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Ronky Brands, Inc. announced a comprehensive debt refinancing agreement with Bank of America to enhance its financial profile, cash flow, and liquidity. The new agreement includes an upsized $175 million revolving credit facility and a $50 million term facility, generating net savings of $2.9 million for 2024 and $4.4 million annually from 2025. The transactions extend debt maturities to April 2029, simplifying the capital structure and increasing financial flexibility.
Ronky Brands, Inc. ha annunciato un accordo completo di rifinanziamento del debito con Bank of America per migliorare il suo profilo finanziario, il flusso di cassa e la liquidità. Il nuovo accordo include un'impianto di credito rotativo aumentato a $175 milioni e un impianto a termine di $50 milioni, generando un risparmio netto di $2,9 milioni per il 2024 e $4,4 milioni annui a partire dal 2025. Le transazioni estendono la scadenza del debito fino ad aprile 2029, semplificando la struttura del capitale e aumentando la flessibilità finanziaria.
Ronky Brands, Inc. ha anunciado un acuerdo integral de refinanciación de deuda con el Bank of America para mejorar su perfil financiero, flujo de caja y liquidez. El nuevo acuerdo incluye una facilidad de crédito renovable incrementada a $175 millones y una facilidad a término de $50 millones, generando un ahorro neto de $2.9 millones para 2024 y $4.4 millones anuales a partir de 2025. Las transacciones extienden los vencimientos de la deuda hasta abril de 2029, simplificando la estructura de capital y aumentando la flexibilidad financiera.
Ronky Brands, Inc.는 자사의 재무 프로필, 현금 흐름 및 유동성을 개선하기 위해 Bank of America와 종합적인 부채 재조정 계약을 발표했습니다. 새로운 계약에는 1억 7천 5백만 달러의 상향된 회전 신용 시설과 5천만 달러의 기간 시설이 포함되어 있으며, 2024년에 290만 달러, 2025년부터 매년 440만 달러의 순 절감을 생성합니다. 이 거래들은 2029년 4월까지 부채 만기를 연장시켜 자본 구조를 단순화하고 재무 유연성을 증가시킵니다.
Ronky Brands, Inc. a annoncé un accord complet de refinancement de dette avec Bank of America afin d'améliorer son profil financier, son flux de trésorerie et sa liquidité. Le nouvel accord comprend une facilité de crédit renouvelable augmentée à 175 millions de dollars et une facilité à terme de 50 millions de dollars, générant des économies nettes de 2,9 millions de dollars pour 2024 et de 4,4 millions de dollars annuellement à partir de 2025. Les transactions prolongent les échéances de la dette jusqu'en avril 2029, simplifiant la structure du capital et augmentant la flexibilité financière.
Ronky Brands, Inc. hat eine umfassende Schuldenrefinanzierungsvereinbarung mit der Bank of America bekanntgegeben, um sein Finanzprofil, den Cashflow und die Liquidität zu verbessern. Die neue Vereinbarung umfasst eine erhöhte revolvierende Kreditfazilität von 175 Millionen Dollar und eine Kreditfazilität über 50 Millionen Dollar auf Zeit, was Nettoeinsparungen von 2,9 Millionen Dollar für 2024 und 4,4 Millionen Dollar jährlich ab 2025 generiert. Die Transaktionen verlängern die Fälligkeiten der Schulden bis April 2029, vereinfachen die Kapitalstruktur und erhöhen die finanzielle Flexibilität.
Positive
Enhanced financial profile through debt refinancing
Increased cash flow and liquidity position
Upsized and extended credit facility for future growth strategies
Expected net savings of $2.9 million in 2024 and $4.4 million annually from 2025
Extended debt maturities to April 2029
Negative
None.
Insights
Rocky Brands' recent debt refinancing could indicate a strategic move to optimize the company's capital structure and improve liquidity. By upsizing and extending their Asset-Based Lending (ABL) facility and retiring the existing senior secured term loan, the company anticipates net savings. For the retail investor, these savings translate to improved cash flow which could be directed towards innovative growth strategies or enhancing shareholder value. However, it's imperative to scrutinize the associated fees and the long-term implications of such refinancing, as the immediate financial benefits must be weighed against potential increased interest costs over the extended loan period.
