Fashion apparel retailer Express, Inc. (NYSE: EXPR) today
announced two transactions in support of a comprehensive plan to
refinance its capital structure and expand its liquidity access
while concurrently reducing interest rate exposure and providing
flexibility to pay down its outstanding term debt balance.
These two transactions include:
- Increasing the maximum revolver amount by $40 million to $290
million by amending its current $250 million Senior Secured
Asset-Based Revolving Credit Facility (the “Amended Revolving
Credit Facility”)
- Refinancing and reducing Express’ fixed debt exposure by
amending its current $140 million Senior Secured Asset-Based Term
Loan Credit Facility (the “Amended Term Loan Facility”), including
refinancing its $90 million First-In-Last-Out (“FILO”) Term Loan
and terminating its $50 million Delayed Draw Term Loan (“DDTL”), of
which $43 million was previously paid down
"We are pleased to complete these refinancing transactions,
which bolster our liquidity access, strengthen our balance sheet,
reduce our interest rate exposure and improve our capital
structure,” said Jason Judd, Chief Financial Officer at Express.
“We will continue working to reduce debt exposure in 2023. Under
the terms of the Amended Term Loan Facility, Express can use
proceeds from the $52 million CARES Act receivable to pay down
outstanding term debt. With enhanced financial flexibility, we
believe we are well-positioned to continue executing our EXPRESSway
Forward strategy and pursuing growth opportunities.”
Amended Revolving Credit Facility
Express’ current $250 million Amended Revolving Credit Facility,
jointly led by Wells Fargo Bank, N.A. (“Wells Fargo”) and Bank of
America, N.A. (“Bank of America”), was amended and increased by $40
million to $290 million with Wells Fargo serving as administrative
agent and collateral agent. The interest rate has been reduced by
replacing the London Interbank Offered Rate (“LIBOR”) interest rate
benchmark, which had an applicable margin of 2.00% to 2.25%, with
the Secured Overnight Financing Rate (“SOFR”) interest rate
benchmark, which has an applicable margin of 1.60% to 1.85%. The
Amended Revolving Credit Facility will mature on November 26, 2027.
At current applicable rates, the replacement of LIBOR with SOFR
under the Amended Revolving Credit Facility reduces interest rate
exposure by approximately 40 basis points.
Amended Term Loan Facility
Express’ current $140 million Term Loan Facility was amended by
refinancing its $90 million FILO Term Loan and terminating its $50
million DDTL. Wells Fargo will serve as administrative agent and
collateral agent for the Amended Term Loan Facility. ReStore
Capital acted as lead lender, with Wells Fargo and Bank of America
also participating as lenders. The interest rate has been reduced
by replacing LIBOR, which had an applicable margin of 7.00% to
8.25%, as the interest rate benchmark with SOFR, which has an
applicable margin of 7.50%. The Amended Term Loan Facility will
mature on November 26, 2027. At current applicable rates, the
replacement of LIBOR with SOFR under the Amended Term Loan Facility
reduces interest rate exposure by approximately 85 basis
points.
Kirkland & Ellis LLP served as legal advisor to the Company.
Wells Fargo is the administrative agent and the collateral agent
for both facilities.
About Express, Inc.
Express is a modern, multichannel apparel and accessories brand
grounded in versatility, guided by its purpose - We Create
Confidence. We Inspire Self-Expression. - and powered by a styling
community. Launched in 1980 with the idea that style, quality and
value should all be found in one place, Express has been a part of
some of the most important and culture-defining fashion trends. The
Express Edit design philosophy ensures that the brand is always ‘of
the now’ so people can get dressed for every day and any occasion
knowing that Express can help them look the way they want to look
and feel the way they want to feel.
The Company operates over 550 retail and outlet stores in the
United States and Puerto Rico, the express.com online store and the
Express mobile app. Express, Inc. is comprised of the brands
Express and UpWest, and is traded on the NYSE under the symbol
EXPR. For more information, please visit www.express.com or
www.upwest.com.
