Orchard Supply Hardware Receives Approval of First Day Motions Ensuring Business Continuity Throughout Its Restructuring and

  Orchard Supply Hardware Receives Approval of First Day Motions Ensuring
  Business Continuity Throughout Its Restructuring and Sale Process

Business Wire

SAN JOSE, Calif. -- June 19, 2013

Orchard Supply Hardware Stores (NASDAQ:OSH), a neighborhood hardware and
garden store focused on paint, repair and the backyard, today announced that
the U.S. Bankruptcy Court for the District of Delaware has approved all of the
First Day Motions related to its voluntary Chapter 11 process initiated June
17, 2013. These motions collectively will enable the Company to continue
operating its business as usual as it completes its Chapter 11 case.

Among the approved motions, the Court granted Orchard access to $177 million
in debtor in-possession (“DIP”) financing from Wells Fargo Bank, the Company’s
existing ABL lender, and its Term Loan Lenders. This financing, in addition to
Orchard’s ongoing cash flow, will ensure the Company is able to continue
meeting its financial obligations throughout the Chapter 11 case.

The Court also approved motions giving Orchard authority to, among other
things, pay employee wages and benefits as usual throughout the Chapter 11
process, including health and medical benefits, paid time off, expense
reimbursement and other incentive programs as well as maintain its Club
Orchard customer rewards program, continue coupons and promotions, honor its
gift cards and otherwise serve its customers as usual. Additionally, Orchard
was granted approval to accept bids from companies to manage store closing
sales for an initial eight stores, with potential additional stores to be
determined as the Chapter 11 process continues.

“The motions approved today will help ensure we continue to operate our
business as usual and uphold our commitments to all of our stakeholders while
we work to achieve our financial objectives,” said Mark Baker, Orchard
President and Chief Executive Officer. “This is a very important milestone in
the Chapter 11 process, and we thank the Court for its careful consideration
of our requests. We are confident that Orchard is on the right path for
long-term success through the actions we are taking with our business and
certain stores. We are grateful for the support we have received from our
lenders, associates, customers and supplier partners as we work to achieve a
sustainable capital structure for our business.”

Orchard previously announced June 17, 2013, that it has reached an agreement
through which Lowe’s Companies, Inc. will acquire the majority of its assets
for $205 million in cash, plus the assumption of payables owed to nearly all
of Orchard’s supplier partners. To facilitate the sale and restructure its
balance sheet, Orchard filed voluntary Chapter 11 petitions in the United
States Bankruptcy Court for the District of Delaware. The agreement with
Lowe’s comprises the initial stalking horse bid in the Court-supervised
auction process under Section 363 of the Bankruptcy Code.

Under the terms of the agreement, Orchard will operate as a separate,
standalone business at the completion of the sale process, retaining its
brand, management team and associates. The Company also will benefit from the
financial stability of its new corporate parent which, combined with the
benefits of its balance sheet restructuring, will allow Orchard to continue
its repositioning and growth strategy.

Orchard’s customers and suppliers can access additional information about the
Company’s Chapter 11 filing on its dedicated website,
www.OrchardRestructuring.com. Orchard also has established a supplier support
center, which may be reached at 855-529-6819 or suppliers@osh.com.

Orchard is advised in this financial restructuring by Moelis & Company, FTI
Consulting, and DLA Piper.

About Orchard Supply Hardware

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 June 16, 2013 the
Company has 89 stores in California and two stores in Oregon. 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, the ability to conclude the transaction with Lowe’s or another
bidder in the Court-supervised auction process under Section 363 of the
Bankruptcy Code and the challenges and risks associated with operating the
business under Chapter 11 protection. Many of such factors relate to events
and circumstances that are beyond the Company’s control. 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.

Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20130619006257/en/

Contact:

Orchard Media:
Leigh Parrish, FTI Consulting
212-850-5651
leigh.parrish@fticonsulting.com
or
Orchard Investor:
Matt Gross, FTI Consulting
212-850-5659
matthew.gross@fticonsulting.com
 
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