Burlington Stores, Inc. Announces Launch Of Debt Refinancing Transaction And Updates Comparable Store Sales Guidance For The Second Quarter Ending August 2, 2014
Burlington Stores, Inc. (NYSE:BURL), a nationally recognized off-price
retailer of high-quality, branded apparel at everyday low prices, today
announced the launch of a debt refinancing transaction and provided
Burlington Stores, Inc. (NYSE:BURL), a nationally recognized off-price retailer of high-quality, branded apparel at everyday low prices, today announced the launch of a debt refinancing transaction and provided updated comparable store sales guidance for the second quarter ending August 2, 2014. The Company is seeking commitments from lenders under a new senior secured credit facility for an aggregate principal amount of $1,200 million and currently expects the new senior secured credit facility to comprise a single tranche of term loans maturing in 2021. In addition, the Company is renewing its current ABL facility for an additional five years and expects to benefit from current market pricing. Second Quarter Comparable Store Sales Based on the Company’s results quarter to date and its estimates for the remainder of July, comparable store sales for the second fiscal quarter of 2014 are expected to increase between 3% and 4%, which follows last year’s second quarter comparable stores sales increase of 7.8%. This compares to the Company’s previous comparable store sales guidance for the second quarter of 2% to 3%. For the full year, the Company expects operating margin rates consistent with previous guidance, including an increase in Adjusted EBITDA margin rate of 10 to 20 basis points, as compared to the prior fiscal year. Refinancing Transaction The net proceeds of the new senior secured credit facility, together with borrowings of approximately $217 million under the Company’s ABL Facility, will be used to repay all indebtedness outstanding under the existing term loan B facility (4.25%), to redeem the 9.00%/9.75% Senior Notes due 2018 (the “2018 Notes”) and 10% Senior Notes due 2019 (the “2019 Notes”) and to pay related fees and expenses. The Company estimates that if the refinancing transaction had been consummated February 2, 2014, the first day of the fiscal year, at the indicative pricing of 3.0% to 3.25% plus a 1% LIBOR floor, it would have realized annual interest expense savings of $34 million to $38 million, depending on the final pricing. This would have resulted in an increase to fully diluted adjusted earnings per share of 27 cents to 30 cents for the full year. These interest expense savings estimates are net of the potential impact of the costs of hedges, which may be entered into to limit interest rate risk.