From: ASAP
Hartmarx Corporation (NYSE: HMX) today announced the early retirement of $15 million of its outstanding 12.5% Senior Unsecured Notes, effective November 26, 2002. The $25.3 million face value of outstanding Senior Unsecured Notes, due on September 15, 2003, are currently callable in whole or in part at par and without penalty.
Homi Patel, president and chief executive officer, stated, "Retiring the Senior Unsecured Notes in advance of their maturity was anticipated when we entered into our new $200 million Senior Credit Facility in August, 2002. Overall debt levels have continued to decline well ahead of plan, and this early retirement enables us to lower our borrowing costs further. Based on current borrowing rates of approximately 4.3% under the LIBOR and prime based Senior Credit Facility, the cash interest savings during 2003 from this early retirement will be approximately $1 million. This interest savings is in addition to the previously announced $2.5 million lower cash interest expected from the August, 2002 refinancing of our principal credit facility. We expect the Company will be profitable for the fourth quarter and full year ending November 30, 2002, with further debt reduction to be realized by fiscal year end. At that time, we anticipate we will be in a position to announce the early retirement of the remaining $10.3 million of Senior Unsecured Notes," Mr. Patel concluded.
The early retirement will result in a non-cash extraordinary charge, net of income tax benefit, of approximately $.9 million or $.03 per share, representing acceleration of unamortized debt discount and fees which otherwise would have been amortized to expense during 2003, but which will now be reflected in the Company's fourth quarter ending November 30, 2002.
Hartmarx produces and markets business, casual and golf apparel under its own brands including Hart Schaffner & Marx, Hickey-Freeman, Palm Beach, Coppley, Cambridge, Keithmoor, Racquet Club, Naturalife, Pusser's of the West Indies, Royal, Brannoch, Riserva, Sansabelt, Barrie Pace and Hawksley & Wight. In addition, Hartmarx has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Tommy Hilfiger, Kenneth Cole, Burberrys men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Evan-Picone, Pierre Cardin, Perry Ellis, KM by Krizia, and Daniel Hechter. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs.
The comments set forth above contain forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements could be significantly impacted by such factors as the level of consumer spending for men's and women's apparel, the prevailing retail environment, the Company's relationships with its suppliers, customers, licensors and licensees, actions of competitors that may impact the Company's business and the impact of unforeseen economic changes, such as interest rates, or in other external economic and political factors over which the Company has no control. The reader is also directed to the Company's periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company's results of operations and financial condition. Forward-looking statements are not guarantees as actual results could differ materially from those expressed or implied in forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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