RH Announces Repayment of $100 Million Second Lien Term Loan
11 October 2017 - 7:05AM
Business Wire
Company Expects Incremental $0.05 Benefit to
FY17 Adjusted Diluted EPS
RH (NYSE: RH) today announced the repayment of its $100 million
second lien term loan on October 10, 2017. The annualized cash
interest rate on the second lien term loan was approximately 9.5%
as of the date of retirement. The Company funded the repayment with
borrowings on its asset backed credit facility, which bears current
annualized interest of approximately 2.75%, as well as existing
cash on its balance sheet.
As a result of the early repayment of the second lien term loan,
and related reduction in interest expense, the Company expects an
incremental $0.05 benefit to its fiscal 2017 adjusted diluted
earnings per share.
Gary Friedman, RH Chairman and Chief Executive Officer,
commented, “Based on our strong business performance, significant
cash flow generation, and confidence in our future outlook, we are
retiring the second lien term loan just over three months after
securing it. The $100 million second lien term loan was intended to
act as a short term bridge loan to help fund the Company’s purchase
earlier this year of nearly one-half of its outstanding shares,
which has created, and we believe will continue to create,
significant shareholder value. The early debt retirement is
expected to be incremental to the Company’s fiscal 2017 adjusted
diluted earnings per share by approximately $0.05.”
About RH
RH (NYSE: RH) is a curator of design, taste and style in the
luxury lifestyle market. The Company offers collections through its
retail galleries, Source Books, and online at RH.com, RHModern.com,
and Waterworks.com.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the federal securities laws, including statements
related to: the Company’s expectation of an incremental $0.05
benefit to its fiscal 2017 adjusted diluted earnings per share as a
result of the early repayment of the second lien term loan and
related reduction in interest expense, the Company’s confidence in
its future outlook and the Company’s belief that the purchase
earlier this year of nearly one-half of its outstanding shares will
continue to create significant shareholder value. You can identify
forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may
include words such as “anticipate,” “estimate,” “expect,”
“project,” “plan,” “intend,” “believe,” “may,” “will,” “should,”
“likely” and other words and terms of similar meaning in connection
with any discussion of the timing or nature of future events. We
cannot assure you that future developments affecting us will be
those that we have anticipated. Important risks and uncertainties
that could cause actual results to differ materially from our
expectations or the assumptions set forth in this release include,
among others, our ability to retain key personnel; successful
implementation of our growth strategy; our ability to leverage
Waterworks; uncertainties in the current performance of our
business including a range of risks related to our operations as
well as external economic factors; general economic conditions and
the impact on consumer confidence and spending; changes in customer
demand for our products; our decisions concerning the allocation of
capital; decisions concerning the allocation of capital including
the extent to which we repurchase additional shares of our common
stock which will affect shares outstanding and earnings per share;
factors affecting our outstanding convertible senior notes or other
forms of our indebtedness; our ability to anticipate consumer
preferences and buying trends, and maintaining our brand promise to
customers; changes in consumer spending based on weather and other
conditions beyond our control; risks related to the number of new
business initiatives we are undertaking; strikes and work stoppages
affecting port workers and other industries involved in the
transportation of our products; our ability to obtain our products
in a timely fashion or in the quantities required; our ability to
employ reasonable and appropriate security measures to protect
personal information that we collect; our ability to support our
growth with appropriate information technology systems; risks
related to “conflict minerals” compliance and its impact on
sourcing, if any, as well as those risks and uncertainties
disclosed under the sections entitled “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in RH’s most recent Form 10-K and Form 10-Q
filed with the Securities and Exchange Commission, and similar
disclosures in subsequent reports filed with the SEC, which are
available on our investor relations website at ir.rh.com and on the
SEC website at www.sec.gov. Any forward-looking statement made by
us in this press release speaks only as of the date on which we
make it. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by any
applicable securities laws.
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version on businesswire.com: http://www.businesswire.com/news/home/20171010006601/en/
RHCammeron McLaughlin, 415-945-4998SVP, Investor Relations &
Strategycmclaughlin@rh.com
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