CORTE MADERA, Calif.--(BUSINESS WIRE)--RH (NYSE:RH) today announced it has repaid the balance of its $350 million in 0.00% Convertible Senior Notes due 2019 at maturity. The Company used existing cash balances and borrowings under its revolving credit facility to complete the repayment on June 17, 2019 as expected.
CEO Gary Friedman commented, “Looking back, had we not been opportunistic in responding to favorable market conditions through our convertible notes financings in 2014 and 2015, we would not have been in a position to repurchase $1 billion of our stock when it was undervalued during 2017, which has proven to be an excellent allocation of capital for the long-term benefit of our shareholders. We are regularly evaluating various low interest rate financing alternatives and expect to follow the same opportunistic capital allocation approach in the future regarding both sources and uses of capital.”
As previously reported, the Company continues to expect (i) to repay its $300 million of 0.00% Convertible Senior Notes due 2020 at maturity in July, 2020 with internally generated cash as well as borrowing under its existing credit facilities, and (ii) to end its fiscal 2019 year with net debt to trailing twelve month Adjusted EBITDA of approximately 2.0x.
RH (NYSE: RH) is a curator of design, taste and style in the luxury lifestyle market. The Company offers its collections through its retail galleries across North America, the Company’s multiple Source Books, and online at RH.com, RHModern.com, RHBabyandChild.com, RHTeen.com and Waterworks.com.
NON-GAAP FINANCIAL MEASURES
To supplement its condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles (“GAAP”), the Company uses various non-GAAP financial measures including EBITDA and Adjusted EBITDA (collectively, “non-GAAP financial measures”). We compute these measures by adjusting the applicable GAAP measures to remove the impact of certain recurring and non-recurring charges and gains and the tax effect of these adjustments. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. The non-GAAP financial measures used by the Company in this press release may be different from the non-GAAP financial measures, including similarly titled measures, used by other companies.
For more information on the Company’s reports of financial results that include these and other non-GAAP financial measures, please see the Company’s previously reported financial results which include a Reconciliation of GAAP to non-GAAP Financial Measures tables regarding previously reported non-GAAP financial measures included EBITDA and Adjusted EBITDA. Such accompanying tables include details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
This release contains forward-looking statements within the meaning of the federal securities laws, including without limitation, statements regarding: our expectations regarding sources and uses of capital including (i) remaining opportunistic with respect to both sources and uses of capital, (ii) that the repurchase $1 billion of our stock in 2017 has proven to be an excellent allocation of capital for the long-term benefit of our shareholders as well as our $1 billion in share repurchases remaining an excellent allocation of capital for the long-term benefit of our shareholders; our expectation that we will end fiscal 2019 with net debt to trailing twelve month Adjusted EBITDA of approximately 2.0x; our expectation regarding repayment of our $300 million of 0.00% Convertible Senior Notes due 2020 at maturity in July, 2020 with internally generated cash as well as borrowing under our existing credit facilities; and any statements or assumptions underlying any of the foregoing.
You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future events. We cannot assure you that future developments affecting us will be those that we have anticipated. Important risks and uncertainties that could cause actual results to differ materially from our expectations include, among others, risks related to our dependence on key personnel and any changes in our ability to retain key personnel; successful implementation of our growth strategy; risks related to the number of new business initiatives we are undertaking; successful implementation of our growth strategy including our real estate transformation and the number of new gallery locations that we seek to open and the timing of openings; uncertainties in the current performance of our business including a range of risks related to our operations as well as external economic factors; general economic conditions and the housing market as well as the impact of economic conditions on consumer confidence and spending; changes in customer demand for our products; our ability to anticipate consumer preferences and buying trends, and maintaining our brand promise to customers; decisions concerning the allocation of capital; factors affecting our outstanding convertible senior notes or other forms of our indebtedness; our ability to anticipate consumer preferences and buying trends, and maintain our brand promise to customers; changes in consumer spending based on weather and other conditions beyond our control; risks related to the number of new business initiatives we are undertaking; strikes and work stoppages affecting port workers and other industries involved in the transportation of our products; our ability to obtain our products in a timely fashion or in the quantities required; our ability to employ reasonable and appropriate security measures to protect personal information that we collect; our ability to support our growth with appropriate information technology systems; risks related to our sourcing and supply chain including our dependence on imported products produced by foreign manufacturers and risks related to importation of such products including risks related to tariffs, the countermeasures and mitigation steps that we adopt in response to tariffs and other similar issues, as well as those risks and uncertainties disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in RH’s most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, and similar disclosures in subsequent reports filed with the SEC, which are available on our investor relations website at ir.rh.com and on the SEC website at www.sec.gov. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.