Everlast Worldwide Inc. Announces the Redemption and Prepayment of Its $26 Million of Series A Preferred Stock and Notes Payable * Company Enters into a $25 Million Senior Secured Four-Year Term

Facility to Refinance and Redeem its Outstanding Preferred Stock and

Notes Payable



* Gain from Redemption of Preferred Stock and Notes Payable is

$2.0 Million; $0.53 Accretive to Common Stockholders on a Diluted Basis



    NEW YORK, Feb. 8 /PRNewswire-FirstCall/ -- Everlast(R) Worldwide Inc.
 (Nasdaq:   EVST), manufacturer, marketer and licensor of sporting goods and
 apparel under the Everlast brand name, today reported the entire redemption of
 its outstanding $20 million Series A Preferred Stock and related rights and
 privileges, including the elimination of the profit-sharing mechanism, the
 retirement of its two board of director seats, and the prepayment of its
 outstanding $6 million in notes payable to one of the former Series A
 preferred stockholders.
     The redemptions and prepayment was accomplished by the Company, and all
 its wholly-owned subsidiaries, entering into a $25 million Senior Secured
 four-year Term Facility with Wells Fargo Century. Under the terms of the
 facility, the Company redeemed its Series A Preferred Stock and prepaid notes
 payable, and all rights and privileges thereof, for an aggregate amount of
 $22.7 million. The remaining $2.3 million of financing from the Term Facility
 was used to pay for financing and professional costs associated with the Term
 Facility. The Term Facility requires quarterly principal installments of
 $635,000, commencing April 30, 2006, with a balloon of $15.5 million due
 December 31, 2009, along with monthly interest on the related outstanding
 principal at prime plus 1% (currently 8.25%). The Term Facility has customary
 covenants in place, including a minimum fixed-charge financial covenant ratio,
 and excess cash-flow recapture. The Term Facility is secured by all tangible
 and intangible assets of the Company and its wholly-owned subsidiaries, as
 defined.
     "The strategic initiatives we have undertaken since 2004 have allowed us
 to refinance our debt and capital structure with a Term Facility under
 favorable terms, which is extremely accretive to the Company and our common
 shareholders," said Seth Horowitz, Chairman and CEO. "I am excited we are able
 to complete and close this Term Facility with a great partner of Everlast for
 the past ten-plus years, Wells Fargo Century, Inc., a wholly-owned subsidiary
 of Wells Fargo Foothill and a Wells Fargo Company, who will continue to
 provide us with our working capital line of credit. Wells Fargo, a
 full-service financial institution ranked at the top in most all financial
 service categories, is the only Aaa rated United States bank by Moody's rating
 service. I want to take this time to thank our Series A Preferred
 Stockholders, especially Ben Nadorf, for being a part of this transaction and
 for his many contributions to the Company over the years. With our recently
 announced licensing agreements complementing our existing licensing and
 sporting goods businesses, we have positioned the Company to succeed in its
 strategic plan of building the Everlast name into one the world's preeminent
 brands."
     Mr. Gary Dailey, CFO added, "The announcement is an important development
 for our Company. The closing of this four-year Term Facility achieves one of
 the Company's financial objectives by simplifying its previously complex
 capital structure and providing an immediate benefit to existing common
 shareholders with a gain on the extinguishment of the Series A Preferred Stock
 and notes payable in the aggregate of $2.0 million, or $0.53 per diluted
 share. The principal and interest debt service outlined in this Term Facility
 will additionally enhance the Company's cash flows, especially in years 2007
 and 2008, where our contractual obligations under the Preferred Stock
 redemption schedule and maturities of notes payable exceeded $19.5 million."
     Thomas V. Pizzo, President and CEO of Wells Fargo Century, commented, "We
 are very pleased to provide this additional financing to Everlast. Every
 client is different, and each situation is unique. We took an entrepreneurial
 view of Everlast's opportunities and structured an appropriate solution."
 
     About Everlast Worldwide Inc.
     Everlast Worldwide Inc. manufactures markets and licenses sporting goods
 and apparel products under the Everlast brand name.  Since 1910, Everlast has
 been the preeminent brand in the world of boxing and is among the most
 dominant brands in the overall sporting goods and apparel industries.  Over
 the past 96 years, Everlast products have become the "Choice of
 Champions(TM)", having been used for training and professional fights by many
 of the biggest names in the sport. Everlast is the market leader in nearly all
 of its product categories, responsible for leading eight of the top ten boxing
 equipment products in sales.  Through its apparel division, Everlast men's
 active wear products are sold to over 20,000 retail locations throughout the
 United States and Canada, including a variety of department stores, specialty
 stores, catalog operations and better mass merchandisers.  In addition to
 producing and marketing the equipment and accessories, Everlast Worldwide Inc.
 licenses its brand to providers of men's and women's sportswear and active
 wear, children's wear, footwear, watches, cardiovascular exercise equipment,
 nutritional foods and gym/duffel bags to name just a few categories.  At the
 retail level, Everlast's licensed products generate over $700 million in
 revenues.  The company's Web site can be found at http://www.everlast.com.
 
     About Wells Fargo & Company
     Wells Fargo & Company is a diversified financial services company with
 $482 billion in assets, providing banking, insurance, investments, mortgage
 and consumer finance to more than 23 million customers from more than 6,200
 stores and the internet (http://www.wellsfargo.com) across North America and
 elsewhere internationally. Wells Fargo Bank, N.A. is the only bank in the
 United States to receive the highest possible credit rating, "Aaa," from
 Moody's Investors Service.
 
     Statements made in this Press Release that are estimates of past or future
 performance are based on a number of factors, some of which are outside of the
 Company's control. Statements made in this Press Release that state the
 intentions, beliefs, expectations or predictions of Everlast Worldwide, Inc.
 and its management for the future are forward-looking statements. It is
 important to note that actual results could differ materially from those
 projected in such forward-looking statements. Information concerning factors
 that could cause actual results to differ materially from those in
 forward-looking statements is contained from time to time in filings of
 Everlast Worldwide with the U.S. Securities and Exchange Commission. Copies of
 these filings may be obtained by contacting Everlast Worldwide or the SEC
 
 

SOURCE Everlast Worldwide Inc.

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.