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Neiman Marcus Exploring Sale

March 15, 2017 - Newswire

Neiman Marcus Group Ltd. said it was exploring a sale of the company while reporting net loss after charges in its second quarter ended January 28.

For the second quarter, the company reported total revenues of $1.40 billion, representing a decrease of 6.1 percent compared to total revenues of $1.49 billion for the second quarter of fiscal year 2016. During this same period, comparable revenues decreased 6.8 percent. Including non-cash impairment charges of $153.8 million, the company reported a net loss of $117.1 million compared to net earnings of $7.9 million for the second quarter of fiscal year 2016.

Adjusted EBITDA, which is described on page 8 of this release, for the second quarter of fiscal year 2017 was $126.8 million compared to $183.0 million in the prior year. For the 26 weeks ended January 28, 2017, the company reported total revenues of $2.47 billion, representing a decrease of 6.7 percent compared to total revenues of $2.65 billion for the same period in the prior year. During this same period, comparable revenues decreased 7.3 percent. Including non-cash impairment charges of $153.8 million described below under “Other Items”, the company reported a net loss of $140.6 million for the 26 weeks ended January 28, 2017 compared to a net loss of $2.7 million in the prior year. Adjusted EBITDA for the 26 weeks ended January 28, 2017 was $249.7 million compared to $347.3 million for the same period in the prior year.

Other Items. The company recorded non-cash impairment charges of $153.8 million in the second quarter of fiscal year 2017 to state certain intangible and other assets, primarily related to its Neiman Marcus brand, to their estimated fair value.

The company has made some changes to its corporate structure to enhance its financial flexibility with respect to some of its assets. The company has designated certain of its subsidiaries as Unrestricted Subsidiaries for purposes of the Cash Pay Notes and PIK Toggle Notes. The designated subsidiaries consist primarily of the entities through which the company conducts the operations of MyTheresa and through which the company holds its properties located in San Antonio, Texas, Longview, Texas, and McLean, Virginia. These subsidiaries were previously or simultaneously designated as “Unrestricted Subsidiaries” under the company’s credit facilities.

The company is undertaking a process to explore and evaluate potential strategic alternatives, which may include the sale of the company or other assets, or other initiatives to optimize its capital structure, as well as a number of other alternatives. The company will conduct this evaluation with the assistance of financial advisors. The company cannot provide assurance that the exploration of strategic alternatives will result in the completion of any transaction or other alternative, or regarding the possible terms or form of any such transaction or alternative. A timetable for the completion of the evaluation process has not been set and the company does not expect to comment further unless and until a specific transaction is approved by its Board of Directors or the company otherwise decides further disclosure is appropriate or required.

Disclaimer: The opinions expressed within this article are the views of the writer and do not necessarily reflect the views and opinions of FDRA.