LANDS' END, INC.

Previous wording

Debt Facilities – Collectively, the Current Term Loan Facility and ABL Facility

Current wording

Debt Facilities – Collectively, the Term Loan Facility and ABL Facility

Previous wording

GMV – Gross merchandise value equals total order value of all Lands’ End branded merchandise sold to customers through business-to-consumer and business-to-business channels, as well as the retail value of the merchandise sold through third party distribution channels.

Current wording

GMV – Gross merchandise value equals total order value of all Lands’ End branded merchandise sold to customers through business-to-consumer and business-to-business channels, as well as the estimated retail value of the merchandise sold through third party distribution channels.

Previous wording

Current Term Loan Facility – Term loan credit agreement, dated as of December 29, 2023, among the Company, Blue Torch Capital, as Administrative Agent and Collateral Agent, and the lenders party thereto

Current wording

Term Loan Facility – Term loan credit agreement, dated as of December 29, 2023, among the Company, Blue Torch Capital, as Administrative Agent and Collateral Agent, and the lenders party thereto

Previous wording

We have one external reportable segment and identify our operating segments according to how our business activities are managed and evaluated. Our operating segments consisted of: U.S. eCommerce, Europe eCommerce, Outfitters, Third Party and Retail.

Current wording

We identify our operating segments according to how our business activities are managed and evaluated. Following internal organizational changes and realignment of distribution channel responsibilities in Fourth Quarter 2024, our operating segments now consist of: U.S. eCommerce, Europe eCommerce, Outfitters, Third Party, Licensing and Retail.

Previous wording

We have determined that each of our operating segments share similar economic and other qualitative characteristics, and therefore, the results of our operating segments are aggregated into one external reportable segment.

Current wording

We have determined that the U.S. eCommerce, Outfitters and Third Party operating segments share similar economic and other qualitative characteristics, and therefore, the results of these operating segments are aggregated into the U.S. Digital segment. The Europe eCommerce, Licensing and Retail operating segments are not quantitatively significant to be separately reported. See Note 12, Segment Reporting.

Previous wording

We identify five separate distribution channels for revenue reporting purposes:

Current wording

We identify six separate distribution channels for revenue reporting purposes:

Previous wording

International offers products primarily to consumers located in Europe and through our eCommerce international websites and third-party affiliates.

Current wording

Europe eCommerce offers products primarily direct to consumers located in Europe through eCommerce international websites as well as third-party marketplace websites.

Previous wording

Third Party sells the same products as U.S. eCommerce but direct to consumers through third-party marketplace websites and through domestic wholesale relationships. In addition, Third Party generates revenue from licensing agreements.

Current wording

Third Party sells products direct to consumers through third-party marketplace websites.

Previous wording

Retail sells products through our Company Operated stores.

Current wording

Retail sells products through the Company Operated stores, located in the U.S.

Previous wording

During Fiscal 2023, we reduced approximately 10% of our corporate office and Hong Kong sourcing office positions and incurred restructuring charges, primarily severance and benefit and other related costs. The reductions in the Hong Kong sourcing office were organizational changes to move positions to our corporate headquarters to centralize product development to better align with our speed-to-market initiatives. The reductions in the corporate office positions were made to better align with the evolving needs of the business and to invest in key growth areas. For the 39 weeks ended November 1, 2024, we incurred restructuring charges, primarily severance and benefit costs, related to cost optimization of business operations and strategic initiatives.

Current wording

During the First Quarter 2025, we reduced approximately 6% of our corporate office positions and incurred restructuring charges, primarily severance and benefit and other related costs. The reductions in the corporate office positions were made to better align with the evolving needs of the business and to invest in key growth areas. Additionally, we incurred ongoing costs related to exploring strategic alternatives to maximize shareholder value and have included those costs as part of restructuring. For the 13 weeks ended May 3, 2024, we incurred restructuring charges, primarily severance and benefit costs, related to cost optimization of business operations and strategic initiatives.

