Concurrent with a new at-the-market offering program, Bed Bath & Beyond entered into a common stock purchase agreement and a registration rights agreement (collectively, the committed equity facility) with B. Riley Principal Capital.
Simultaneously, Bed Bath & Beyond is terminating its previous public equity offering and all outstanding warrants for Series A convertible preferred stock associated with that offering. The company intends to file a registration statement on Form S-1 with respect to the committed equity facility upon the effectiveness of which the company would be permitted to begin selling additional securities pursuant to its terms.
Bed Bath & Beyond will use the potential net proceeds from these financing transactions to fulfill conditions set forth in an amendment to the company’s credit facility filed earlier this week. The company expects to utilize its amended credit facility to enable its strategic initiatives in fiscal 2023, such as investing in merchandise inventory, which will be further supported by a realigned store footprint and cost structure.
“The actions we’ve taken have enabled us to create the necessary financial runway to begin restoring our iconic Bed Bath & Beyond and buybuy BABY businesses,” Sue Gove, president and CEO of Bed Bath & Beyond, said. “We have raised $360 million of equity capital since the beginning of February, cured our default under our credit agreement, repaid material amounts of our ABL facility, completed our interest payment for our senior notes, all while jumpstarting our turnaround plans.
“The customer experience remains our top priority and we are making meaningful progress to improve our business and calibrate to customer demand. In addition to leveraging our recent capital to reinvest in high demand inventory, we are also developing a third-party consignment program that will allow us to fortify our product assortments by expanding merchandise availability from key supplier partners. We are on pace to achieve our target of 360 top-performing Bed Bath & Beyond stores by the end of April, in addition to our existing 120 buybuy BABY stores. In conjunction with our online business, these productive stores are pivotal to our omnichannel strategy and future profitability.
“As demonstrated by our plans for additional equity capital, our work remains focused on creating operational and financial avenues for further progress. We believe today’s launch of the ATM program will expand the reach of our equity program and accelerate the return of our nationally recognized Bed Bath & Beyond and buybuy BABY brands back to prominence.”
As of March 27, Bed Bath & Beyond had a total of approximately 435 million shares of common stock issued and approximately 295 million shares of common stock available for issuance.
In conjunction with today’s business update, Bed Bath & Beyond providing the following preliminary financial results for the fiscal 2022 fourth quarter (ended Feb. 25, 2023):
- Net sales of approximately $1.2 billion
- Comparable sales decline in the 40% to 50% range
- Continuation of negative operating losses
- Modest free cash flow usage
Bed Bath & Beyond has not yet completed its fiscal year 2022 fourth quarter and full year financial close and plans to provide its full financial results for the fiscal 2022 fourth quarter and full year at the end of April.