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American Apparel reports fiscal 2007 Q1 same-store sales up

07 Apr '07

3 min read

Endeavor Acquisition Corp announced that it has been advised by American Apparel that American Apparel will post at least $30 million for the fiscal year ending December 31, 2006 in adjusted Earnings Before Interest, Taxes, Depreciation, Amortization after giving effect to one-time charges (“pro forma adjusted EBITDA”).

Under the terms of the merger agreement, American Apparel was required to demonstrate pro forma adjusted EBITDA of at least $30 million for the fiscal year ending December 31, 2006. This pro forma calculation includes certain one-time adjustments above the original $5 million basket agreed to in the merger agreement to accommodate an approximate one-time $3.5 million inventory obsolescence reserve established in connection with the 2006 audit and proposed merger.

Other one-time charges agreed to in the merger agreement include deferred rent, legal and litigation expenses, and workers' compensation adjustments. Details on the exact amount and composition of the pro forma adjusted EBITDA will be filed along with the 2006 audited financial statements in the Merger Proxy Statement. It is anticipated that the Merger Proxy Statement will be filed in May 2007.

“We look forward to the successful completion of the merger once the proxy statement has been reviewed by the Securities and Exchange Commission and our stockholders vote on the proposed merger later this year,” said Eric Watson, Chairman of Endeavor.

Endeavor also announced that American Apparel had advised it that same-store sales for American Apparel's fiscal first quarter ended March 31, 2007 increased 17%. The company defines same-store sales as sales for stores open for more than one year.

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