Birks Group Announces Renewal of Credit Facilities

Key Facts

• The Amended Credit Facility and Amended Term Loan extend the maturity date of the Company’s existing loans from October 2022 to December 2026.
• The Amended Term Loan of $12.5 million is subordinated to the Amended Credit Facility and now bears interest at an annual rate of CDOR plus 7.75%, a reduction of 50 basis points.
• Furthermore, the Amended Term Loan includes an increase in advance rates on eligible inventory of 100 basis points from December 2021 to December 2022, 75 basis points from January 2023 to March 2023, 50 basis points from April 2023 to June 2023, and 25 basis points from July 2023 to September 2023, as well as favorable reductions to seasonal excess availability blocks in effect from December 20th to January 31st of each year.
• These risks and uncertainties include, but are not limited to the following: (i) the magnitude and length of economic disruption as a result of the worldwide COVID-19 outbreak, including its impact on macroeconomic conditions, generally, as well as its impact on the results of operations and financial condition of the Company and the trading price of the shares; (ii) economic, political and market conditions, including the economies of Canada, and the U.S., which could adversely affect our business, operating results or financial condition, including our revenue and profitability, through the impact of changes in the real estate markets, changes in the equity markets and decreases in consumer confidence and the related changes in consumer spending patterns, the impact on store traffic, tourism and sales; (iii) the impact of fluctuations in foreign exchange rates, increases in commodity prices and borrowing costs and their related impact on the Company’s costs and expenses; (iv) changes in interest rates; (v) the Company’s ability to maintain and obtain sufficient sources of liquidity to fund its operations, to achieve planned sales, gross margin and net income, to keep costs low, to implement its business strategy, maintain relationships with its primary vendors, to mitigate fluctuations in the availability and prices of the Company’s merchandise, to compete with other jewelers, to succeed in its marketing initiatives, and to have a successful customer service program; (vi) the Company’s ability to continue to borrow under the Amended Credit Facility and Amended Term Loan, (vii) the Company’s ability to maintain profitable operations, as well as maintain specified excess availability levels under the Amended Credit Facility, make scheduled payments of principal and interest, and fund capital expenditures; (viii) the Company’s ability to execute its strategic vision; and (ix) the Company’s ability to continue as a going concern.

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