Item 1.01 Entry into a Material Definitive Agreement
On
The foregoing description of the terms of the Amendment is not a complete description thereof and is qualified in its entirety by the full text of such agreement which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Item 2.02 Results of Operations and Financial Condition
On
The preliminary financial data incorporated by reference in this Item 2.02 has
been prepared by, and is the responsibility of, the Company's management.
Item 8.01 Other Events Notes Offering
On
The Company intends to use the net proceeds from the offering of the Notes to repay the borrowings under its current senior unsecured revolving credit facility. The company intends to use any remaining net proceeds for general corporate purposes.
A copy of the press release announcing the offering of the Notes is filed herewith as Exhibit 99.2 and incorporated by reference in this 8.01.
In connection with the offering of the Notes the Company is disclosing in a preliminary prospectus supplement (the "Preliminary Prospectus Supplement") the following information relating to the COVID-19 pandemic:
Impact of COVID-19
As the global spread of COVID-19 continues, we remain first and foremost focused on a people-first approach that prioritizes the health and well-being of our employees and consumers around the world. To help mitigate the spread of COVID-19, we have modified our business practices, including in response to legislation, executive orders and guidance from government entities and healthcare authorities (collectively, "COVID-19 Directives"). These directives include the temporary closing of businesses, travel bans and restrictions, social distancing and quarantines.
As a result of COVID-19 Directives, retail stores in
Consistent with VF's long-term strategy, the company's digital platform remains a high priority through which its brands stay connected with consumer communities while providing experiential content and service. In accordance with local government guidelines and in consultation with the guidance of global health professionals, VF has implemented measures designed to ensure the health, safety and well-being of associates employed in its distribution and fulfillment centers around the world. Many of these facilities remain operational and support digital consumer engagement with its brands and to service retail partners as needed.
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At this time, many of our facilities continue to manufacture and distribute products globally, albeit in a reduced capacity in light of the challenging environment. COVID-19 has also impacted some of our suppliers, including third-party manufacturers, logistics providers and other vendors. We are actively monitoring our supply chain and implementing mitigation plans.
Risk Factor Updates
In addition, in response to the COVID-19 outbreak, the Company is also filing
this Current Report on Form 8-K for the purposes of supplementing the risk
factors disclosed in Part I, Item 1A, "Risk Factors," of its Annual Report on
Form 10-K for the fiscal year ended
Widespread outbreak of an illness or any other public health crisis, including the recent coronavirus (COVID-19) global pandemic, could and has materially and adversely affected our business, financial condition and results of operations.
Our business has been, and will continue to be, impacted by the effects of the COVID-19 global pandemic in countries where we operate or our suppliers, third-party service providers, consumers or customers are located. These effects include recommendations or mandates from governmental authorities to close businesses, limit travel, avoid large gatherings or to self-quarantine, as well as temporary closures and decreased operations of the facilities of our suppliers, service providers and customers. The impacts on us have included, and in the future could include, but are not limited to:
• significant reductions in demand and significant volatility in demand for our products by consumers and customers resulting in reduced orders, order cancellations, lower revenues, higher discounts, increased inventories, decreased value of inventories, and lower gross margins, which may be caused by, among other things: the inability of consumers to purchase our products due to illness, quarantine or other restrictions or out of fear of exposure to COVID-19, store closures of our owned stores as well as stores of our customers or reduced store hours across theAmericas ,Europe andAsia Pacific , significant declines in consumer retail store traffic to stores that have reopened, or financial hardship and unemployment, shifts in demand away from consumer discretionary products, and reduced options for marketing and promotion of products or other restrictions in connection with the COVID-19 pandemic; • significant uncertainty and turmoil in global economic and financial market conditions causing, among other things: decreased consumer confidence and decreased consumer spending, now and in the mid and long term, inability to access financing in the credit and capital markets (including the commercial paper market) at reasonable rates (or at all) in the event we, our customers or suppliers find it desirable to do so, increased exposure to fluctuations in foreign currency exchange rates relative to theU.S. Dollar, and volatility in the availability and prices for commodities and raw materials we use for our products and in our supply chain; • inability to meet our consumers' and customers' needs for inventory production and fulfillment due to disruptions in our supply chain and increased costs associated with mitigating the effects of the pandemic caused by, among other things: reduction or loss of workforce due to illness, quarantine or other restrictions or facility closures, scarcity of and/or increased prices for raw materials, scrutiny or embargoing of goods produced in infected areas, and increased freight and logistics costs, expenses and times; • failure of third parties on which we rely, including our suppliers, customers, distributors, service providers, and commercial banks, to meet their obligations to us or to timely meet those obligations, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties, including business failure or insolvency and collectability of existing receivables; and • significant changes in the conditions in markets in which we do business, including quarantines, governmental or regulatory actions, closures or other restrictions that limit or close our operating and manufacturing facilities and restrict our employees' ability to perform necessary business functions, including operations necessary for the design, development, production, distribution, sale, marketing and support of our products.
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Any of these impacts could place limitations on our ability to execute on our business plan and materially and adversely affect our business, financial condition and results of operations. We continue to monitor the situation and may adjust our current policies and procedures as more information and guidance become available regarding the evolving situation. The impact of COVID-19 may also exacerbate other risks discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K, any of which could have a material effect on us. This situation is changing rapidly and additional impacts may arise that we are not aware of currently.
Forward-Looking Statements
This Form 8-K contains "forward-looking statements" within the meaning of the
federal securities laws. Forward-looking statements are made based on our
expectations and beliefs concerning future events impacting VF and therefore
involve several risks and uncertainties. You can identify these statements by
the fact that they use words such as "will," "anticipate," "estimate," "expect,"
"should," and "may" and other words and terms of similar meaning or use of
future dates. We caution that forward-looking statements are not guarantees and
that actual results could differ materially from those expressed or implied in
the forward-looking statements. Potential risks and uncertainties that could
cause the actual results of operations or financial condition of VF to differ
materially from those expressed or implied by forward-looking statements in this
Form 8-K include, but are not limited to: risks arising from the widespread
outbreak of an illness or any other communicable disease, or any other public
health crisis, including the coronavirus (COVID-19) global pandemic; risks
associated with the spin-off of our Jeanswear business completed on
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
10.1 Amendment No. 1 to Five-Year Revolving Credit Agreement, dated as ofApril 20, 2020 , by and amongV.F. Corporation ,JP Morgan Chase Bank, N.A. , as the Administrative Agent, the Lenders party thereto and the other parties thereto 99.1 Press Release datedApril 21, 2020 Relating to Preliminary Unaudited Selected Financial Data for the Fiscal Year EndedMarch 28, 2020 99.2 Press Release datedApril 21, 2020 Relating to Offering of the Notes 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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