Hartmarx Corporation (NYSE: HMX) today announced the early retirement of the remaining $10.3 million of outstanding 12.5% Senior Unsecured Notes, effective January 21, 2003. These Notes, due on September 15, 2003, are currently callable in whole or in part at par and without penalty.
Homi Patel, president and chief executive officer, stated, "In November, 2002, we retired $15 million of the Senior Unsecured Notes and with this action we will have completed our previously stated intention to retire all of the Notes in advance of their September 2003 maturity. We closed our fiscal year on November 30 with total debt at $123 million, over $48 million lower than the prior year-end, and this early retirement enables us to lower our borrowing costs further. Based on current borrowing rates under the LIBOR and prime based senior credit facility of about 4%, the cash interest savings during fiscal 2003 from this early retirement will be approximately $.5 million. Upon full retirement of the $25.3 million of Senior Unsecured Notes and having refinanced our principal senior credit facility and repaid a $15 million 10.25% term loan in August, 2002, we anticipate that interest costs for 2003 will be at least $4 million lower than 2002. We expect the Company to report profitability for both the fourth quarter and full year ended November 30, 2002, when operating results are announced in January," Mr. Patel concluded.
The early retirement will result in an acceleration of unamortized debt discount and fees of approximately $.7 million which otherwise would have been amortized to expense during the second, third and fourth quarters of fiscal 2003, but which will now be reflected in the Company's first quarter of fiscal 2003 ending February 28, 2003.
Hartmarx produces and markets business, casual and golf apparel under its own brands including Hart Schaffner & Marx, Hickey-Freeman, Palm Beach, Coppley, Cambridge, Keithmoor, Racquet Club, Naturalife, Pusser's of the West Indies, Royal, Brannoch, Riserva, Sansabelt, Barrie Pace and Hawksley & Wight. In addition, Hartmarx has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Tommy Hilfiger, Kenneth Cole, Burberrys men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Evan-Picone, Pierre Cardin, Perry Ellis, KM by Krizia, and Daniel Hechter. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs.
The comments set forth above contain forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements could be significantly impacted by such factors as the level of consumer spending for men's and women's apparel, the prevailing retail environment, the Company's relationships with its suppliers, customers, licensors and licensees, actions of competitors that may impact the Company's business and the impact of unforeseen economic changes, such as interest rates, or in other external economic and political factors over which the Company has no control. The reader is also directed to the Company's periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company's results of operations and financial condition. Forward-looking statements are not guarantees as actual results could differ materially from those expressed or implied in forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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