“Recent economic tumult may further impact consumer sentiment and spending in the back half, but we are financially well-positioned to continue our controlled growth and weather an uncertain economic environment. Our Board’s decision to commence a stock repurchase program and the agreement to renew our $50 million credit facility signal our confidence in the future of Kirkland’s.”
Stock Repurchase Authorization of $40 Million
The Board of Directors has authorized a stock repurchase plan providing for the purchase in the aggregate of up to $40 million of the Company’s outstanding common stock over the next 18 months. The shares may be repurchased from time to time in open market or negotiated transactions, and the amount and timing of those purchases will be based on a variety of factors, including stock acquisition price, regulatory limitations and other market and economic factors. The stock repurchase program does not require the Company to repurchase any specific number of shares, and the Company may terminate the repurchase program at any time. As of July 30, 2011, the Company had 20.2 million common shares outstanding.
$50 Million Senior Secured Credit Facility
The Company also announced that it has agreed to renew its $50 million senior secured credit facility led by Bank of America, N.A., as administrative agent. The facility will mature in August 2016 and will bear interest at an annual rate equal to LIBOR plus a margin ranging from 175 to 225 basis points with no LIBOR floor and no financial maintenance covenants.
Fiscal 2011 Outlook
At quarter end, the Company had 294 stores compared with 300 at the beginning of 2011 and 286 at the end of the prior-year period. For fiscal 2011, the Company now expects to open approximately 15-20 net new stores, representing square footage growth of 9% to 12%. New store opening activity will be heavily weighted toward the second half of the year. Store closings will typically coincide with replacement store openings.