Extending debt maturities typically provides a company with more breathing room to manage its liabilities and suggests confidence from lenders in the company's stability and growth prospects. The extension from March 2026 to April 2029 may reduce pressure on Rocky Brands' short-term cash flow, but investors need to consider the aggregate cost of capital. By retiring the senior secured term loan and opting for an ABL facility, the company may be signaling a shift towards a more flexible financing structure that can adapt to variable capital needs, which could be particularly beneficial for managing inventory and receivables in a retail environment.
Investors should regard Rocky Brands' refinancing within the context of the broader footwear and apparel industry, which often requires agile financial structures to react to market trends and consumer demands effectively. The company's focus on reducing debt and right-sizing inventory, as stated by the COO/CFO, indicates an effort to align operational efficiencies with financial strategy. From an investment perspective, the ability to pivot and manage finances in a dynamic market is pivotal. The real test will be how these financial maneuvers translate into market performance and competitive positioning within the industry.
New Terms Enhance Company’s Financial Profile for Continued Execution of Growth Strategies
NELSONVILLE, Ohio--(BUSINESS WIRE)--
Rocky Brands, Inc. (NASDAQ: RCKY), a leading designer, manufacturer and marketer of premium quality footwear and apparel, today announced the signing of a definitive debt refinance agreement with Bank of America, as agent. The new agreement, which amends and restates the Company’s existing revolving credit facility, will serve to enhance the Company’s cash flow and liquidity profile while permitting a more simplified capital structure.
Transaction Summary
The upsized, amended and extended ABL facility, agented by Bank of America, is comprised of a $175 million revolving credit facility and a $50 million term facility, amending and restating the Company’s existing $175 million revolving credit facility with Bank of America.
Proceeds from the refinance were used to retire the Company’s existing senior secured term loan facility agented by TCW Asset Management Company, LLC as of April 26, 2024.
The combined transactions are expected to generate net savings of approximately $2.9 million for the remainder of 2024, offset by fees and amortization associated with the retirement of the senior secured term loan facility of approximately $2.6 million. In 2025, the combined transactions are expected to generate a combined annualized savings of approximately $4.4 million.
The combined transactions extend the Company’s debt maturities from March 2026 to April 2029.
“Throughout the past year, we have been focused on reducing debt and right-sizing inventory to strengthen the Company’s balance sheet,” said Tom Robertson, Chief Operating Officer and Chief Financial Officer. “We are pleased to further enhance our financial profile through this expansion of our existing relationship with Bank of America, which not only simplifies the capital structure, but also offers increased financial flexibility through more favorable terms. Looking forward, we believe these actions will position Rocky Brands to more effectively execute its growth strategies and increase value for shareholders.”
The Company will provide additional details regarding the terms and conditions of the amended ABL facility in its Current Report on Form 8-K to be filed with the Securities and Exchange Commission (SEC).
Safe Harbor Language
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Those statements include, but may not be limited to, all statements regarding intent, beliefs, expectations, projections, forecasts, and plans of the Company and its management and include statements in this press release regarding the expectations of the debt refinancing to generate interest savings of approximately $2.9 million for the remainder of 2024, offset by fees and amortization associated with the retirement of the senior secured term loan facility of approximately $2.6 million and the expectations of the debt refinancing to generate a combined annualized savings of approximately $4.4 million in 2025. These forward-looking statements involve numerous risks and uncertainties, including, without limitation, risks related to interest rate changes, the amount of the Company’s indebtedness, and the various risks inherent in the Company’s business as set forth in periodic reports filed with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K for the year ended December 31, 2023 (filed March 15, 2024). One or more of these factors have affected historical results, and could in the future affect the Company’s businesses and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation or warranty by the Company or any other person that the objectives and plans of the Company will be achieved. All forward-looking statements made in this press release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.
About Rocky Brands, Inc.
Rocky Brands, Inc. is a leading designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well recognized brand names. Brands in the portfolio include Rocky®, Georgia Boot®, Durango®, Lehigh®, The Original Muck Boot Company®, XTRATUF®, and Ranger®. More information can be found at RockyBrands.com.