Previous wording

As of November 1, 2024, approximately $4.1 million of restructuring costs incurred had yet to be paid and are included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

Current wording

As of May 2, 2025, approximately $2.4 million of restructuring costs incurred had yet to be paid and are included in Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

Previous wording

We experience seasonal fluctuations in our Net revenue and operating results and historically have realized a significant portion of our net revenue and earnings for the year during our fourth fiscal quarter. We generated approximately 34.0% of our net revenue in the fourth quarters of Fiscal 2023 and Fiscal 2022.

Current wording

We experience seasonal fluctuations in our Net revenue and operating results and historically have realized a significant portion of our net revenue and earnings for the year during our fourth fiscal quarter. We generated approximately 34% of our net revenue in the fourth quarters of Fiscal 2024 and Fiscal 2023.

Previous wording

The following tables set forth, for the periods indicated, selected income statement data, both in dollars and as a percentage of Net revenue:

Current wording

The following table sets forth, for the periods indicated, selected income statement data, both in dollars and as a percentage of Net revenue:

Previous wording

Restructuring – primarily severance and benefit costs for the 13 and 39 weeks ended November 1, 2024 and October 27, 2023.

Current wording

Corporate restructuring – primarily severance and benefit costs as well as costs related to the strategic alternative exploration for the 13 weeks ended May 2, 2025. Primarily severance and benefit costs for the 13 weeks ended May 3, 2024.

Previous wording

Exit costs – charges associated to exit the kids and footwear lines of business including excess and obsolescence reserves, inventory discounts and operational charges recorded in the 39 weeks ended November 1, 2024 in conjunction with our licensing arrangements which commenced in Fiscal 2024.

Current wording

Exit costs - charges associated to exit kids and footwear lines of business including inventory excess and obsolescence reserves, inventory discounts and operational charges recorded in the 13 weeks ended May 2, 2025 in conjunction with our licensing arrangements commencing in Fiscal 2024.

Previous wording

The following tables set forth, for the periods indicated, a reconciliation of Net loss to Adjusted net income (loss) and Adjusted diluted earnings (loss) per share:

Current wording

The following table sets forth, for the periods indicated, a reconciliation of Net loss to Adjusted net income (loss) and Adjusted diluted earnings (loss) per share:

Previous wording

Net gain or loss on disposal of property and equipment – disposal of property and equipment for the 13 and 39 weeks ended November 1, 2024 and the 39 weeks ended October 27, 2023.

Current wording

Net gain or loss on disposal of property and equipment – disposal of property and equipment for the 13 weeks ended May 2, 2025 and May 3, 2024.

Previous wording

Exit costs – charges associated to exit the kids and footwear lines of business including excess and obsolescence reserves, inventory discounts and operational charges recorded in the 39 weeks ended November 1, 2024 in conjunction with our licensing arrangements which commenced in Fiscal 2024.

Current wording

Exit costs - charges associated to exit kids and footwear lines of business including inventory excess and obsolescence reserves, inventory discounts and operational charges recorded in the 13 weeks ended May 2, 2025 in conjunction with our licensing arrangements commencing in Fiscal 2024.

Previous wording

In assessing the operational performance of our business, we consider a variety of financial measures. We operate in five separate distribution channels for revenue reporting purposes: U.S. eCommerce, International, Outfitters, Third Party and Retail. A key measure in the evaluation of our business is revenue performance by distribution channel. We also consider gross margin and Selling and administrative expenses in evaluating the performance of our business.

Current wording

In assessing the operational performance of our business, we consider a variety of financial measures. We operate in six separate distribution channels for revenue reporting purposes: U.S. eCommerce, Europe eCommerce, Outfitters, Third Party, Licensing and Retail. A key measure in the evaluation of our business is revenue performance by distribution channel as well as consolidated Gross margin. We manage and assess the performance of each of our operating segments using Variable profit, which is defined as Net revenue minus cost of sales and variable selling expenses. This segment measure excludes fixed personnel costs, incentive compensation, office occupancy, information technology, professional fees and depreciation and amortization. See Note 12, Segment Reporting for more information regarding Variable profit, which is a non-GAAP measure, as well as a reconciliation of Variable profit to Income (loss) before income taxes.

