Perry Ellis International Exercises Call Provision to Redeem $57 Million 9 1/2 Senior Secured Notes as of March 15, 2006
February 01 2006 - 4:11PM
Business Wire
Perry Ellis International, Inc. (Nasdaq:PERY) today announced that
it has exercised the call provision of the $57 million 9 1/2 Senior
Secured Notes to redeem these notes effective March 15, 2006. The
Company indicated that it expects annual interest expense savings
of approximately $1.5 million as a result of lowering its overall
cost of capital from this transaction. The Company expects to
utilize its $175 million revolving senior credit facility and cash
flow from operations to redeem the senior secured notes. As of
January 31, 2006, the Company had approximately $40 million of
borrowings outstanding on its $175 million revolving senior credit
facility. The call provision as of March 15, 2006 permits the bonds
to be redeemed at a premium of 102.375%, and the Company expects to
incur debt extinguishment costs of approximately $3.0 million
during the first quarter of fiscal 2007 in connection with this
action, including call premium costs, write-off of bond issue costs
and costs associated with the termination of derivatives related to
the senior secured notes. George Feldenkreis, Chairman & CEO
commented: "We are pleased that our strong cash flow allows us to
take advantage of this opportunity to reduce our overall cost of
capital. During the year ended January 31, 2006 as a result of the
February 2005 Tropical Sportswear and January 2006 Gotcha
acquisitions, we funded approximately $95 million of acquisitions
from our credit facility. Despite this, as a result of our strong
cash flow from operations and working capital management we were
able to repay approximately $65 million of these borrowings. This
demonstrates our ability and commitment to generate strong cash
flow." About Perry Ellis International Perry Ellis International,
Inc. is a leading designer, distributor and licensor of a broad
line of high quality men's and women's apparel, accessories, and
fragrances, including dress and casual shirts, golf sportswear,
sweaters, dress and casual pants and shorts, jeans wear, active
wear and men's and women's swimwear to all major levels of retail
distribution. The company, through its wholly owned subsidiaries,
owns a portfolio of highly recognized brands including Perry
Ellis(R), Jantzen(R), Cubavera(R), Munsingwear(R), Savane(R),
Original Penguin(R), Grand Slam(R), Natural Issue(R), Pro
Player(R), the Havanera Co.(R), Axis(R), Tricots St. Raphael(R),
Gotcha(R), Girl Star(R) and MCD(R). The company also licenses
trademarks from third parties including Nike(R) for swimwear, and
PING(R) and PGA TOUR(R) for golf apparel. Additional information on
the company is available at http://www.pery.com. Safe Harbor
Statement Forward-looking statements (statements which are not
historical facts) in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. The actual results of Perry Ellis could differ materially
from those expressed or indicated by forward-looking statements.
Factors that could cause or contribute to such differences include,
but are not limited to, general economic conditions, a significant
decrease in business from or loss of any of Perry Ellis' major
customers, anticipated and unanticipated trends and conditions in
the apparel industry, including current or future retail and
wholesale consolidation, the effectiveness of Perry Ellis' planned
advertising, marketing and promotional campaigns, the seasonality
and performance of Perry Ellis' swimwear business, the ability of
Perry Ellis to contain costs, disruption in the supply chain, Perry
Ellis' future capital needs and ability to obtain financing,
ability to integrate businesses, trademarks, trade names and
licenses, including the recently completed Gotcha acquisition, the
ability to predict consumer preferences and changes in fashion
trends and consumer acceptance of both new designs and newly
introduced products, changes in the costs of raw materials, labor
and advertising, the ability to carry out growth strategies, the
level of consumer spending for apparel and other merchandise, the
ability to compete, termination or non-renewal of any material
license agreements to which Perry Ellis is a party, exposure to
foreign currency and interest rate risk, possible disruption in
commercial activities due to terrorist activity and armed conflict
and other factors, including those set forth in Perry Ellis'
filings with the Securities and Exchange Commission. Investors are
cautioned that all forward-looking statements involve risks and
uncertainties, including those risks and uncertainties detailed in
Perry Ellis' filings with the SEC. Any forward-looking statements
speak only as of the day hereof and Perry Ellis disclaims any
intent or obligation to update the same.
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