|
|
 | | | |
- close
- close
- close
- close
HBI » Topics » We incurred substantial indebtedness in connection with the spin off, which subjects us to various restrictions and could decrease our profitability and otherwise adversely affect our business.This excerpt taken from the HBI 10-K filed Sep 28, 2006. We
incurred substantial indebtedness in connection with the spin
off, which subjects us to various restrictions and could
decrease our profitability and otherwise adversely affect our
business.
We incurred substantial indebtedness of $2.6 billion in
connection with the spin off as described in
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Liquidity and Capital
Resources.” We are subject to significant financial and
operating restrictions contained in the credit facilities
governing our indebtedness. These restrictions affect, and in
some cases significantly limit or prohibit, among other things,
our ability to:
In addition, our credit facilities require us to maintain
financial ratios. If we fail to comply with the covenant
restrictions contained in these credit facilities, that failure
could result in a default that accelerates the maturity of the
indebtedness under such facilities.
Our substantial leverage also could put us at a significant
competitive disadvantage compared to our competitors which are
less leveraged. These competitors could have greater financial
flexibility to pursue strategic acquisitions, secure additional
financing for their operations by incurring additional debt,
expend capital to expand their manufacturing and production
operations to lower-cost areas and apply pricing pressure on us.
In addition, because many of our customers rely on us to fulfill
a substantial portion of their apparel essentials demand, any
concern these customers may have regarding our financial
condition may cause them to reduce the amount of products they
purchase from us. Our substantial leverage could also impede our
ability to withstand downturns in our industry or the economy in
general.
|
| |||||||