Previous wording

We use Net revenue to evaluate revenue performance for the U.S. eCommerce, International, Outfitters and Third Party distribution channels. We use GMV, which equals total order value of all Lands’ End branded merchandise sold to customers through business-to-consumer and business-to-business channels, as well as the retail value of the merchandise sold through third party distribution channels, as an important indicator of the performance of the comparable growth of the total brand. For our Retail distribution channel, we use Same Store Sales as a key measure in evaluating performance. A Company Operated store is included in U.S. Same Store Sales calculations when it has been open for at least 14 months. Online sales and sales generated through our in-store web portal are considered revenue in our U.S. eCommerce and are excluded from U.S. Same Store Sales.

Current wording

We use Net revenue to evaluate revenue performance for the U.S. eCommerce, Europe eCommerce, Outfitters, Third Party and Licensing distribution channels. We use GMV, which equals total order value of all Lands’ End branded merchandise sold to customers through business-to-consumer and business-to-business channels, as well as the estimated retail value of the merchandise sold through third party distribution channels, as an important indicator of the performance of the comparable growth of the total brand. For our Retail distribution channel, we use Same Store Sales as a key measure in evaluating performance. A Company Operated store is included in U.S. Same Store Sales calculations when it has been open for at least 14 months. Online sales and sales generated through our in-store web portal are considered revenue in our U.S. eCommerce and are excluded from U.S. Same Store Sales.

Previous wording

Outfitters Net revenue was $73.4 million for Third Quarter 2024, a decrease of $0.9 million or 1.2%, from $74.3 million during Third Quarter 2023. The business uniform channel increased year-over-year primarily due to the strength in national accounts. The school uniform channel decreased primarily due to the timing of customer orders earlier in the back-to-school season as compared to the prior year.

Current wording

Outfitters Net revenue was $42.9 million for First Quarter 2025, an increase of $0.2 million or 0.5%, from $42.7 million during First Quarter 2024. The business uniform channel increased year-over-year primarily due to strength in national accounts. The school uniform channel slightly decreased primarily due to the timing of customer orders compared to the prior year.

Previous wording

Gross profit was $161.1 million for Third Quarter 2024, an increase of $8.5 million or 5.6% from $152.6 million during Third Quarter of 2023. Gross margin increased approximately 360 basis points to 50.6% in Third Quarter 2024, compared with 47.0% in Third Quarter 2023. The gross margin improvement was primarily driven by lower promotional activity, leveraging the strength in product solutions and newness across the channels and improved supply chain costs.

Current wording

Gross profit was $132.7 million for First Quarter 2025, a decrease of $6.3 million or 4.5% from $139.0 million during First Quarter of 2024. Gross margin increased approximately 210 basis points to 50.8% in First Quarter 2025, compared with 48.7% in First Quarter 2024. The gross margin improvement was primarily driven by the impact of transitioning kids and footwear inventory to licensees in First Quarter 2024.

Previous wording

Selling and administrative expenses increased $5.6 million to $140.9 million or 44.2% of total Net revenue in Third Quarter 2024 compared with $135.3 million or 41.7% of Net revenue in Third Quarter 2023. The approximately 250 basis points increase was primarily driven by higher digital marketing spend focused on new customer acquisition.

Current wording

Selling and administrative expenses decreased $3.9 million to $123.5 million or 47.3% of total Net revenue in First Quarter 2025 compared with $127.4 million or 44.6% of Net revenue in First Quarter 2024. The approximately 270 basis points increase was primarily driven by deleverage from lower revenues.

Previous wording

Depreciation and amortization expense decreased $1.4 million to $8.2 million in Third Quarter 2024 compared with $9.6 million in Third Quarter 2023. The decrease in depreciation and amortization is primarily driven by lower software depreciation in Third Quarter 2024 as a result of major software projects becoming fully depreciated.

Current wording

Depreciation and amortization expense decreased $0.7 million to $8.3 million in First Quarter 2025 compared with $9.0 million in First Quarter 2024. The decrease in depreciation and amortization is primarily driven by lower software depreciation as a result of major software projects becoming fully depreciated.

