BALTIMORE, June 21,
2024 /PRNewswire/ -- Under Armour, Inc. (NYSE:
UA, UAA) today announced that it has entered into an agreement in
principle to resolve the previously disclosed securities class
action litigation pending in the United
States District Court for the District of Maryland (In re Under Armour Securities
Litigation). This lawsuit was originally filed in 2017.
The company has consistently denied the accusations and entered
into this agreement in principle, which is not an admission or
finding of fault or wrongdoing, given the costs and risks inherent
in litigation.
Under the terms of the agreement, Under Armour will pay
$434 million to settle claims brought
on behalf of purchasers of Under Armour's publicly traded shares
from September 16, 2015, to
November 1, 2019. Under Armour has
also agreed to two governance changes for a specified time period
that are detailed in the company's 8-K filed with the SEC.
The settlement, if approved by the court, would resolve all
claims against Under Armour and other defendants in this
matter.
"We firmly believe that our sales practices, accounting
practices, and disclosures were appropriate, and deny any
wrongdoing in this case," said Mehri
Shadman, Under Armour's Chief Legal Officer and Corporate
Secretary. "Today's announcement allows us to move past this more
than seven-year-old matter so we can avoid the ongoing distraction
of litigation and provide certainty to the business at a time when
we are executing on important strategic priorities."
The settlement is subject to definitive documentation and final
court approval.
The company intends to pay the settlement amount through cash on
hand and/or by drawing on its $1.1
billion revolving credit facility. As of March 31, 2024, the company had $859 million of cash and equivalents. As
previously disclosed, Under Armour had recorded an accrual of
$100 million in litigation reserves
related to this matter. As a result of this agreement, the company
now expects the total accrual to reach $434
million during the first quarter of fiscal year 2025.
Following this settlement, the company expects to end fiscal 2025
with approximately $500 million in
cash and cash equivalents and no borrowings outstanding under its
$1.1 billion revolving credit
facility.
About Under Armour, Inc.
Under Armour, Inc., headquartered in Baltimore, Maryland, is a leading inventor,
marketer, and distributor of branded athletic performance apparel,
footwear, and accessories. Designed to empower human performance,
Under Armour's innovative products and experiences are engineered
to make athletes better. For further information, please visit
http://about.underarmour.com.
Forward-Looking Statements
Some of the statements contained in this press release
constitute forward-looking statements. Forward-looking statements
relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends, and similar expressions
concerning matters that are not historical facts, such as
statements in this press release regarding the ability to reach an
agreement on definitive documentation with respect to the proposed
settlement and to obtain final court approval of the proposed
settlement; the ability to satisfy the conditions of the proposed
settlement; the charges expected to be incurred and the source of
funds to be used to resolve these matters; and our expectations
regarding our future cash and liquidity forecasts. The
forward-looking statements in this press release reflect our
current views and assumptions, as of the date of this press
release, about future events. They are subject to risks,
uncertainties, assumptions, and changes in circumstances that may
cause events or our actual activities or results to differ
significantly from those expressed in any forward-looking
statement. Although we believe the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future events, results, actions, activity levels, performance, or
achievements. Readers are cautioned not to place undue reliance on
these forward-looking statements. We undertake no obligation to
update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to
reflect unanticipated events.
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SOURCE Under Armour, Inc.