Cherokee (CHKE) to Offer Common Stock; Announces Preliminary Financial Results

November 28, 2016 4:15 PM EST

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Cherokee Inc. (NASDAQ: CHKE) announced the launch of a public offering of shares of its common stock, announced preliminary financial results for its third quarter fiscal 2017 and provided guidance on the fiscal years ending January 28, 2017 and February 3, 2018.

Launch of Public Offering

Cherokee today announced that it intends to offer and sell, subject to market and other conditions, shares of its common stock in a public offering pursuant to an effective shelf registration statement. Roth Capital Partners is acting as the sole manager for the offering.

Cherokee expects to use the net offering proceeds to fund a portion of the proposed acquisition of Hi-Tec Sports International Holdings B.V. (the “Hi-Tec Acquisition”), as announced today. To the extent that the net proceeds are not applied to the Hi-Tec Acquisition, Cherokee intends to use such proceeds for general corporate purposes.

Preliminary Third Quarter Fiscal 2017 Results

For the quarterly period ended October 29, 2016, Cherokee anticipates revenues of $6.5 million, adjusted EBITDA of $1.6 million and adjusted earnings per share on a fully-diluted basis (“Adjusted EPS”) of $0.08. Revenues were lower from the $8.1 million reported for the three months ended October 31, 2015 primarily as a result of the expected decrease in North American royalty revenues as the Company transitions its focus from Target to its new wholesale licensing partners. As of October 29, 2016, the Company’s cash and cash equivalents amounted to $7.5 million and total debt, comprising long-term debt and current portion of long-term debt, amounted to $17.2 million.



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