Previous wording

As a result of above factors, Operating income was $9.3 million in Third Quarter 2024 compared to Operating loss of $101.3 million in Third Quarter 2023.

Current wording

As a result of above factors, Operating loss was $2.4 million in First Quarter 2025 compared to Operating income of $2.2 million in First Quarter 2024.

Previous wording

Interest expense was $10.3 million in Third Quarter 2024 compared to $11.7 million in Third Quarter 2023. The $1.4 million decrease was primarily driven by lower ABL Facility interest related to lower average outstanding balances and lower applicable interest rates under the Current Term Loan Facility.

Current wording

Interest expense was $9.3 million in First Quarter 2025 compared to $10.3 million in First Quarter 2024. The $1.0 million decrease was primarily driven by lower ABL Facility interest related to lower average outstanding balances and lower applicable interest rates under the Term Loan Facility.

Previous wording

We recorded an income tax benefit at an overall effective rate of 55.4% for the Third Quarter 2024 and an income tax benefit at an overall effective rate of 0.4% for the Third Quarter 2023. The overall effective tax rate for the Third Quarter 2024 varies from the U.S. federal statutory rate of 21% as a result of state taxes, non-deductible expenses, and the impacts of certain state audit closures and stock-based compensation adjustments. The overall effective tax rate for the Third Quarter 2023 reflects the impacts resulting from the impairment of goodwill recorded in the Third Quarter 2023.

Current wording

We recorded an income tax benefit at an overall effective rate of 28.9% and 19.6% for the First Quarter 2025 and First Quarter 2024, respectively. The overall effective tax rate for the 13 weeks ended May 2, 2025 varies from the U.S. federal statutory rate of 21% as a result of state taxes, and non-deductible expenses. The overall effective tax rate for the 13 weeks ended May 3, 2024 varies from the U.S. federal statutory rate of 21% as a result of state taxes, non-deductible expenses, and the impact of stock-based compensation.

Previous wording

As a result of the above factors, Net loss was $0.6 million and diluted loss per share was $0.02 in Third Quarter 2024 compared with Net loss of $112.4 million and diluted loss per share was $3.52 in Third Quarter 2023. Third Quarter 2023 Net loss includes a non-cash goodwill impairment charge of $106.7 million.

Current wording

As a result of the above factors, Net loss was $8.3 million and diluted loss per share was $0.27 in First Quarter 2025 compared with Net loss of $6.4 million and diluted loss per share was $0.20 in First Quarter 2024.

Previous wording

Adjusted net income was $1.8 million and Adjusted diluted earnings per share was $0.06 in Third Quarter 2024 compared to Adjusted net loss of $3.6 million and Adjusted diluted loss per share of $0.11 in Third Quarter 2023.

Current wording

Adjusted net loss was $5.4 million and Adjusted diluted loss per share was $0.18 in First Quarter 2025 compared to Adjusted net loss of $6.2 million and Adjusted diluted loss per share of $0.20 in First Quarter 2024.

Previous wording

As a result of the above factors, Adjusted EBITDA was $20.3 million in Third Quarter 2024 and $17.3 million in Third Quarter 2023, respectively.

Current wording

As a result of the above factors, Adjusted EBITDA was $9.5 million in First Quarter 2025 and $11.6 million in First Quarter 2024, respectively.

Previous wording

Our primary need for liquidity is to fund working capital requirements of our business, which are inventory purchases, payments on debt, capital expenditures and for general corporate purposes. Our cash and cash equivalents and the ABL Facility serve as sources of liquidity for short-term working capital needs and general corporate purposes. The ABL Facility had a balance outstanding of $60.0 million on November 1, 2024, other than letters of credit. Cash generated from our net revenue and profitability, and to a lesser extent our changes in working capital, are driven by the seasonality of our business, with a significant amount of net revenue and operating cash flows generally occurring in the fourth fiscal quarter of each year. We expect that our cash on hand and cash flows from operations, along with revolving on the ABL Facility, will be adequate to meet our capital requirements and operational needs for at least the next 12 months.

