The company refinances the existing debt of the term loan
New loan maturity in 2025
Improves liquidity and further strengthens the balance sheet
DODGEVILLE, Wisconsin, Sep 09, 2020 (GLOBE NEWSWIRE) – Lands’ End, Inc. (NASDAQ: LE) today announced that it has secured a new $ 275 million term loan. The proceeds of the loan, combined with borrowings under the Company’s ABL facility, were used to refinance the Company’s term loan, which was due in April 2021. At the close of the refinancing, the maximum availability under the ABL facility was increased from $ 75 million to $ 275 million.
“We are pleased to announce the completion of this refinancing, which made it possible to achieve several important objectives, notably the lengthening of the duration of our debt and the improvement of our strong liquidity position with a more flexible balance sheet” , said Jim Gooch, CFO of Lands’ End. “The solid performance we achieved in the second quarter provided us with additional leverage to complete this financing on attractive terms. Our vibrant e-commerce base, limited bricks and mortar exposure and core core item business, combined successfully with our lean operating structure, allowed us to more than triple second quarter EBITDA from the previous year. With the strong momentum of our business, as well as this increased financial flexibility, we are ideally positioned to continue to execute our long-term growth strategies. ”
The loan is secured by a first lien on all non-ABL assets and a second lien on all ABL assets. Interest is payable monthly at 9.75% per year plus the greater of LIBOR or 1.0%. Amortization is payable quarterly at 1.25% of the initial capital. The loan matures in September 2025.
The Company was advised in connection with the transaction by JP Morgan, and the loan group consisted of affiliates of Fortress Investment Group, STORY3 Credit Partners and Blue Torch Capital.
The refinancing announcement follows the release of strong second quarter results on September 2, 2020 which were highlighted by 23.6% revenue growth in global e-commerce, net profit of 4.4 million. dollars (compared to a net loss of $ 3.0 million in the same period last year) and Adjusted EBITDA of $ 23.9 million, more than triple the same period last year .
Jerome Griffith, CEO and President, said: “We are very pleased to have had a strong second quarter building on the strong momentum in our global e-commerce business. Our performance reflects the execution of our strategies related to product innovation, our global e-commerce platform, data-driven marketing and our commitment to optimize our business processes and infrastructure. We will continue to develop our high-quality, value-driven product assortment offering with growth strategies that expand our customer base. To cap off this period with a successful refinancing of our term debt, we are positioning ourselves for future growth and success. “
About Lands’ End, Inc.
Lands’ End, Inc. (NASDAQ: LE) is a leading single-channel retailer of casual clothing, accessories, footwear and home products. We offer products online at www.landsend.com, in third party online marketplaces and at point of sale. We’re a classic American lifestyle brand with a passion for quality, legendary service and real value, and seek to deliver timeless style for women, men, kids and the home.
This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding the dynamics of the global electronic commerce business; the expected results of the refinancing; and the positioning of the Company for its future growth and success. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements; the impact of COVID-19 on the Company’s operations, customer demand and supply chain, as well as its consolidated operating results, financial condition and cash flows; the Company may fail to implement its strategic initiatives, or its initiatives may not have the desired impact on its business; the Company’s ability to offer goods and services that customers wish to purchase; changes in customer preferences for the Company’s branded merchandise; the Company’s results could be materially affected if tariffs on imports into the United States increase and if it is unable to compensate for increased costs from current or future tariffs through price negotiations with its supplier base, by moving production out of countries affected by tariffs, passing through part of the cost increases for the customer, or other savings opportunities; customer use of the Company’s digital platform, including customer acceptance of its efforts to improve its e-commerce websites; customer response to the Company’s marketing efforts on all types of media; the maintenance by the Company of a solid client list; the Company’s retail store strategy may fail; the Company’s reliance on information technology and computer systems failure, including with respect to its electronic commerce operations, or an inability to upgrade or adapt its systems; fluctuations and increases in raw material costs; the deterioration of the Company’s relations with its suppliers; the failure of the Company to maintain the security of customer, employee or company information; the Company’s inability to compete in the apparel industry; the legal, regulatory, economic and political risks associated with international trade and the markets in which the Company operates and sources its goods; the failure of the Company to protect or preserve the image of its brands and its intellectual property rights; increases in postage, paper and printing costs; the failure of third parties who provide the Company with services related to certain aspects of its business to perform their obligations; the Company’s inability to obtain timely and efficient shipments of products from its suppliers and to deliver goods to its customers; the use of promotions and markdowns to encourage customer purchases; the Company’s inability to effectively manage inventory levels; unusual or severe weather conditions; the negative effect on the reputation of the Company if its independent suppliers do not use ethical business practices or do not comply with applicable laws and regulations; assessments of additional state taxes; the appearance of charges due to the impairment of goodwill, other intangible assets and long-lived assets; the impact on the Company’s business of adverse global economic and market conditions, including economic factors that negatively impact consumer spending on discretionary items; potential indemnification obligations to Sears Holdings under the Separation and Distribution Agreement in connection with the separation of the Company from Sears Holdings; the ability of the Company’s main shareholders to exercise substantial influence over the Company; potential liabilities under transfer and fraudulent transfer laws and legal capital requirements; and other risks, uncertainties and factors discussed in the “Risk Factors” section of the Company’s annual report on Form 10-K for the year ended January 31, 2020, and in the Company’s current report on Form 8 -K dated June 2, 2020. The Company intends that forward-looking statements speak only as they are made and does not undertake to update or revise them as more information becomes available, except as required by law.
Reconciliation of non-GAAP financial information to GAAP
|13 weeks completed|
|July 31, 2020||Aug 2, 2019|
|(in thousands)||$||% of
|Net income (loss)||$||4.376||1.4||%||$||(3 014||)||(1.0||)%|
|Tax expense (benefit)||568||0.2||%||(3,174||)||(1.1||)%|
|Other expenses (income), net||1333||0.4||%||(608||)||(0.2||)%|
|Interest charges||4 916||1.6||%||6 235||2.1||%|
|Operating profit (loss)||11,193||3.6||%||(561||)||(0.2||)%|
|Depreciation and amortization||9 378||3.0||%||7,408||2.5||%|
|Company restructuring||2 925||0.9||%||–||0.0||%|
|Impairment of long-lived assets||400||0.1||%||–||0.0||%|
|Loss (gain) on property, plant and equipment||48||0.0||%||(22||)||(0.0||)%|
|Adjusted EBITDA||$||23 944||7.7||%||$||6 825||2.3||%|
Lands’ End, Inc.
COO and CFO