1-800-FLOWERS.COM(FLWS) - 2025 Q2 - Quarterly Results

First Amendment to Credit Agreement This section outlines the First Amendment to the Credit Agreement, detailing its parties, modifications, conditions, and general clauses Introduction and Parties This section introduces the First Amendment to the Credit Agreement, identifying key parties including the Company, subsidiary borrowers, lenders, and the Administrative Agent - The amendment is dated January 28, 2025, and modifies the Third Amended and Restated Credit Agreement from June 27, 2023[2][4] - The parties to the amendment include 1-800-Flowers.com, Inc., its subsidiary borrowers and guarantors, the lenders, and JPMorgan Chase Bank, N.A. as Administrative Agent[2] Article 1: Amendments to the Credit Agreement This article formally enacts the Credit Agreement amendments detailed in Annex I, including a condition for "Consolidated EBITDA" definition changes - The Credit Agreement is amended as set forth in Annex I, which contains the full text of the Amended Credit Agreement[7] - A special condition applies to the amendment of the "Consolidated EBITDA" definition: it will not affect the Applicable Rate calculation unless every Lender signs the amendment[7] Article 2: Representations and Warranties The Borrowers represent and warrant their authority, the amendment's binding nature, the reaffirmation of original representations, and the absence of default - The Borrowers confirm their legal authority to execute the amendment and that it is a binding obligation[9] - All representations and warranties from the Amended Credit Agreement are reaffirmed as true and correct as of the First Amendment Effective Date[10] - The Borrowers warrant that no Default or Event of Default exists immediately after the amendment takes effect[11] Article 3: Conditions Precedent This article outlines the conditions for the amendment's effectiveness, including executed documents, officer's certificates, fee payment, and regulatory compliance - The amendment becomes effective upon receipt of executed counterparts from all Loan Parties and the Required Lenders[13] - An officer's certificate must be provided, confirming the accuracy of the representations and warranties[14] - All required fees and expenses must be paid, and necessary documentation for regulatory compliance (e.g., USA PATRIOT Act) must be submitted[15][17] Article 4: General Provisions This section contains general legal clauses, clarifying the amendment's scope, reaffirming existing obligations and liens, and establishing New York governing law - Except as expressly amended, the original Credit Agreement and other Loan Documents remain in full force and effect[19] - Loan Parties reaffirm that their obligations and the liens securing them remain in full force and are not substituted or novated by this amendment[21] - The amendment shall be governed by and construed in accordance with the laws of the State of New York[24] Annex I: Third Amended and Restated Credit Agreement This annex presents the full amended Credit Agreement, detailing definitions, credit mechanics, guarantees, representations, conditions, and covenants Article I: Definitions This article provides comprehensive definitions for all capitalized terms used in the Credit Agreement, covering financial metrics, legal terms, and operational concepts Applicable Rate Schedule | Consolidated Leverage Ratio | ABR Spread | Term Benchmark Spread/Acceptance Fee | Commitment Fee Rate | | :--- | :--- | :--- | :--- | | > 3.50:1.00 (Category 1) | 1.50% | 2.50% | 0.35% | | > 2.50:1.00 to ≤ 3.50:1.00 (Category 2) | 1.25% | 2.25% | 0.30% | | > 1.50:1.00 to ≤ 2.50:1.00 (Category 3) | 1.00% | 2.00% | 0.25% | | ≤ 1.50:1.00 (Category 4) | 0.75% | 1.75% | 0.20% | - The definition of "Consolidated EBITDA" allows for several add-backs, including non-cash expenses, non-recurring legal fees (up to $5 million), and projected cost savings and synergies from acquisitions (up to 10% of Consolidated EBITDA)[110] - The definition of "Immaterial Subsidiary" was amended to add CI Acquisition, LLC., TR Acquisition, LLC and Vital Choice Seafood LLC to the list of designated immaterial subsidiaries[172] Article II: The Credits This article details the credit facilities, including Term Loans and Revolving Credit Commitments, outlining borrowing, repayment, interest, fees, and credit extensions - The agreement provides for a $200,000,000 Term Loan and a $225,000,000 Revolving Credit Commitment[294][261] Term Loan Repayment Schedule (Partial) | Installment Dates | Principal Amount | | :--- | :--- | | Sep 29, 2023 - Jun 27, 2025 | $2,500,000 (Quarterly) | | Sep 26, 2025 - Mar 24, 2028 | $5,000,000 (Quarterly) | | Term Loan Maturity Date | $125,000,000 | - The Revolving Credit Commitments are seasonally reduced to $125,000,000 (with the Working Capital Sublimit reduced to $100,000,000) for the period from January 1 through August 1 of each fiscal year[331] - The company has the option to request an increase in Revolving Credit Commitments or add Incremental Term Loans, with the aggregate amount of all such increases not to exceed $75 million[370][375] - A mandatory "Clean-Down" provision requires that no Revolving Credit Loans under the Working Capital Sublimit be outstanding for at least 30 consecutive days each fiscal year[388] Article III: Guarantee This article establishes the credit facility guarantee structure, where the Company guarantees subsidiary obligations and Subsidiary Guarantors guarantee the Company's, all unconditionally - The Company guarantees the obligations of all Subsidiary Borrowers and Subsidiary Guarantors[475] - Each Subsidiary Guarantor provides a joint and several guarantee for the obligations of the Company and other Borrowers[477] - The guarantees are unconditional and are not affected by waivers, amendments, or acceleration of the underlying obligations[478] Article IV: Representations