Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On February 2, 2023, the Board of Directors of Bed Bath & Beyond Inc. (the
"Company") appointed Holly Etlin as the Company's Interim Chief Financial
Officer. Laura Crossen, who has acted as the Company's Interim Chief Financial
Officer since September 5, 2022, will resume her role as the Company's Senior
Vice President of Finance and Chief Accounting Officer and continue as the
Company's principal financial officer and principal accounting officer.
Ms. Etlin has over 30 years of experience in providing turnaround services for
companies in the retail, distribution, and consumer products industries,
including her service as Chief Restructuring Officer at Tailored Brands, Inc.
from July 2020 to January 2021. Ms. Etlin has served as a Partner & Managing
Director of AlixPartners since January 2007. AlixPartners provides various
consulting services to the Company.
Ms. Etlin does not have any family relationships with any director, executive
officer or person nominated or chosen by the Company to become a director or
executive officer of the Company. Other than as disclosed herein, the Company is
not aware of any related transactions or relationships between Ms. Etlin and the
Company that would require disclosure under Item 404(a) of Regulation S-K, and
there are no arrangements or understandings between Ms. Etlin and any other
person pursuant to which Ms. Etlin was selected as an officer of the Company.
Item 7.01 Regulation FD Disclosure.
On February 6, 2023, the Company issued a press release announcing the launch of
an underwritten public offering (the "Offering") of (i) shares of the Company's
Series A convertible preferred stock (the "Series A Convertible Preferred
Stock"), (ii) warrants to purchase shares of Series A Convertible Preferred
Stock and (iii) warrants to purchase the Company's common stock. The Offering is
subject to market and other conditions, and there can be no assurance as to
whether or when the Offering may be completed or as to the actual size or terms
of the offering. The Company expects to raise approximately $225 million in the
Offering together with an additional approximately $800 million through the
issuance of securities requiring the holder thereof to exercise warrants to
purchase shares of Series A Preferred Stock in future installments assuming
certain condition are met. The Company cannot give any assurances that it will
receive any or all of the proceeds of the Offering. A copy of the press release
is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The Company entered into certain confidentiality agreements pursuant to which
the Company agreed to publicly disclose certain information, including material
non-public information thereunder (the "Cleansing Materials"), upon the
occurrence of certain events set forth in such NDAs. A copy of the Cleansing
Materials is attached to this Current Report on Form 8-K as Exhibit 99.2 and
incorporated herein by reference.
The information furnished in this Item 7.01 of this Current Report on
Form 8-K (including Exhibits 99.1 and 99.2) shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and
shall not be incorporated by reference into any filing of the Company under the
Securities Act of 1933, as amended, except as shall be expressly set forth by
specific reference in such filing.
Item 8.01 Other Events
Recent Developments
On January 27, 2023, the Company received formal notice of full compliance from
the Listing Qualifications Staff of The Nasdaq Stock Market LLC. The notice
indicated that, based on the January 26, 2023 filing of the Company's Form 10-Q
for the period ended November 26, 2022, it fulfilled the periodic filing
requirement set forth in Nasdaq Listing Rule 5250(c)(1).
Additional Disclosures
In connection with the Offering, the Company disclosed certain information
related to the Company, attached as Exhibit 99.3 to this Current Report on Form
8-K and incorporated herein by reference.
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On or around January 13, 2023, certain events of default were triggered under
the Company's Amended and Restated Credit Agreement, dated as of August 9, 2021
(the "Credit Agreement"), consisting of a $1.130 billion asset-based revolving
credit facility (the "ABL Facility") and a $375 million first-in-last-out term
loan credit facility (the "FILO Facility"), as a result of the Company's failure
to prepay an over-advance and satisfy a financial covenant, among other things.
As a result of the continuance of such events of default, on January 25, 2023,
JPMorgan Chase Bank, N.A., as administrative agent (the "Administrative Agent")
under the Company's Credit Agreement, sent a notice of acceleration and default
interest to the Company.
Concurrently with the closing of the Offering, the Company will enter into a
waiver and amendment (the "Amendment") to the Credit Agreement (as amended by
the Amendment, the "Amended Credit Agreement"), with certain of the Company's US
and Canadian subsidiaries party thereto, the Administrative Agent, Sixth Street
Specialty Lending, Inc., as FILO agent (the "FILO Agent"), and the lenders party
thereto. Pursuant to the Amendment, the lenders are agreeing to (i) waive any
outstanding defaults or events of default under the existing Credit Facilities
and (ii) rescind the implementation of the acceleration of obligations under the
existing Credit Facilities, the requirement to cash collateralize letters of
credit obligations under the existing Credit Facilities and the default interest
on the outstanding obligations under the existing Credit Facilities.
The Amendment will (i) decrease the total revolving commitment from $1.13
billion to $565 million, (ii) result in an outstanding principal amount of
$428,897,500 as a result of the call protection being capitalized as principal
to the Initial FILO Loan and (iii) provide for an additional $100 million of
FILO loans (the "New FILO Loan" and together with the Initial FILO Loan, the
"FILO Facility", and together with the ABL Facility, the "Credit Facilities"),
as well as other amendments, modifications or supplements to certain other terms
and provisions as more specifically contemplated by the Amendment. In connection
with the New FILO Loan and the entry into the Amendment, the Company will pay
certain customary fees to the applicable lenders. Under the Amendment, the
interest rate margin on revolving loans will increase by 1.00% per annum across
all levels of the pricing grid and the interest rate of the New FILO Loan is set
at the same rate as existing Initial FILO Loan. The Amended Credit Agreement
will also include call protection upon the prepayment of the FILO loans under
certain circumstances.
Under the Amendment, the Company will be required to apply all net cash proceeds
received from the New Filo Loan and the Offering to repay outstanding revolving
loans under the ABL Facility. The Company will be able to continue to borrow
under its ABL Facility subject to availability thereunder. Pursuant to the
Amended Credit Agreement, the Company will be required to use proceeds from
certain dispositions of assets and subsequent equity offerings to pay down
outstanding borrowings under the Credit Facilities. In addition, the Amended
Credit Agreement will provide for certain additional operational covenants and
reporting obligations.
Entry into the Amendment is conditioned on the closing of the Offering. There
can be no assurances that we will enter into the Amendment on the terms
described herein or at all.
The foregoing description of the Amendment (including the Amended Credit
Agreement) does not purport to be complete and is qualified in its entirety by
reference to the full text of the Amendment (including the Amended Credit
Agreement), which, if entered into, will be filed as an exhibit to a Current
Report on Form 8-K.
Forward-Looking Statements
This Current Report on Form 8-K 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 include, but are
not limited to, statements regarding the Company's beliefs and expectations
relating to the closing of the Company's anticipated Offering and the
anticipated use of proceeds of the Offering. 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 uncertainties related to market conditions and the completion of Offering on
the anticipated terms or at all, the Company's ability to use proceeds from the
Offering to pay down outstanding debt obligations and operate its business;
risks related to the failure to consummate the Offering, which the Company
expects will likely force it to file for bankruptcy protection; the Company's
ability to regain access to
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its credit agreement; the Company's ability to deliver and execute on its
turnaround plan; 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 November 26, 2022 and
Exhibit 99.3 to this Current Report on Form 8-K. The Company disclaims and does
not undertake any obligation to update or revise any forward-looking statement
in this Current Report on Form 8-K, except as required by applicable law or
regulation.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit
No. Description of Exhibit
99.1 Press release, dated February 6, 2023
99.2 Cleansing Materials
99.3 Additional Disclosures
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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