UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 19, 2020
REVOLVE GROUP, INC.
(Exact name of Registrant as Specified in Its Charter)
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Delaware |
001-38927 |
46-1640160 |
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(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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12889 Moore Street Cerritos, California |
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90703 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
(562) 677-9480
Registrant’s Telephone Number, Including Area Code
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class: |
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Trading Symbol(s): |
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Name of each exchange on which registered: |
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Class A Common Stock, par value $0.001 per share |
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RVLV |
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New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As previously disclosed, Revolve Group, Inc. (the “Company”) and certain of its subsidiaries are party to a Credit Agreement, dated as of March 23, 2016, as amended (the “Credit Agreement”), which provides us with up to $75.0 million aggregate principal in revolver borrowings. A description of the material terms of the Credit Agreement is set forth in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Line of Credit” of our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission on February 26, 2020, which is incorporated by reference in this Item 2.03.
As of December 31, 2019, there were no amounts outstanding under the Credit Agreement. On March 19, 2020, the Company provided notice to the lender to borrow $30 million under the Credit Agreement accruing an interest rate equal to six-month LIBOR plus 1.5%, or 2.5%. Given the uncertain environment resulting from the COVID-19 pandemic and out of an abundance of caution, we elected to draw down the $30 million under the Credit Agreement to further strengthen our current cash position. In accordance with the terms of the Credit Agreement, the borrowings may be used for general corporate purposes.
Item 7.01Regulation FD Disclosure
On March 20, 2020, the Company issued a press release announcing that it is withdrawing its previously announced full-year 2020 guidance due to the potential impact of the COVID-19 pandemic and to provide certain other business updates as a result of the COVID-19 pandemic. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated in this Item 7.01 by reference.
The information in this Item 7.01, including Exhibit 99.1, shall not be deemed filed with the U.S. Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. The information in this Current Report on Form 8-K shall not be incorporated by reference into any filing of the Company regardless of general incorporation language in such filing.
Item 9.01Financial Statements and Exhibits.
(d)Exhibits
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Exhibit No. |
Description |
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99.1 |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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REVOLVE GROUP, INC. |
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Date: March 23, 2020 |
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By: |
/s/ JESSE TIMMERMANS |
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Jesse Timmermans |
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Chief Financial Officer |
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Exhibit 99.1
REVOLVE PROVIDES BUSINESS UPDATE IN RESPONSE TO COVID-19 IMPACT ON GLOBAL CONSUMER DEMAND; WITHDRAWS PREVIOUSLY ISSUED FINANCIAL GUIDANCE
LOS ANGELES, CA – MARCH 20, 2020 – Revolve Group, Inc. (NYSE: RVLV) today provided a business update in response to the impact of the COVID-19 outbreak, which has severely affected consumer spending across many sectors of the global economy. Given the heightened uncertainty resulting from the COVID-19 pandemic, REVOLVE is withdrawing its previous financial guidance issued on February 25, 2020.
Initially Strong Q1 2020 Performance in January and February Offset by COVID-19 Impact
REVOLVE’s performance in the first quarter of 2020 began strong with net sales increasing more than 20% year-over-year for January and February 2020 combined. This strong trend continued into the first week of March. However, the sales trend meaningfully changed starting in the second week of March coincident with the escalation of the COVID-19 outbreak in the United States and elsewhere, with significant year-over-year sales declines in recent days. REVOLVE also anticipates that overall consumer demand in the coming months will be impacted by recently enacted COVID-19 requirements for social distancing, which have resulted in the postponement or cancellation of several REVOLVE brand marketing events including the REVOLVE Festival.
Financial Strength to Withstand Downturn: Cash on Balance Sheet Grew to $85 Million as of February 29, 2020 Compared to $65 Million as of December 31, 2019
As of February 29, 2020, REVOLVE had a strong balance sheet with approximately $85 million in net cash and equivalents. REVOLVE’s net cash position as of February 29, 2020 reflects an increase of approximately $20 million from $65 million as of December 31, 2019, primarily driven by operating cash flows. REVOLVE’s financial condition is also bolstered by a $75 million line of credit. Given the uncertain environment and out of an abundance of caution, REVOLVE elected to draw down $30 million in borrowings from this line of credit on March 19, 2020, further strengthening our current cash position.
“Growing REVOLVE for the past 17 years has brought countless ups and downs, yet dealing with the rapidly evolving impact of COVID-19 is truly unprecedented,” said Mike Karanikolas, Co-CEO and Co-Founder of REVOLVE. “Amidst all the uncertainty, we are staying laser focused on ensuring the safety of our employees while continuing to support our valued customers. Our balance sheet strength, capital efficiency and online business model position us to withstand a period of economic uncertainty and, we believe, come out stronger on the other end.”
“We are confident in our ability to navigate the rapidly changing consumer landscape and as such, Mike and I recently personally invested more than $2.5 million (on a combined basis) to purchase REVOLVE shares, adding to our majority ownership stake in the business,” added Michael Mente, Co-CEO and Co-Founder of REVOLVE.
REVOLVE continues to monitor the development of COVID-19 and the situation remains fluid. As of the date of this release, REVOLVE’s e-Commerce websites are fully operational, supported by its fulfillment center in Cerritos, California that is operating with enhanced workflow and processes to safeguard the health of its warehouse employees. REVOLVE is prepared to comply with state, city and local guidelines that may be enacted in response to the COVID-19 precautions, including any temporary forced closure of the fulfillment center should more rigorous restrictions be implemented in Los Angeles County.
Forward-Looking Statements
This press release contains ‘‘forward-looking statements’’ within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this press release are forward-looking statements, including but not limited to statements regarding the impact of the COVID-19 pandemic on the financial results and operations of our business as well as on overall consumer demand. Forward-looking statements include statements containing words such as “expect,” “anticipate,” “believe,” “project,” “will” and similar expressions intended to identify forward-looking statements. These forward-looking statements are based upon our current expectations. Forward-looking statements involve risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to general economic conditions; the impact of the COVID-19 pandemic; our fluctuating operating results; seasonality in our business; our ability to acquire products on reasonable terms; our online business model; demand for our products; our ability to attract customers in a cost effective manner; the strength of our brand; competition; fraud; system interruptions; our ability to fulfill orders; and other risks and uncertainties included under the caption “Risk Factors” and elsewhere in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 26, 2019. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and Revolve Group, Inc. undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.
About Revolve Group, Inc.
Revolve Group, Inc. (RVLV) is the next-generation fashion retailer for Millennial and Generation Z consumers. As a trusted, premium lifestyle brand, and a go-to online source for discovery and inspiration, we deliver an engaging customer experience from a vast yet curated offering of apparel, footwear, accessories and beauty styles. Our dynamic platform connects a deeply engaged community of millions of consumers, thousands of global fashion influencers, and hundreds of emerging, established and owned brands.
We were founded in 2003 by our co-CEOs, Michael Mente and Mike Karanikolas. We sell merchandise through two differentiated segments, REVOLVE and FORWARD, that leverage one platform. Through REVOLVE we offer a highly curated assortment of full-price premium apparel and footwear, accessories and beauty products from emerging, established and owned brands. Through FORWARD we offer an assortment of iconic and emerging luxury brands. For more information, visit www.revolve.com.
Erik Randerson, CFA
1-562-677-9513
IR@revolve.com
Media Contact:
Simone Kuhfal
simone.kuhfal@revolve.com