8-KRegulation FDOther EventsExhibits & Filings

Burlington Stores, Inc. 8-K Report, Regulation FD Disclosure (Apr 13, 2020)

Filed April 13, 2020For Securities:BURL

Summary

Burlington Stores, Inc. (BURL) filed an 8-K on April 13, 2020, to provide an operational update in response to the COVID-19 pandemic and to announce significant debt offerings. The company temporarily closed all store locations, corporate offices, and distribution centers, and furloughed most store and distribution center associates. Senior executives have taken salary reductions, and the CEO has forgone his salary. Health benefits for furloughed associates remain covered. The company also announced the commencement of private offerings for $700 million in convertible senior notes due 2025 and $300 million in senior secured notes due 2025. These offerings are intended to bolster financial liquidity and fund general corporate purposes. Management believes the company has adequate liquidity for medium-term needs, even without revenue beyond fiscal 2020, especially after the proceeds from these offerings are received.

Key Highlights

  • 1Burlington temporarily closed all stores nationwide, corporate offices, and distribution centers due to COVID-19.
  • 2Most store and distribution center associates have been temporarily furloughed.
  • 3CEO has forgone salary, and senior executive team salaries are reduced by 50%.
  • 4Company is maintaining health benefits for furloughed associates.
  • 5Burlington is launching private offerings for $700 million in convertible senior notes due 2025.
  • 6Burlington is also launching private offerings for $300 million in senior secured notes due 2025.
  • 7The company expects a material adverse impact on its business, financial position, and cash flows in Fiscal 2020 due to the pandemic.

Frequently Asked Questions

Burlington has temporarily closed all its store locations, buying and corporate offices, and distribution centers. They have also instituted work-from-home measures for corporate associates and temporarily furloughed most store and distribution center associates. The company is providing financial support and continuing health benefits for impacted associates.

The company is raising capital through offerings of $700 million in convertible senior notes and $300 million in senior secured notes. Additionally, Burlington is reducing inventory receipts, managing working capital, delaying payables, cutting capital expenditures, working with landlords on rent payments, and aggressively reducing operating expenses.

Burlington expects the COVID-19 pandemic and related economic disruption to have a material adverse impact on its business, consolidated results of operations, consolidated financial position, and consolidated cash flows in Fiscal 2020. The duration and severity of the pandemic, its impact on consumer demand, and the timing of resuming normal operations are highly uncertain.

In response to the business disruption, the CEO will not be taking a salary, and the rest of the senior executive team has agreed to a 50% salary reduction. The finalization of annual incentive bonus payments and merit pay increases for Fiscal 2020 have also been delayed.