MOORESTOWN, N.J., Feb. 1, 2018 /PRNewswire/ -- Destination
Maternity (NASDAQ: DEST) announced today that it has taken
significant steps to strengthen its balance sheet and enhance its
financial capacity and flexibility. The Company has entered
into a new five-year $25 million
senior secured term loan facility with Pathlight Capital LLC and
Wells Fargo Bank, N.A. The new $25
million term loan will bear interest at LIBOR + 9.0% per
annum. Proceeds will be used to repay the Company's existing
term loan due March 2021. In addition, the Company and Wells
Fargo have agreed to extend the Company's current revolving credit
facility to be coterminous with the new term loan, as well as other
modifications which will give the Company increased borrowing
flexibility moving forward. The Company has initially drawn
$22.5 million of the term loan and
has a Company option, subject to certain conditions, to draw an
additional $2.5 million. Once
the term loan is fully drawn, the Company expects these
arrangements will yield in excess of $10
million of additional borrowing availability going
forward.
Melissa Payner-Gregor, Interim
Chief Executive Officer of Destination Maternity, commented, "We
are pleased to complete this financing as it enhances our borrowing
capacity and increases the Company's financial flexibility to
implement its strategy to deliver long term profitable
growth. We believe our ability to enter into this new term
loan agreement on favorable terms is a powerful testament to the
strength of our brands, the Company's positioning as the leader in
maternity apparel, and the confidence the investment and lender
community has in the Company's strategic plan. We appreciate
the continued support of Wells Fargo, as well as the addition of
Pathlight as our new lead term loan lender."
In connection with the new term loan financing, Guggenheim
Securities, LLC acted as sole lead arranger and Pepper Hamilton LLP
acted as the Company's legal advisor.
About Destination Maternity
Destination Maternity Corporation is the world's largest
designer and retailer of maternity apparel. As of October 28, 2017, Destination Maternity operates
1,147 retail locations in the United
States, Canada and
Puerto Rico, including 501 stores,
predominantly under the trade names Motherhood Maternity®, A Pea in
the Pod® and Destination Maternity®, and 646 leased department
locations. The Company also sells merchandise on the web primarily
through its brand-specific websites, motherhood.com and
apeainthepod.com, as well as through its destinationmaternity.com
website. Destination Maternity has international store franchise
and product supply relationships in the Middle East, South
Korea, Mexico, Israel and India. As of October
28, 2017, Destination Maternity has 208 international
franchised locations, including 16 standalone stores operated under
one of the Company's nameplates and 192 shop-in-shop locations.
Forward-Looking Statements
The Company cautions that any forward-looking statements (as
such term is defined in the Private Securities Litigation Reform
Act of 1995) contained in this press release or made from time to
time by management of the Company, including those regarding
financing arrangements and various business initiatives, involve
risks and uncertainties, and are subject to change based on various
important factors. The following factors, among others, in some
cases have affected and in the future could affect the Company's
financial performance and actual results and could cause actual
results to differ materially from those expressed or implied in any
such forward-looking statements: the strength or weakness of the
retail industry in general and of apparel purchases in particular,
our ability to successfully manage our various business
initiatives, the success of our international business and its
expansion, our ability to successfully manage and retain our leased
department and international franchise relationships and marketing
partnerships, future sales trends in our various sales channels,
unusual weather patterns, changes in consumer spending patterns,
raw material price increases, overall economic conditions and other
factors affecting consumer confidence, demographics and other
macroeconomic factors that may impact the level of spending for
apparel (such as fluctuations in pregnancy rates and birth rates),
expense savings initiatives, our ability to anticipate and respond
to fashion trends and consumer preferences, unanticipated
fluctuations in our operating results, the impact of competition
and fluctuations in the price, availability and quality of raw
materials and contracted products, availability of suitable store
locations, continued availability of capital and financing, our
ability to hire, develop and retain senior management and sales
associates, our ability to develop and source merchandise, our
ability to receive production from foreign sources on a timely
basis, our compliance with applicable financial and other covenants
under our financing arrangements, potential debt prepayments, the
trading liquidity of our common stock, changes in market interest
rates, our compliance with certain tax incentive and abatement
programs, war or acts of terrorism and other factors set forth in
the Company's periodic filings with the U.S. Securities and
Exchange Commission (the "SEC"), or in materials incorporated
therein by reference. Although it is believed that the expectations
reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to have
been correct and persons reading this announcement are therefore
cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this announcement.
The Company assumes no obligation to update or revise the
information contained in this announcement (whether as a result of
new information, future events or otherwise), except as required by
applicable law.
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SOURCE Destination Maternity Corporation