Item 8.01Other Events.
School Specialty, Inc. (the "Company") is providing the following update on the
filing of its Annual Report on Form 10-K for the fiscal year ended December 28,
2019 (the "Report"). The Company has determined to rely on the Securities and
Exchange Commission's Order under Section 36 of the Securities Exchange Act of
1934 Modifying Exemptions from the Reporting and Proxy Delivery Requirements for
Public Companies dated March 25, 2020 (Release No. 34-88465) (the "Order") to
delay the filing of the Report due to circumstances related to the coronavirus
disease 2019 ("COVID-19"). The Company's operations and business, as well as
those of its independent registered public accounting firm, Grant Thornton LLP
("GT") which had previously notified the Company that its professional staff
engaged in the audit of the Company's financial statements and preparation of
the accompanying audit report would be working remotely and would no longer be
present at the Company's facilities, have experienced disruption due to the
unprecedented conditions surrounding the COVID-19 pandemic spreading throughout
the United States and the world. The Company's business was abruptly and
dramatically impacted by the COVID-19 pandemic as approximately 90% of the
Company's primary customers, public and private schools, were shut down which
necessitated the Company's focus over the past few weeks to be primarily on
executing its contingency plans. In addition, the Company's two primary
facilities are located in states which are under stay-at-home orders, resulting
in staffing challenges. These disruptions to the process of preparing the
Company's financial statements and accompanying audit report as a result of the
COVID-19 virus, are causing the Company's Form 10-K for the 2019 fiscal year
which is due on March 27, 2020 to be delayed. Consequently, the Company is
unable to timely file the Report. Notwithstanding the foregoing, the Company
expects to file the Report no later than May 11, 2020, which is 45 days after
the original due date of the Report.
In light of the current COVID-19 pandemic, the Company will be including the
following Risk Factor in its Report:
The current and potential effects of coronavirus may impact our business,
results of operations and financial condition.
There is substantial uncertainty as to the effects of coronavirus on our
business, results of operations and financial condition. If schools continue to
suspend classes, or in some cases, transition to remote and virtual schooling,
consumer behavior may be adversely impacted as it relates to the purchase of our
products. School shutdowns have resulted in our customers' inability to accept
shipments of our products and substantially lower orders. Suspension of classes
and remote or virtual schooling could result in further reductions in customer
orders and customers shifting their expenditures and funding to other areas.
Additionally, the effects of coronavirus have caused us to limit our operations
at our distribution centers and headquarters which has interrupted our vital
operational and administrative functions. Further limitations on operations at
or a shutdown of any of our distribution centers or administrative headquarters
could further interrupt or halt these functions. If the severity of the effects
related to coronavirus increases, there may be significant disruptions to our
supply chain, which could result in delays to both the manufacturing and the
shipment of our products. Any of these consequences may have a material adverse
impact on our business, results of operations and financial condition.
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Cautionary Note Regarding Forward-Looking Statements
This report may contain statements concerning School Specialty's future
financial condition, results of operations, expectations, plans or prospects,
including the anticipated timing of the filing of the Report. Such statements
are forward-looking statements. Forward-looking statements also include those
preceded by or followed by words like "anticipate," "believes," "could,"
"estimates," "expects," "intends," "may," "plan," "projects," "should,"
"targets" and/or similar expressions. These forward-looking statements are
based on School Specialty's estimates and assumptions as of the date of the
information presented, and as such involve uncertainty and risk, including the
unprecedented impact of COVID-19 pandemic on the Company's business.
Forward-looking statements are not guarantees of future performance and actual
results may differ materially from those contemplated by the forward-looking
statements due to a number of factors, including those described in Item 1A. of
School Specialty's Annual Report on Form 10-K for the year ended December 29,
2018, and in Item 1A of Part II of School Specialty's Quarterly Report on Form
10-Q for the quarter ended September 28, 2019, which factors are incorporated
herein by reference. Any forward-looking statement in this report speaks only as
of the date on which it is made. Except as required under the federal
securities laws, School Specialty does not intend to update or revise the
forward-looking statements.
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