Franchise Group, Inc. Announces the Launch of a $200 Million Add-on to Its Existing Term Loan
25 January 2023 - 8:01AM
Franchise Group, Inc. (NASDAQ: FRG) (“Franchise Group,” “FRG” or
the “Company”) today announced that it has launched a $200 million
non-fungible add-on to its existing first lien term loan due in
March 2026. Proceeds from the transaction are expected to be used
to pay down existing debt under the Company’s ABL credit facility.
The Company also announced that it expects to
report fiscal 2022 results in line with or exceeding the financial
outlook it previously provided on November 3, 2022, which indicated
that the Company’s total reported revenue is expected to be
approximately $4.3 billion and Adjusted EBITDA is expected to be at
least $350 million.
JPMorgan Chase Bank, N.A. is acting as lead
arranger of the financing.
The Company does not provide a quantitative
reconciliation of forward-looking, Non-GAAP financial measures such
as forecasted Adjusted EBITDA to the most directly comparable GAAP
financial measures because it is difficult to reliably predict or
estimate the relevant components without unreasonable effort due to
future uncertainties that may potentially have significant impact
on such calculations, and providing them may imply a degree of
precision that would be confusing or potentially misleading.
Estimates exclude potential acquisitions, divestitures or
refranchising activities. See “Non-GAAP Financial Measures and Key
Metrics.”
About Franchise Group,
Inc.Franchise Group is an owner and operator of franchised
and franchisable businesses that continually looks to grow its
portfolio of brands while utilizing its operating and capital
allocation philosophy to generate strong cash flow for its
shareholders. Franchise Group’s business lines include Pet Supplies
Plus, Wag N’ Wash, American Freight, The Vitamin Shoppe, Badcock
Home Furniture & More, Buddy’s Home Furnishings and Sylvan
Learning. On a combined basis, Franchise Group currently operates
over 3,000 locations predominantly located in the U.S. that are
either Company-run or operated pursuant to franchising and dealer
agreements.
Non-GAAP Financial Measures and Key
MetricsAdjusted EBITDA is a financial measure that is not
prepared in accordance with GAAP. Management believes the
presentation of this measure is useful to investors as a
supplemental measure in evaluating the aggregate performance of the
Company’s operating businesses and in comparing its results from
period to period because it excludes items that the Company does
not believe are reflective of its core or ongoing operating
results. This measure is used by management to evaluate the
Company’s performance and make resource allocation decisions each
period. This metric is also used in the determination of executive
management's compensation. Adjusted EBITDA should not be considered
in isolation or as a substitute for net income or other income
statement information prepared in accordance with GAAP and our
presentation of this non-GAAP measure may not be comparable to
similarly titled measures used by other companies.
Management defines and calculates Adjusted
EBITDA as net income (loss) from continuing operations before
interest, income taxes, depreciation and amortization adjusted for
certain non-core or non-operational items related to executive
severance and related costs, stock-based compensation, shareholder
litigation costs, corporate governance costs, accrued judgments and
settlements, net of estimated revenue, store closures, rebranding
costs, acquisition costs, inventory fair value step up amortization
and prepayment penalty on early debt repayment. Adjusted EBITDA is
a financial measure that is not prepared in accordance with
GAAP.
Forward-Looking StatementsThis
press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, without limitation,
projections, predictions, expectations, or beliefs about future
events or results and are not statements of historical fact. Such
statements may include statements regarding the Company’s results
of operation and financial condition, statements regarding the
expected use of proceeds in connection with the add-on to its
existing first lien term loan and statements regarding its outlook
for fiscal 2022. Such forward-looking statements are based on
various assumptions as of the time they are made, and are
inherently subject to known and unknown risks, uncertainties and
other factors that may cause actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Forward-looking statements are often
accompanied by words that convey projected future events or
outcomes such as “expect,” “believe,” “estimate,” “plan,”
“project,” “anticipate,” “intend,” “will,” “may,” “view,”
“opportunity,” “potential,” or words of similar meaning or other
statements concerning opinions or judgment of the Company or its
management about future events. Although the Company believes that
its expectations with respect to forward-looking statements are
based upon reasonable assumptions within the bounds of its existing
knowledge of its business and operations, there can be no assurance
that actual results, performance, or achievements of the Company
will not differ materially from any projected future results,
performance or achievements expressed or implied by such
forward-looking statements. Actual future results, performance or
achievements may differ materially from historical results or those
anticipated depending on a variety of factors, many of which are
beyond the control of the Company. The Company refers you to the
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections of the
Company’s Form 10-K for the fiscal year ended December 25, 2021,
and comparable sections of the Company’s Quarterly Reports on Form
10-Q and other filings, which have been filed with the SEC and are
available on the SEC’s website at www.sec.gov. All of the
forward-looking statements made in this press release are expressly
qualified by the cautionary statements contained or referred to
herein. The actual results or developments anticipated may not be
realized or, even if substantially realized, they may not have the
expected consequences to or effects on the Company or its business
or operations. Readers are cautioned not to rely on the
forward-looking statements contained in this press release.
Forward-looking statements speak only as of the date they are made
and the Company does not undertake any obligation to update, revise
or clarify these forward-looking statements, whether as a result of
new information, future events or otherwise.
Investor Relations Contact:Andrew F.
KaminskyEVP & Chief Administrative OfficerFranchise Group,
Inc.akaminsky@franchisegrp.com(914) 939-5161
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