American Apparel Receives Non-Compliance Notice From NYSE MKT LLC
Sep 24 15
On September 23, 2015, American Apparel, Inc. received a notice from NYSE MKT LLC stating that the Company does not meet continued listing standards of the Exchange as set forth in Part 10 of the NYSE MKT LLC Company Guide. Specifically, the Notice states that, based on the Exchange’s recent review, the Company was not in compliance with Section 1003(a)(iv) of the Company Guide because “it has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the Company will be able to continue operations and/or meet its obligations as they mature.” As a result, the Notice states that the Company has become subject to the procedures and requirements of Section 1009 of the Company Guide. The Notice states that the Company must submit a plan of compliance to the Exchange by October 9, 2015 addressing how it intends to regain compliance with the continued listing standards of Section 1003(a)(iv) of the Company Guide by November 15, 2015. If the plan is accepted by the Exchange, the Notice states that the Company will be subject to periodic reviews including monitoring for compliance with the plan. In the same Notice, the Exchange notified the Company that it is concerned that the Company’s common stock may not be suitable for auction market trading due to its low selling price and, in accordance with Section 1003(f)(v) of the Company Guide, that the Exchange deems it appropriate for the Company to effect a reverse stock split. The Exchange also notified the Company in the Notice that it would receive a separate notice of noncompliance under Section 1003(f)(iv) of the Company Guide if all outstanding listing fees have not been paid by November 7, 2015. The Company is currently reviewing the deficiencies identified in the Notice and has begun the process of preparing a plan of compliance in accordance with the Exchange’s request. The Exchange also states in the Notice that if the Company does not submit a plan or if the plan is not accepted, the Exchange will commence delisting proceedings. There can be no assurance that the Company will be able to submit a plan that satisfactorily addresses the Exchange’s identified deficiencies and concerns in the Notice, if at all.
American Apparel, Inc. Enters into Amended and Restated Credit Agreement
Aug 17 15
On April 4, 2013, American Apparel, Inc. and its domestic subsidiaries entered into an asset-based revolving credit agreement. On August 17, 2015, the lenders under the Existing Credit Agreement assigned all of their rights and obligations under the Existing Credit Agreement and the related loan documents to a syndicate of lenders that includes certain of the Company's existing creditors, including funds associated with Standard General L.P., Monarch Alternative Capital L.P., Coliseum Capital LLC and Goldman Sachs Asset Management, L.P., and Capital One Business Credit Corp. resigned as administrative agent under the Existing Credit Agreement and was replaced by Wilmington Trust, National Association. In addition, on August 17, 2015, the Existing Credit Agreement was amended pursuant to an amended and restated credit agreement among the Company, its domestic subsidiaries, the lenders and Wilmington Trust, National Association. In connection with such amendment, the syndicate of lenders received certain amendment and closing fees and reimbursement of closing expenses. The amended and restated credit agreement provides for a $90.0 million asset based credit facility. Borrowings under the Amended Credit Facility are subject to specified borrowing base requirements. The Amended Credit Facility increases the existing borrowing base formula by $15.0 million, but such $15.0 million increase cannot increase the borrowing base above $60.0 million. Amounts repaid under the Amended Credit Facility cannot be reborrowed. The Amended Credit Facility matures on April 4, 2018, subject to a January 15, 2018 maturity in limited circumstances. Borrowings outstanding under the Existing Credit Agreement will continue under the Amended Credit Facility and bear interest at a LIBOR based rate plus 5.00% or a rate based on the prime rate plus 4.00%. New borrowings under the Amended Credit Facility bear interest at a LIBOR based rate plus 7.00% or a rate based on the prime rate plus 6.00%. The Amended Credit Facility continues to be secured by first-priority liens on the Company's and its domestic subsidiaries' accounts receivable, inventory, cash and certain other assets and second-priority liens on the Company's and its domestic subsidiaries' other assets, in each case subject to certain exceptions and permitted liens. The covenant violations existing at June 30, 2015 were waived under the Amended Credit Facility. The description of the Amended Credit Facility set is necessarily limited and is qualified in its entirety by reference to the full terms and conditions of the Amended Credit Facility as set in the Amended and Restated Credit Agreement, dated as of August 17, 2015, among the Company and its domestic subsidiaries, the lenders party thereto and Wilmington Trust, National Association, as administrative agent. In connection with the Amended Credit Facility, the Company entered into Amendment No. 3 to the Credit Agreement, dated as of May 22, 2013, among the Company and Standard General Master Fund L.P. as lender (the "Standard General Loan Agreement"). Amendment No. 3 amends certain provision of the Standard General Loan Agreement to permit the transaction contemplated by the Amended Credit Facility and provides for the payment of consent fees and certain releases and equity registration rights in favor of Standard General Master Fund L.P. and its affiliates.
American Apparel, Inc. Announces Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended June 30, 2015
Aug 17 15
American Apparel, Inc. announced unaudited consolidated earnings results for the second quarter and six months ended June 30, 2015. For the quarter, net sales were $134,394,000 against $162,397,000 a year ago. The decline in comparable sales was attributable to the lack of new style introduction for the spring and summer selling season. Loss from operations was $12,996,000 against income from operations of $2,580,000 a year ago. Loss before income taxes was $19,159,000 against $15,701,000 a year ago. Consolidated Adjusted EBITDA was $4,110,000 against $15,890,000 a year ago. Adjusted Loss from operations was $4,716,000 against adjusted income from operations of $7,425,000 a year ago.
For the six months, net sales were $258,657,000 against $299,493,000 a year ago. Loss from operations was $35,926,000 against $4,916,000 a year ago. Loss before income taxes was $44,846,000 against $20,693,000 a year ago. Net loss was $45,774,000 against $21,671,000 a year ago. Net loss per share, basic and diluted was $0.26 against $0.14 a year ago. Net cash used in operating activities was $13,963,000 against net cash provided by operating activities of $1,303,000 a year ago. Capital expenditures were $1,942,000 against $7,087,000 a year ago. Consolidated Adjusted LBITDA was $3,816,000 against EBITDA of $16,733,000 a year ago. Adjusted Loss from operations was $18,135,000 against $71,000 a year ago.