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Burlington Stores Seeks Commitments from Lenders, Launches Debt Repricing & Extension Transaction

October 31, 2017, 07:28 AM
Filed Under: Retail

Burlington Stores, Inc., a nationally recognized off-price retailer of high-quality, branded apparel at everyday low prices, announced the launch of a debt repricing and extension transaction and provided updated guidance for the third quarter ended October 28, 2017.

The company is seeking commitments from lenders under a new senior secured credit facility for an aggregate principal amount of $1,117 million and expects the new senior credit facility to comprise a single tranche of loans maturing in 2024. The net proceeds of the new senior credit facility will be used to repay all indebtedness outstanding under the existing term loan B facility, which is set to mature in 2021, and to pay related fees and expenses. The Company is seeking pricing of 2.25% to 2.50% with a 0.75% LIBOR floor versus the current 2.75% with a 0.75% LIBOR floor.

Adjusted EBITDA is expected to be in the range of $129 million to $131 million and Adjusted EPS is expected to be in the range of $0.64-$0.66, including an approximate $0.02 benefit from the recent accounting change for share-based compensation. This compares to Adjusted EBITDA and Adjusted EPS for the prior year period of $109.6 million and $0.51, respectively. These estimates are based on a total sales increase of approximately 7.1%, which includes a comparable store sales increase of approximately 3.1%. Consistent with the Company’s policy regarding weather related incidents, the comparable store sales estimate excludes 19 stores which were closed for 7 or more days within a month during the third quarter. The impact of these store closures are reflected in the total sales estimate. The Company will review its operating performance in detail when it announces third quarter Fiscal 2017 results in late November.

The company has not presented a quantitative reconciliation of the forward-looking non-GAAP financial measures set out above to their most comparable GAAP financial measures because it would require the company to create estimated ranges on a GAAP basis, which would entail unreasonable effort. Adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with reasonable certainty but may include, among others, costs related to debt amendments, loss on extinguishment of debt, and impairment charges, as well as the tax effect of such items. Some or all those adjustments could be significant.

The company’s sales and profit expectations are estimated and subject to completion of the quarter-end closing adjustments. As the company has not completed its quarter close, the sales and profit expectations presented in this press release may change. This data has been prepared by management.

In a press release Burlington Stores said  there can be no assurances that the company will be able to consummate the debt transaction on the terms described or at all. The company is providing updated guidance given the launch of the debt transaction and the improvement in its expected performance as compared to its original third quarter guidance previously provided in conjunction with its second quarter 2017 results on August 24, 2017. Investors should not expect the company to provide interim quarterly updates of guidance or outlook information in advance of scheduled quarterly earnings announcement dates.

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