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Exhibit 99
FOR: McNaughton Apparel Group Inc.
APPROVED BY: Peter Boneparth
Chief Executive Officer
Amanda Bokman
Chief Financial Officer
(212) 947-2960
FOR IMMEDIATE RELEASE
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CONTACT: Investor Relations:
Shannon Froehlich/Natasha Boyden
Press: Michael McMullan/Kate Talbot
Morgen-Walke Associates
(212) 850-5600
MCNAUGHTON APPAREL GROUP INC. ANNOUNCES CLOSING OF
$210 MILLION SENIOR CREDIT FACILITY
~ Company Provides Guidance For Fiscal 2001 ~
New York, New York, December 12, 2000 - McNaughton Apparel Group Inc.
(Nasdaq: MAGI) today announced that it had closed a three-year $210 million
senior secured revolving credit facility with Bank of America, The CIT Group and
Fleet Capital. The new credit facility, which may be increased to $225 million
during the term, replaces the Company's $175 million senior secured revolving
credit facility. It provides for letters of credit and revolving credit loans on
a borrowing base formula, with floating interest rates based on margins over
LIBOR or prime at the Company's option.
Peter Boneparth, Chief Executive Officer of McNaughton Apparel Group,
commented, "We are extremely pleased to have closed this expanded credit
facility, which provides us with the additional working capital necessary to
continue executing our internal growth strategy."
Additionally, the Company announced that it had issued $59 million in
three-year subordinated promissory notes to the sellers of Jeri-Jo and Jamie
Scott in final payment of the earn-out obligation. The notes bear interest at
the non-overadvance floating rate set forth in the new senior credit facility.
The Company remains very comfortable with analyst earnings estimates of
$0.64 per share for the fourth quarter of fiscal 2000 ended November 4, 2000,
which would result in full year earnings of $3.00 per share. In addition, in
light of favorable business trends and interest expense estimates resulting from
the issuance of the subordinated promissory notes to Jeri-Jo and the Company's
new
~ more ~
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MCNAUGHTON APPAREL GROUP INC. ANNOUNCES Page: 2
CLOSING OF $210 MILLION SENIOR CREDIT FACILITY
credit facility, the Company also provided guidance on its outlook for fiscal
2001. The Company expects to achieve net sales in the range of $560 million to
$600 million, which represents an approximate increase of 10% to 20% over fiscal
2000, gross margins of approximately 28% to 29%, and EBITDA margins ranging from
15.5% to 17%. It expects depreciation and amortization of approximately $18
million, and, based on current interest rate levels, interest expense of
approximately $33 million. These assumptions would result in earnings per share
in the range of $2.20 to $2.50 and earnings per share before goodwill
amortization in the range of $2.95 to $3.25 per share. The Company also stated
that as of December 1, 2000, backlog levels were ahead of last year by
approximately 20%.
Mr. Boneparth continued, "We believe that our favorable sales and operating
trends will result in an increase in EBITDA for fiscal 2001 in excess of 20%
above fiscal 2000. Although we expect a decrease in earnings per share, we note
that this will result primarily from the payment of the Jeri-Jo earnout, which
was funded with a combination of cash, notes and common stock."
Mr. Boneparth concluded, "As we look ahead, we are encouraged by the
overall level and tone of our business. Our brands continue to perform well at
retail and we believe this momentum will continue in fiscal 2001, as is
evidenced by the increase in our backlog position. We are confident that we are
well-positioned to capitalize on the opportunities that lie ahead for our
Company."
The Company invites investors to listen to a broadcast of the Company's
conference call discussing guidance for fiscal 2001. The call will be broadcast
live over the Internet on Wednesday, December 13, 2000 at 9:00 a.m. (EST) and
can be accessed by visiting the investor relations web page at
http://www.mcnaughtonapparel.com.
An online archive of the broadcast will be available within one hour of the
completion of the call and will be accessible on the http://www.vcall.com web
site as well as on the http://www.mcnaughtonapparel.com web site until December
27, 2000.
McNaughton Apparel Group Inc. designs, contracts for the manufacture of and
markets a broad line of brand name, moderately-priced women's and juniors'
career and casual clothing. The Company's product lines include collections of
related separates coordinated by color and style, as well as casual weekend wear
and related knitwear separates. The Company markets its products under its
nationally known labels, including Norton McNaughton(R) and Norton Studio(R),
through its subsidiary Norton McNaughton of Squire, Inc., Erika(R), through its
subsidiary Miss Erika, Inc., and Energie(R), Currants(R), Jamie Scott(R) and
Polar 2000(R), through its subsidiary Jeri-Jo Knitwear, Inc.
~ more ~
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MCNAUGHTON APPAREL GROUP INC. ANNOUNCES Page: 3
CLOSING OF $210 MILLION SENIOR CREDIT FACILITY
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: This press release contains forward-looking information about the
Company's anticipated operating results. The Company undertakes no obligation to
correct or update any forward-looking information, whether as a result of new
information, future events or otherwise. The Company's ability to achieve its
projected results is dependent on many factors, which are outside of
management's control. Some of the most significant factors would be a
deterioration in retailing conditions for women's and juniors' apparel,
including as a result of any continued slowdown in the U.S. economy, an increase
in price pressures and other competitive factors, any of which could result in
an unanticipated decrease in gross profit margins, unanticipated problems
arising with the integration of Miss Erika's and Jeri-Jo's businesses, the
unanticipated loss of a major customer, contractor or supplier, unanticipated
problems arising out of Norton McNaughton of Squire's relocation of its
distribution function to South Carolina where the activities are now being
performed "in-house", increases in interest rates, and weather conditions which
could impact retail traffic and the Company's ability to ship on a timely basis.
Accordingly, there can be no assurance that the Company will achieve its
anticipated operating results.
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