Orchard Supply Hardware Stores Corporation Provides Update on Term Loan Lender Negotiations and First Quarter Fiscal 2013 Comparable Store Sales
60-Day Extension to June 30, 2013 for Date to Reach Agreement with Term Loan Lenders
First Quarter Fiscal 2013 Comparable Store Sales Expected to Increase 9.0% to 11.0%
SAN JOSE, Calif.--(BUSINESS WIRE)-- Orchard Supply Hardware Stores Corporation (NAS: OSH) , a neighborhood hardware and garden store focused on paint, repair and the backyard, today provided the following update on its efforts to improve its capital structure and expected comparable store sales for the first quarter of fiscal 2013:
Based on productive discussions with the Company's Term Loan holders, the previous May 1, 2013 date to reach an agreement with respect to a transaction to deleverage, modify or otherwise address the Company's capital structure has been extended to June 30, 2013. The requirement to meet a mutual agreement by this date is a condition of the previously announced waiver which the Company obtained from its current Term Loan lenders on February 14, 2013, related to compliance with the leverage ratio covenant for the fiscal quarter ended February 2, 2013, and the fiscal quarter ending May 4, 2013. The waiver remains in place, which means that the next applicable measurement date for the leverage covenant is August 3, 2013, subject to the Company's continued compliance with the terms and conditions set forth in the waiver.
Based on the strength of sales trends for March and the first three weeks of April, Orchard anticipates comparable store sales(1) for the first quarter ending May 4, 2013 will increase in the range of 9.0% to 11.0%.
As planned, Orchard will mark its entry into Oregon with the grand opening events for its Portland and Tigard stores being held on April 27, 2013. The Company also recently opened its new format store in Yorba Linda, California and plans to hold the grand opening event for this location on May 4, 2013, which will bring Orchard's total number of neighborhood format stores to 16.
"Orchard continues to make solid progress in our efforts to strengthen our capital structure and improve our operating performance," said Mark Baker, President and Chief Executive Officer of Orchard. "Our supplier partners have done a great job helping to keep our inventories at appropriate levels even while we have been outperforming our sales plan through the start of the spring season. Thanks to the hard work of the entire Orchard team and the strong ongoing relationships we have with our supplier partners and our lenders, we continue to provide our loyal customers with the in-stock product offerings and high level of service to which they are accustomed."
"Additionally, we are excited to open two new stores in Oregon this weekend after having recently opened a new neighborhood format store in Yorba Linda, California," Mr. Baker continued. "We are looking forward to continuing the momentum we have experienced year-to-date into the second quarter, in which we have historically achieved our highest sales volume."
For additional information related to the agreement with the Company's Term Loan Lenders, please see the Company's report on Form 8-K which was filed today with the SEC.
(1) Comparable store sales are calculated using sales of stores open at least twelve months and exclude E-commerce.
Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. The Company was founded as a purchasing cooperative in San Jose in 1931. Today the stores average approximately 36,000 square feet of interior selling space and 8,000 square feet of exterior nursery and garden space. As of February 2, 2013, the Company had 89 stores in California. For more information, visit http://osh.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release (including information incorporated or deemed incorporated by reference herein) contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those involving future events and future results that are based on current expectations, estimates, forecasts, and projections as well as the current beliefs and assumptions of the Company's management. Words such as "guidance", "outlook", "believes", "expects", "appears", "may", "will", "should", "intend", "target", "projects", "estimates", "plans", "forecast", "is likely to", "anticipates", or the negative thereof or comparable terminology, are intended to identify such forward looking statements. Any statement that is not a historical fact and other estimates, projections, future trends and the outcome of events that have not yet occurred referenced in this press release, is a forward-looking statement. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, factors discussed under the section entitled "Risk Factors" in the Company's reports filed with the Securities and Exchange Commission. Many of such factors relate to events and circumstances that are beyond the Company's control. These risks and uncertainties and the risks and uncertainties relating to the Company's ability to modify its capital structure include, but are not limited to, consumer demand for the Company's products and services; competition and other factors; continued support from the Company's lenders, vendors, and landlords; the loss of key executives and employees; the risks to the Company and its stakeholders associated with the Company's inability to successfully refinance or modify its Term Loan and/or raise new long term debt and/or equity; and the risks that raising additional capital, refinancing or amending the Company's Term Loan or any other transaction needed to deleverage or address the Company's capital structure could be significantly dilutive to its stockholders or even lead to a complete loss of their investment. You should not place undue reliance on forward-looking statements. The Company does not assume any obligation to update the information contained in this press release.
Investor Relations Contact:
The Blueshirt Group
Christine Greany, 858-523-1732
KEYWORDS: United States North America California
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