in the U.S. and has more than 650 employees.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. ------------------------------------------------------------------------- Forward-Looking Statements
Certain information included herein is forward-looking. Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy, budgets, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving Planet. Many of these statements can be identified by looking for words such as "believe", "expects", "expected", "will", "intends", "projects", "anticipates", "estimates", "continues", or similar words and include but are not limited to, statements regarding the accretive effects of the acquisition and the anticipated results and expected benefits of the acquisition upon closing thereof. Planet Organic believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties some of which are described in Planet Organic's continuous disclosure documents. Such forward-looking statements necessarily involve known and unknown risks and uncertainties and other factors, which may cause Planet Organic's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities including increases in taxes; changes in environmental and other regulations; and other factors, many of which are beyond the control of Planet Organic. Any forward-looking statements are made as of the date hereof and Planet Organic does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise.
Planet Organic Health Corp.
CONTACT: Planet Organic Health Corp., Darren Krissie, VP Corporate
Development, CFO, (780) 719-4667