Current wording

Our primary need for liquidity is to fund working capital requirements of our business, which are inventory purchases, payments on debt, capital expenditures and for general corporate purposes. Our cash and cash equivalents and the ABL Facility serve as sources of liquidity for short-term working capital needs and general corporate purposes. The ABL Facility had a balance outstanding of $40.0 million on May 2, 2025, other than letters of credit. Cash generated from our net revenue and profitability, and to a lesser extent our changes in working capital, are driven by the seasonality of our business, with a significant amount of net revenue and operating cash flows generally occurring in the fourth fiscal quarter of each year. We expect that our cash on hand and cash flows from operations, along with revolving on the ABL Facility, will be adequate to meet our capital requirements and operational needs for at least the next 12 months.

Previous wording

Our $275.0 million committed revolving ABL Facility includes a $70.0 million sublimit for letters of credit and is available for working capital and other general corporate liquidity needs and matures on July 29, 2026. The amount available to borrow is the lesser of (1) the Aggregate Commitments of $275.0 million (“ABL Facility Limit”) or (2) the Borrowing Base or Loan Cap which is calculated from Eligible Inventory, Trade Receivables and Credit Card Receivables, all foregoing capitalized terms not defined herein are as defined in the ABL Facility. The balance outstanding on November 1, 2024 and October 27, 2023 was $60.0 million and $110.0 million, respectively. The balance of outstanding letters of credit was $11.1 million and $8.9 million on November 1, 2024 and October 27, 2023, respectively. The borrowing availability under the ABL Facility was $90.3 million and $156.1 million as of November 1, 2024 and October 27, 2023, respectively.

Current wording

Our $225.0 million committed revolving ABL Facility, as amended to date, includes a $35.0 million sublimit for letters of credit and is available for working capital and other general corporate liquidity needs. The amount available to borrow is the lesser of (1) the Aggregate Commitments of $225.0 million (“ABL Facility Limit”) or (2) the Borrowing Base or Loan Cap which is calculated from Eligible Inventory, Trade Receivables and Credit Card Receivables, all foregoing capitalized terms not defined herein are as defined in the ABL Facility. The balance outstanding on May 2, 2025 and May 3, 2024 was $40.0 million and $40.0 million, respectively. The balance of outstanding letters of credit was $11.0 million and $8.1 million on May 2, 2025 and May 3, 2024, respectively. The borrowing availability under the ABL Facility was $86.8 million and $133.8 million as of May 2, 2025 and May 3, 2024, respectively.

Previous wording

Effective with the Fourth Amendment to the ABL Facility executed May 12, 2023, the benchmark interest rate was changed from LIBOR to SOFR plus an adjustment of 0.10% for all loans (“ABL Adjusted SOFR”). Loan interest rates are selected at the borrower’s election, is either (1) ABL Adjusted SOFR, or (2) a base rate which is the greater of (a) the federal funds rate plus 0.50%, (b) the one-month ABL Adjusted SOFR rate plus 1.00%, or (c) the Wells Fargo “prime rate”. The borrowing margin for ABL Adjusted SOFR loans is (i) less than $95.0 million, 1.25%, (ii) equal to or greater than $95.0 million but less than $180.0 million, 1.50%, and (iii) greater than or equal to $180.0 million, 1.75%. For base rate loans, the borrowing margin is (i) less than $95.0 million, 0.50%, (ii) equal to or greater than $95.0 million but less than $180.0 million, 0.75%, and (iii) greater than or equal to $180.0 million, 1.00% (“Applicable Borrowing Margin”). The Applicable Borrowing Margin for all loans is based upon the average daily total loans outstanding for the previous quarter. The Fourth Amendment had no material interest rate impact.

