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Mothers Work redeems $25 mn principal amount of senior notes
12 Dec '06
2 min read
Mothers Work Inc announced that on December 8, 2006 it completed the previously announced redemption of $25 million principal amount of its outstanding 11 1/4% Senior Notes in accordance with the prior approval of its Board of Directors. The redemption was at a price of 105.625% of principal amount, plus accrued interest, pursuant to the optional redemption provisions of the Senior Notes.
This $25 million redemption of Senior Notes is in addition to the previously announced and completed repurchase of $10 million principal amount of the Senior Notes during August and September of 2006.
As previously announced, the Company expects the $25 million redemption of Senior Notes will result in an after-tax charge of approximately $0.20 to $0.21 per share in the first quarter of fiscal 2007, and will result in subsequent increased after-tax earnings of approximately $0.16 to $0.17 per share annually, yielding expected increased after-tax earnings of approximately $0.13 per share for fiscal 2007 reflecting less than a full year benefit.
After giving effect to both the $25 million repurchase and the $10 million repurchase, the Company has $90 million remaining outstanding principal amount of the original $125 million of Senior Notes.
Rebecca Matthias, President and Chief Operating Officer of Mothers Work, noted, "We are very proud of our strong cash flow generation, which has enabled us to repay another $25 million of our debt. We strongly believethis debt repayment is a very attractive use of our excess cash, which is accretive to ongoing earnings, reduces our financial leverage, and shows our commitment to continuing to increase shareholder value while maintaining significant financial liquidity."
This $25 million redemption of Senior Notes is in addition to the previously announced and completed repurchase of $10 million principal amount of the Senior Notes during August and September of 2006.
As previously announced, the Company expects the $25 million redemption of Senior Notes will result in an after-tax charge of approximately $0.20 to $0.21 per share in the first quarter of fiscal 2007, and will result in subsequent increased after-tax earnings of approximately $0.16 to $0.17 per share annually, yielding expected increased after-tax earnings of approximately $0.13 per share for fiscal 2007 reflecting less than a full year benefit.
After giving effect to both the $25 million repurchase and the $10 million repurchase, the Company has $90 million remaining outstanding principal amount of the original $125 million of Senior Notes.
Rebecca Matthias, President and Chief Operating Officer of Mothers Work, noted, "We are very proud of our strong cash flow generation, which has enabled us to repay another $25 million of our debt. We strongly believethis debt repayment is a very attractive use of our excess cash, which is accretive to ongoing earnings, reduces our financial leverage, and shows our commitment to continuing to increase shareholder value while maintaining significant financial liquidity."
Mothers Work Inc
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