Builds on Recent Launch of New At-the-Market
Offering
Terminates Previously Issued Warrants for
Series A Convertible Preferred Stock
Provides Business Update
UNION,
N.J., March 30, 2023 /PRNewswire/ -- Bed
Bath & Beyond Inc. (Nasdaq: BBBY) (the "Company") announced
today that concurrent with a new, At-The-Market offering program
("ATM Program") launched earlier today, the Company has also
entered into a common stock purchase agreement and a registration
rights agreement (collectively, "Committed Equity Facility") with
B. Riley Principal Capital II, LLC ("BRPC") to provide additional
capital to the Company. Simultaneously, the Company is
terminating its previous public equity offering and all outstanding
warrants for Series A Convertible Preferred Stock associated with
that offering. The Company intends to file a registration
statement on Form S-1 with respect to the Committed Equity
Facility, upon the effectiveness of which the Company would be
permitted to begin selling additional securities pursuant to its
terms.
The potential net proceeds from these financing transactions
will be used immediately to fulfill conditions set forth in an
amendment to the Company's credit facility filed earlier
today. The Company expects to utilize its amended credit
facility to enable its strategic initiatives in fiscal 2023, such
as investing in merchandise inventory, which will be further
supported by a realigned store footprint and cost structure.
Sue Gove, President & CEO of
Bed Bath & Beyond Inc. said, "The actions we've taken have
enabled us to create the necessary financial runway to begin
restoring our iconic Bed Bath & Beyond and buybuy BABY
businesses. We have raised $360
million of equity capital since the beginning of February,
cured our default under our credit agreement, repaid material
amounts of our ABL facility, completed our interest payment for our
Senior Notes, all while jumpstarting our turnaround plans."
Ms. Gove continued, "The customer experience remains our top
priority and we are making meaningful progress to improve our
business and calibrate to customer demand. In addition to
leveraging our recent capital to reinvest in high demand inventory,
we are also developing a third-party consignment program that will
allow us to fortify our product assortments by expanding
merchandise availability from key supplier partners. We are
on pace to achieve our target of 360 top-performing Bed Bath &
Beyond stores by the end of April, in addition to our existing 120
buybuy BABY stores. In conjunction with our online business,
these productive stores are pivotal to our omni-channel strategy
and future profitability."
Ms. Gove concluded, "As demonstrated by our plans for additional
equity capital, our work remains focused on creating operational
and financial avenues for further progress. We believe
today's launch of the ATM Program will expand the reach of our
equity program, and accelerate the return of our nationally
recognized Bed Bath & Beyond and buybuy BABY brands back to
prominence."
As of March 27, 2023, the Company
had a total of approximately 435 million shares of common stock
issued, and approximately 295 million shares of common stock
available for issuance.
In conjunction with today's business update, the Company is
providing the following preliminary financial results for the
fiscal 2022 fourth quarter (ended February
25, 2023):
- Net Sales of approximately $1.2
billion
- Comparable Sales decline in the 40% to 50% range¹
- Continuation of negative operating losses
- Modest free cash flow usage
The Company has not yet completed its fiscal year 2022 fourth
quarter and full year financial close and plans to provide its full
financial results for the fiscal 2022 fourth quarter and full year
at the end of April 2023. Until that time, the preliminary
results described in this press release are estimates only and
remain subject to change and finalization.
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(1)
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Comparable Sales
reflects the year-over-year change in sales from the Company's
retail channels, including stores and digital, that have been
operating for twelve full months following the opening period
(typically six to eight weeks). Comparable Sales excludes the
impact of the Company's store network optimization
program.
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About the Company
Bed Bath & Beyond Inc. and subsidiaries (the "Company") is
an omnichannel retailer that makes it easy for our customers to
feel at home. The Company sells a wide assortment of merchandise
primarily in the Home and Baby markets. Additionally, the Company
is a partner in a joint venture which operates retail stores in
Mexico under the name Bed Bath
& Beyond.
The Company operates websites at bedbathandbeyond.com and
buybuybaby.com.
Non-GAAP Information
This release contains certain non-GAAP information, including
Free Cash Flow. Non-GAAP information is intended to provide
visibility into the Company's core operations and excludes special
items, including non-cash impairment charges related to certain
store-level assets and tradenames, loss on sale of businesses, loss
on the extinguishment of debt, charges recorded in connection with
the restructuring and transformation initiatives, which includes
accelerated markdowns and inventory reserves related to the planned
assortment transition to Owned Brands and costs associated with
store closures related to the Company's fleet optimization and the
income tax impact of these items. The Company's definition and
calculation of non-GAAP measures may differ from that of other
companies. Non-GAAP financial measures should be viewed in addition
to, and not as an alternative for, the Company's reported GAAP
financial results. The Company is not providing a reconciliation of
its forward looking quarter ended February
25, 2023 non-GAAP preliminary expected results or its fiscal
year 2023 guidance with respect to Free Cash Flow because it does
not currently have sufficient information to accurately estimate
all of the variables and individual adjustments for such
reconciliation. As such, the Company cannot estimate on a
forward-looking basis without unreasonable effort the impact these
variables and individual adjustments will have on its reported
results.
Forward-Looking Statements
This press release contains a number of forward-looking
statements. Words such as "expect," "will," "working," "plan" and
variations of such words and similar future or conditional
expressions are intended to identify forward-looking statements.
These forward-looking statements reflect the Company's current
views with respect to, among other things, future events. These
forward-looking statements are not guarantees of future results and
are subject to a number of risks and uncertainties, many of which
are difficult to predict and beyond the Company's control.
Important factors that may cause actual results to differ
materially from those in the forward-looking statements include,
but are not limited to, the ability to obtain shareholder approval
of a reverse split proposal, which is required to enable the
Company to make full use of the ATM Program and any of the
Committed Equity Facility; ATM Program and the Committed Equity
Facility and the use of proceeds therefrom; the price of our Common
Stock at any given time; risks related to the failure to
receive the full amount of gross proceeds from the Company's
financing transactions; the Company's ability to maintain access to
its credit agreement; the Company's ability to deliver and execute
on its turnaround plans; the Company's potential need to seek
additional strategic alternatives, including restructuring or
refinancing of its debt, seeking additional debt or equity capital,
reducing or delaying its business activities and strategic
initiatives, or selling assets, other strategic transactions and/or
other measures, including obtaining relief under the U.S.
Bankruptcy Code, and the terms, value and timing of any transaction
resulting from that process; the Company's ability to finalize or
fully execute actions and steps that would be probable of
mitigating the existence of "substantial doubt" regarding the
Company's ability to continue as a going concern; and the Company's
ability to increase cash flow to support the Company's operating
activities and fund its obligations and working capital needs, and
the other risk factors described in the Company's filings with the
SEC, including the factors set forth under the section entitled
"Risk Factors" in the Company's Annual Report on Form 10-K for the
year ended February 26, 2022, the
Company's Quarterly Report on Form 10-Q for the quarter ended
August 27, 2022, the Company's
Quarterly Report on Form 10-Q for the quarter ended November 26, 2022, Exhibit 99.3 to the Company's
Current Report on Form 8-K filed on February
6, 2023 and the Company's Current Report on Form 8-K filed
on February 7, 2023. The Company
disclaims and does not undertake any obligation to update or revise
any forward-looking statement in this press release, except as
required by applicable law or regulation.
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SOURCE Bed Bath & Beyond