According to an 8K filed with the SEC, Wells Fargo served as trustee for the sale of $300 million of 6.375% senior notes due in 2025 by Wolverine Worldwide, which also entered into an amendment to its senior credit facility, including $171 million in aggregate principal amount of incremental 364-day term loans.
Wolverine Worldwide implemented several measures earlier this year to prioritize liquidity, cash preservation and asset management in response to the impact of the COVID-19 pandemic. These measures included drawing down the remainder of its revolving credit line, reducing planned inventory receipts, postponing certain capital expenditures, suspending further share repurchases and reducing planned operating expenses by an estimated $100 million for the remainder of 2020. The company expects these cash preservation initiatives to exceed $500 million, positioning the company to deliver $150 million to $200 million of operating cash flow in 2020.
The amendment to the senior credit facility provides enhanced flexibility within the company’s existing covenant requirements, while the sale of the notes provides longer-term financing. The company is using the net proceeds from the new incremental term loans and notes offering primarily to repay borrowings under its revolving credit facility, adding borrowing capacity if needed for future operations.
“With these actions, the company’s total liquidity, including cash and available borrowing on the revolver, increased to approximately $940 million, up from $483 million at the end of the first quarter of 2020,” Mike Stornant, senior vice president and CFO of Wolverine Worldwide, said. “Our agile business model and lean fixed cost structure remain a key advantage in this environment, and our investment in eCommerce continues to drive accelerated, profitable growth in that channel. Given our anticipated strong positive operating cash flow in 2020 combined with increased liquidity from these recent actions, we are confident in the company’s ability to navigate the current environment and take advantage of the opportunities that will emerge.”
Wolverine Worldwide is a marketer and licensor of branded casual, active lifestyle, work, outdoor sport, athletic, children’s and uniform footwear and apparel.
