Franchise Group, Inc. Amends Term Loan at the Vitamin Shoppe to Provide for Partial Early Prepayment
June 01 2020 - 9:15AM
Franchise Group, Inc. (NASDAQ: FRG) (“Franchise Group” or the
“Company”) today announced that it has amended and acquired a
portion of its term loan at The Vitamin Shoppe, a business line
consisting of multiple wholly owned subsidiaries of the
Company.
Since closing the acquisition of The Vitamin
Shoppe on December 16, 2019, the Company has now repaid, or
acquired for its own account (through a wholly owned subsidiary),
more than $22 million of the original $70 million term loan.
Brian Kahn, CEO of Franchise Group, stated, “On May 22, we had the
opportunity to acquire and effectively retire an additional $5.325
million of our highest interest rate tranche debt, bringing total
repayments and acquisitions up to $22.075 million since closing the
acquisition of The Vitamin Shoppe in December. Our year to
date performance and strong working relationship with our lenders
have allowed us to accelerate the elimination of the term loan used
in the acquisition financing. Additionally, we have agreed
with our lenders to make another previously unscheduled prepayment
of $12.5 million, which we anticipate making in the third quarter
of 2020. By the end of 2020, in Franchise Group’s first full
year of ownership of The Vitamin Shoppe, we estimate that we will
have effectively eliminated over $42 million of the $70 million
initial term loan.”
The Company’s decision to prepay and acquire
debt of The Vitamin Shoppe does not impact Franchise Group’s
ability to pay cash dividends to its shareholders. The
Company is committed to paying a regular dividend based on its
operating performance and availability of cash. All dividend
payments are approved by the Board of Directors and will be
announced when and if declared by the Board.
About Franchise Group, Inc.
Franchise Group, Inc. (NASDAQ: FRG) is an
operator of franchised and franchisable businesses and uses its
operating expertise to drive cost efficiencies and grow its
brands. Franchise Group’s business lines include Liberty Tax
Service, Buddy’s Home Furnishings, American Freight and The Vitamin
Shoppe. On a combined basis, Franchise Group currently
operates over 4,400 locations predominantly located in the U.S. and
Canada that are either Company-run or operated pursuant to
franchising agreements.
Forward-Looking Statements
This 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, including the Company’s expectations regarding its financial
condition, its debt reduction plans, its ability to repay
additional debt, its ability to pay cash dividends, and the effects
of the coronavirus (COVID-19) pandemic on economic conditions and
the industry in general and the financial position and operating
results of the Company. These statements are based upon current
expectations, beliefs and assumptions of Company management, and
there can be no assurance that such expectations will prove to be
correct. 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. We refer you to the “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections of the Company’s Transition Report
on Form 10-K/T for the transition period ended December 28, 2019,
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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