Current wording

Effective with the Fifth Amendment to the ABL Facility, dated March 28, 2025 (the “Fifth Amendment”), the 0.10% adjustment to the SOFR benchmark interest rate was eliminated and the benchmark rates under the ABL Credit Agreement are, at our election, either: (1) Term SOFR (which is a forward looking term rate based on the secured overnight financing rate), or (2) a Base Rate (which is the greatest of (a) 0% per annum, (b) the federal funds rate plus 0.50%, (c) the one-month Term SOFR rate plus 1.00%, or (d) the Wells Fargo “prime rate”). The borrowing margin for SOFR Rate loans is (i) where the average daily total outstanding for the previous quarter is less than $95.0 million, 1.50%, and (ii) where the average daily total outstanding for the previous quarter is equal to or greater than $95.0 million, 1.75%. For Base Rate loans, the borrowing margin is (i) where the average daily total outstanding for the previous quarter is less than $95.0 million, 0.75%, and (ii) where the average daily total outstanding for the previous quarter is equal to or greater than $95.0 million, 1.00% (“Applicable Borrowing Margin”). The Applicable Borrowing Margin for all loans is based upon the average daily total loans outstanding for the previous quarter. The Fifth Amendment had no material interest rate impact.

Previous wording

The ABL Facility fees include (i) commitment fees of 0.25% based upon the average daily unused commitment (aggregate commitment less loans and letter of credit outstanding) under the ABL Facility for the preceding fiscal quarter, (ii) customary letter of credit fees and (iii) customary annual agent fees. As of November 1, 2024, we had $60.0 million borrowings outstanding under the ABL Facility.

Current wording

The ABL Facility fees include (i) commitment fees of 0.20% or 0.30% based upon the average daily unused commitment (aggregate commitment less loans and letter of credit outstanding) under the ABL Facility for the preceding fiscal quarter, (ii) customary letter of credit fees and (iii) customary annual agent fees. The Fifth Amendment extended the maturity date of the ABL Facility to the earlier of (a) March 28, 2030 and (b) September 29, 2028 if, on or prior to such date, the Term Loan Facility has not been refinanced, extended or repaid in full in accordance with the terms thereof and not replaced with other indebtedness. Under applicable accounting guidance, certain unamortized debt issuance costs originating from the ABL Facility are deferred and amortized over the extended term of the ABL Facility, and certain unamortized debt issuance costs have been written off. As of May 2, 2025, we had $40.0 million borrowings outstanding under the ABL Facility.

Previous wording

The Current Term Loan Facility will mature on December 29, 2028, and amortizes at a rate equal to 1.25% per quarter. Depending upon the Company’s Total Leverage Ratio, as defined in the Current Term Loan Facility, mandatory prepayments in an amount equal to a percentage of the Company’s excess cash flows in each fiscal year, ranging from 0% to 75% are required. The Current Term Loan Facility also has typical prepayment requirements for the proceeds of certain asset sales, casualty events and extraordinary receipts. Voluntary prepayment and certain mandatory prepayments made (i) on or before December 29, 2024 would result in a prepayment premium equal to 3% of the principal amount of the loan prepaid plus a yield maintenance fee, (ii) between December 30, 2024 and December 29, 2025 would result in a prepayment premium equal to 2% of the principal amount of the loan prepaid, (iii) between December 30, 2025 and December 29, 2026, would result in a prepayment premium equal to 1% of the principal amount of the loan prepaid, (iv) between December 30, 2026 and December 29, 2027, would result in a prepayment premium equal to 0.5% of the principal amount of the loan prepaid and (v) thereafter no prepayment premium is due.

Current wording

The Term Loan Facility will mature on December 29, 2028, and amortizes at a rate equal to 1.25% per quarter. Depending upon our Total Leverage Ratio, as defined in the Term Loan Facility, mandatory prepayments in an amount equal to a percentage of the our excess cash flows in each fiscal year, ranging from 0% to 75% are required. The Term Loan Facility also has typical prepayment requirements for the proceeds of certain asset sales, casualty events and extraordinary receipts. Voluntary prepayment and certain mandatory prepayments made (i) between December 30, 2024 and December 29, 2025 would result in a prepayment premium equal to 2% of the principal amount of the loan prepaid, (ii) between December 30, 2025 and December 29, 2026, would result in a prepayment premium equal to 1% of the principal amount of the loan prepaid, (iii) between December 30, 2026 and December 29, 2027, would result in a prepayment premium equal to 0.5% of the principal amount of the loan prepaid and (iv) thereafter no prepayment premium is due.