and Warranties In this article, the Company and its subsidiaries make binding statements of fact to the Lenders regarding their legal status, financial condition, compliance, and absence of adverse effects - The Company represents that since July 3, 2022, no event has occurred that could reasonably be expected to have a Material Adverse Effect[499] - The Company represents that it has implemented policies to ensure compliance with Anti-Corruption Laws and Sanctions, and that no loan proceeds will be used in violation of these laws[518] - The Company represents that after giving effect to the transactions, it and its subsidiaries on a consolidated basis will be Solvent[519] Article V: Conditions This article specifies conditions for the credit agreement's effectiveness and subsequent credit events, including executed documents, legal opinions, and regulatory compliance - The effectiveness of the agreement is conditioned on the Administrative Agent receiving executed counterparts, legal opinions, officer's certificates, a solvency certificate, and other customary closing documents[522][523][526][527] - Each credit event (e.g., borrowing a loan) is conditioned on the representations and warranties being true and correct at that time, and no Default or Event of Default having occurred and being continuing[537][538] Article VI: Affirmative Covenants This article sets forth the actions the Company and its subsidiaries must take, including timely financial statements, material event notices, maintaining legal existence, paying taxes, and legal compliance - The Company must deliver audited annual financial statements within 90 days of fiscal year-end and unaudited quarterly statements within 45 days of quarter-end[540] - The Company must promptly notify the Administrative Agent of any Default, material litigation, or any other development that could reasonably be expected to result in a Material Adverse Effect[544] - The Company is required to cause any new or acquired Domestic Subsidiary (unless it is an Excluded Subsidiary) to become a Subsidiary Guarantor under the agreement within 45 days[557] - Loan proceeds are to be used for refinancing existing debt, fees and expenses, working capital, and general corporate purposes, including permitted acquisitions[556] Article VII: Negative Covenants This article imposes restrictions on the Company and its subsidiaries, including limitations on debt, liens, mergers, investments, and restricted payments, while establishing key financial covenants - The company is restricted from making Restricted Payments (dividends, buybacks) except under specific conditions, including a general basket of $75 million and a leverage-based basket where the Consolidated Leverage Ratio is below a certain threshold[581] - The company is generally prohibited from incurring additional Indebtedness, subject to enumerated exceptions, including a general-purpose basket of $25 million[569][570] Financial Covenants | Covenant | Requirement | Period | | :--- | :--- | :--- | | Consolidated Leverage Ratio | ≤ 2.75:1.00 | As of June 30, 2023 | | | ≤ 3.25:1.00 | As of Sep 30, 2023 & each Sep 30 thereafter | | | ≤ 2.50:1.00 | As of Dec 31, Mar 31, Jun 30 (from Dec 2023) | | Consolidated Fixed Charge Coverage Ratio | ≥ 1.10:1.00 | Quarters ending Jun 2023 through Jun 2024 | | | ≥ 1.25:1.00 | Quarters ending Sep 2024 and thereafter | - The Required Leverage Ratio can be temporarily increased following a Material Acquisition (consideration > $25 million), providing flexibility for integration, but the ratio cannot exceed 4.00 to 1.00[587][201] Article VIII: Events of Default This article defines events constituting a default, such as non-payment, covenant breaches, incorrect representations, cross-defaults, bankruptcy, or a Change in Control - Events of Default include non-payment of principal or interest, violation of covenants (especially financial covenants in Article VII), and incorrectness of representations[594][595] - A cross-default is triggered if the Company or a subsidiary fails to pay or defaults on any other Material Indebtedness (exceeding $15 million)[595][204] - Bankruptcy, insolvency proceedings, or a Change in Control also constitute Events of Default, which can lead to automatic acceleration of the debt[595][597] Article IX: The Administrative Agent This article outlines the Administrative Agent's role, powers, and responsibilities, establishing its non-fiduciary duties, liability protection, and procedures for resignation and erroneous payments - Each Lender and Issuing Lender irrevocably appoints JPMorgan Chase Bank, N.A. as the Administrative Agent to act on their behalf[599] - The Administrative Agent is not subject to fiduciary duties and is not liable for actions taken unless they result from its own gross negligence or willful misconduct[602] - The article includes a detailed "Erroneous Payments" clause, allowing the Administrative Agent to demand the return of funds transmitted to a Lender by mistake[613] Article X: Miscellaneous This final article contains standard legal and administrative provisions, covering notices, amendments, waivers, expense reimbursement, assignments, governing law, jurisdiction, jury trial waiver, and non-novation - The agreement is governed by the laws of the State of New York, and parties submit to the exclusive jurisdiction of courts in the Southern District of New York[654] - Amendments generally require the written consent of the Company and the Required Lenders, with certain critical changes (like increasing commitments or reducing principal/interest) requiring consent from each affected Lender[624] - All parties waive their right to a trial by jury in any legal proceeding related to the agreement[657] - The agreement explicitly states it is an amendment and restatement, not a novation, meaning it continues the original obligations rather than creating entirely new ones[669]