About ReStore Capital
ReStore Capital is a credit-focused investment manager providing
tailored financing solutions for consumer, retail, wholesale, and
e-commerce businesses. ReStore Capital partners with management
teams, sponsors and other investors to provide creative solutions
for refinancings, growth capital, leveraged buyouts, add-on
acquisitions, recapitalizations, and opportunistic investments. For
more information, please visit www.restore-cap.com
Forward-Looking Statements
Certain statements are “forward-looking statements” made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include
any statement that does not directly relate to any historical or
current fact and include, but are not limited to (1) expansion of
the Company’s access to liquidity; (2) reduction in the Company’s
interest rate exposure and interest expense; (3) the Company’s
ability to pay down its outstanding term debt balance; (4) the
Company’s ability to use proceeds from the CARES Act receivable;
(5) execution of the EXPRESSway Forward strategy and pursuit of
growth opportunities; (6) guidance and expectations, including
statements regarding expected operating margins, comparable sales,
effective tax rates, interest income, net income, diluted earnings
per share; cash tax refunds, liquidity, EBITDA, free cash flow,
eCommerce demand, and capital expenditures; (7) statements
regarding expected store openings, store closures, store
conversions, and gross square footage; and (8) statements regarding
the Company's strategy, plans, and initiatives, including, but not
limited to, results expected from such strategy, plans, and
initiatives. You can identify these forward-looking statements by
the use of words in the future tense and statements accompanied by
words such as “outlook,” “indicator,” “believes,” “expects,”
“potential,” “continues,” “may,” “will,” “should,” “seeks,”
“approximately,” “predicts,” “intends,” “plans,” “scheduled,”
“estimates,” “anticipates,” “opportunity,” “leads” or the negative
version of these words or other comparable words. Forward-looking
statements are based on our current expectations and assumptions,
which may not prove to be accurate. These statements are not
guarantees and are subject to risks, uncertainties, and changes in
circumstances that are difficult to predict, and significant
contingencies, many of which are beyond the Company's control. Many
factors could cause actual results to differ materially and
adversely from these forward-looking statements. Among these
factors are (1) changes in consumer spending and general economic
conditions; (2) the COVID-19 pandemic and its continued impact on
our business operations, store traffic, employee availability,
financial condition, liquidity and cash flow; (3) geopolitical
risks, including impacts from the ongoing conflict between Russia
and Ukraine and increased tensions between China and Taiwan; (4)
our ability to operate our business efficiently, manage capital
expenditures and costs, and obtain financing when required; (5) our
ability to identify and respond to new and changing fashion trends,
customer preferences, and other related factors; (6) fluctuations
in our sales, results of operations, and cash levels on a seasonal
basis and due to a variety of other factors, including our product
offerings relative to customer demand, the mix of merchandise we
sell, promotions, and inventory levels; (7) customer traffic at
malls, shopping centers, and at our stores; (8) competition from
other retailers; (9) our dependence on a strong brand image; (10)
our ability to adapt to changing consumer behavior and develop and
maintain a relevant and reliable omni-channel experience for our
customers; (11) the failure or breach of information systems upon
which we rely; (12) our ability to protect customer data from fraud
and theft; (13) our dependence upon third parties to manufacture
all of our merchandise; (14) changes in the cost of raw materials,
labor, and freight; (15) supply chain or other business disruption,
including as a result of the coronavirus; (16) our dependence upon
key executive management; (17) our ability to execute our growth
strategy, EXPRESSway Forward, including engaging our customers and
acquiring new ones, executing with precision to accelerate sales
and profitability, creating great product and reinvigorating our
brand; (18) our substantial lease obligations; (19) our reliance on
third parties to provide us with certain key services for our
business; (20) impairment charges on long-lived assets; (21) claims
made against us resulting in litigation or changes in laws and
regulations applicable to our business; (22) our inability to
protect our trademarks or other intellectual property rights which
may preclude the use of our trademarks or other intellectual
property around the world; (23) restrictions imposed on us under
the terms of our Amended Revolving Credit Facility and our Amended
Term Loan Facility, including restrictions on the ability to effect
share repurchases; (24) changes in tax requirements, results of tax
audits, and other factors that may cause fluctuations in our
effective tax rate; (25) changes in tariff rates; and (26) natural
disasters, extreme weather, public health issues, including
pandemics, fire, acts of terrorism or war and other events that
cause business interruption. These factors should not be construed
as exhaustive and should be read in conjunction with the additional
information concerning these and other factors in Express, Inc.'s
filings with the Securities and Exchange Commission. We undertake
no obligation to publicly update or revise any forward-looking
statement as a result of new information, future events, or
otherwise, except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20221128005707/en/
Greg Johnson gjohnson@express.com 614-474-4890
Express (NYSE:EXPR)
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