Previous wording

The interest rates per annum applicable to the loans under the Current Term Loan Facility are based on a fluctuating rate of interest equal to, at the Company’s election, either (1) Term Loan Adjusted SOFR loan (subject to a 2% floor) plus an applicable margin, or (2) an alternative base rate loan plus an applicable margin. The applicable margin is based on the Company’s net leverage and will be, (i) for Term Loan Adjusted SOFR loans, 8.25% per annum if the total leverage ratio is greater than or equal to 2.75:1.00, 8.00% per annum if the total leverage ratio is less than 2.75:1.00 but greater than or equal to 2.25:1.00, and 7.75% per annum if the total leverage ratio is less than 2.25:1.00 and (ii) for base rate loans, 7.25% per annum if the total leverage ratio is greater than or equal to 2.75:1.00, 7.00% per annum if the total leverage ratio is less than 2.75:1.00 but greater than or equal to 2.25:1.00, and 6.75% per annum if the total leverage ratio is less than 2.25:1.00. In each case, the net leverage is determined as of the last day of each applicable measurement period.

Current wording

The interest rates per annum applicable to the loans under the Term Loan Facility are based on a fluctuating rate of interest equal to, at our election, either (1) Term Loan Adjusted SOFR loan (subject to a 2% floor) plus an applicable margin, or (2) an alternative base rate loan plus an applicable margin. The applicable margin is based on our net leverage and will be, (i) for Term Loan Adjusted SOFR loans, 8.25% per annum if the total leverage ratio is greater than or equal to 2.75:1.00, 8.00% per annum if the total leverage ratio is less than 2.75:1.00 but greater than or equal to 2.25:1.00, and 7.75% per annum if the total leverage ratio is less than 2.25:1.00 and (ii) for base rate loans, 7.25% per annum if the total leverage ratio is greater than or equal to 2.75:1.00, 7.00% per annum if the total leverage ratio is less than 2.75:1.00 but greater than or equal to 2.25:1.00, and 6.75% per annum if the total leverage ratio is less than 2.25:1.00. In each case, the net leverage is determined as of the last day of each applicable measurement period.

Previous wording

All obligations under the Debt Facilities are unconditionally guaranteed by Lands’ End, Inc. and, subject to certain exceptions, each of its existing and future direct and indirect subsidiaries. The ABL Facility is secured by a first priority security interest in certain working capital of the borrowers and guarantors consisting primarily of accounts receivable and inventory. The Current Term Loan Facility is also secured by a second priority security interest in the same collateral, with certain exceptions.

Current wording

All obligations under the Debt Facilities are unconditionally guaranteed by Lands’ End, Inc. and, subject to certain exceptions, each of its existing and future direct and indirect subsidiaries. The ABL Facility is secured by a first priority security interest in certain working capital of the borrowers and guarantors consisting primarily of accounts receivable and inventory. The Term Loan Facility is also secured by a second priority security interest in the same collateral, with certain exceptions.

Previous wording

The Current Term Loan Facility is also secured by a first priority security interest in certain property and assets, including certain fixed assets such as real estate, stock of subsidiaries and intellectual property, in each case, subject to certain exceptions. The ABL Facility is also secured by a second priority interest in the same collateral, with certain exceptions.

Current wording

The Term Loan Facility is also secured by a first priority security interest in certain property and assets, including certain fixed assets such as real estate, stock of subsidiaries and intellectual property, in each case, subject to certain exceptions. The ABL Facility is also secured by a second priority interest in the same collateral, with certain exceptions.

Previous wording

The Current Term Loan Facility contains financial covenants, including a quarterly maximum total leverage ratio test and a monthly minimum liquidity test.

Current wording

The Term Loan Facility contains financial covenants, including a quarterly maximum total leverage ratio test and a monthly minimum liquidity test.

Previous wording

Under the ABL Facility, if excess availability falls below the greater of 10% of the Loan Cap amount or $15.0 million, the Company will be required to comply with a minimum fixed charge coverage ratio of 1.0 to 1.0.

Current wording

Under the ABL Facility, if excess availability falls below the greater of 10% of the Loan Cap amount or $12.0 million, we will be required to comply with a minimum fixed charge coverage ratio of 1.0 to 1.0.