Item 1.01. Entry into a Material Definitive Agreement.
On April 22, 2019, Guess?, Inc. (the “Company”) amended (such amendment, “Amendment No. 2”) its senior secured asset-backed credit facility with Bank of America, N.A and the other lenders party thereto (the “Credit Facility”) to permit, among other things, the offering and sale of the Notes (as defined below) and certain transactions related thereto, including those transactions described in the Company’s press release attached hereto as Exhibit 99.1.
The foregoing description of Amendment No. 2 does not purport to be complete and is qualified in its entirety by reference to Amendment No. 2, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
The information in this Item 7.01 ofForm 8-K and the related information in Exhibits 99.1 and 99.2 is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Proposed Notes Offering
On April 22, 2019, the Company issued a press release announcing that it proposes to offer, subject to market conditions and other factors, $250 million aggregate principal amount of Convertible Senior Notes due 2024 (the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company also intends to grant the initial purchaser of the Notes a30-day option to purchase up to an additional $37.5 million aggregate principal amount of Notes, solely to cover over-allotments. A copy of the press release announcing the proposed offering of the Notes is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Expected Use of Proceeds of the Notes Offering
The Company intends to expand its share repurchase efforts, including by using substantially all of the net proceeds from the offering of Notes to repurchase shares of the Company’s common stock after giving effect to certain hedging transactions.
Business Update
On March 20, 2019, the Company reported preliminary financial results for the three months and twelve months ended February 2, 2019, including the Company’s outlook for the first quarter of Fiscal 2020. On April 22, 2019, the Company issued a press release announcing that, based on currentquarter-to-date trends, where the Company has identified relative strengths in Europe and the Americas offset by softness in Asia, compared to its initial outlook, the Company is reaffirming its total Company outlook for the Fiscal 2020 first quarter ending May 4, 2019.
The Company’s actual results may differ materially from these estimates due to the time remaining in the quarter, completion of its financial closing procedures, final adjustments and other developments that may arise between now and the time the financial results for the Company’s first quarter are finalized.
The Company will update its Fiscal 2020 Full Year outlook including the impact from the convertible debt offering and related transactions when it reports its Fiscal 2020 first quarter results for the period ending May 4, 2019.
As of April 6, 2019, the Company’s cash and cash equivalents were approximately $112.6 million. As of April 6, 2019, (i) the Company had $2.0 million in outstanding letters of credit, no outstanding documentary letters of credit and no outstanding borrowings under its asset-based revolving credit facility and (ii) the Company and its subsidiaries had approximately $56.1 million of outstanding borrowings under certain short-term committed and uncommitted borrowing agreements, primarily for working capital purposes, with various banks in Europe.
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