8-KOther EventsExhibits & Filings

Burlington Stores, Inc. 8-K Report, Corporate Update (Sep 1, 2021)

Filed September 1, 2021For Securities:BURL

Summary

Burlington Stores, Inc. (BURL) announced on August 31, 2021, that it has entered into privately negotiated exchange agreements with certain holders of its 2.25% Convertible Senior Notes due 2025. This transaction involves the exchange of approximately $146.4 million in aggregate principal amount of these notes for $87.0 million in cash and 459,944 shares of the Company's common stock. The exchange is expected to close on September 9, 2021. This exchange effectively reduces the Company's convertible debt outstanding and results in the issuance of new shares. Investors should note the impact on the company's capital structure, including a reduction in debt obligations and an increase in outstanding equity. The terms suggest a settlement price that is favorable to the company, as it is using a combination of cash and stock, rather than solely cash, to retire the debt.

Key Highlights

  • 1Burlington Stores entered into exchange agreements to retire a portion of its 2.25% Convertible Senior Notes due 2025.
  • 2Approximately $146.4 million in principal amount of convertible notes will be exchanged.
  • 3The exchange consideration includes $87.0 million in cash and 459,944 shares of Burlington's common stock.
  • 4This transaction will reduce the outstanding convertible debt balance.
  • 5The exchange will result in the issuance of new common stock, diluting existing shareholders slightly.
  • 6The closing of these transactions is anticipated on September 9, 2021, subject to customary conditions.

Frequently Asked Questions

The main purpose of these exchange agreements is for Burlington Stores to reduce its outstanding convertible debt. By exchanging the notes for cash and company stock, the company lowers its debt obligations and associated interest payments.

The exchange involves issuing 459,944 shares of Burlington's common stock. This issuance will slightly increase the total number of outstanding shares, which could lead to a minor dilution in earnings per share for existing shareholders.

This is primarily a debt retirement transaction. The company is using cash and issuing new stock to settle its convertible debt obligations, rather than repurchasing its own shares from the open market.

Financially, Burlington Stores will reduce its long-term debt by approximately $146.4 million. This will also decrease future interest expenses related to these notes. However, the company incurs an immediate cash outflow of $87.0 million and increases its equity base.