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American Apparel Finally Hands Over Their 2nd Quarter Results

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Took 'em long enough!

After months of delays, American Apparel handed over their not so shocking second-quarter results to the SEC on Monday.

According to the report, AA had a loss of $14.7 million and "may not have sufficient liquidity necessary to sustain operations for the next 12 months."

Ouch.

The report goes on to say it's "probable that beginning Jan. 31, 2011, the company will not be in compliance with the minimum consolidated EBIT covenant…".

In other words, American Apparel doesn't think they'll earn the $20 million they said they would in their newest agreement with Lion Capital.

Double ouch!

Dov Charney & Co are working to make amendments so they'll remain in compliance, however there's "substantial doubt that the company will be able to continue as a going concern."

Yikes.

Better stock up on your generic clothes now!

[Image via AP Images.]

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American Apparel Avoids Bankruptcy

Filed under: Dov CharneyAmerican Apparel

American Apparel saved from bankruptcy by lender Lion Capital

Lion Capital has decided to spare American Apparel from bankruptcy, for now.

As part of the new agreement, AA must increase their profitability to stay in their lender's good graces. By January 31st of next year, the clothing company must have made $20 million in earnings before interest, taxes, depreciation, and amortization over the past 12 months.

If they make it to 2013, Dov Charney & Co. will have to pull in $80 million to still be in compliance with the new terms set by Lion Capital.

Think they can do it???

[Image via AP Images.]

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American Apparel In Danger Of Defaulting On Loan!

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Yikes!

After posting a first quarter loss of $17.6 million, American Apparel is thiiiis close to breaching it's second-lien loan of $80 million from Lion Capital.

If Dov Charney & Co. don't come get their shiz together by June 30, the company may default which would prevent them from borrowing under their credit facility.

Hopefully they can sort their issues out or there's going to be lots of angry hipsters.

[Image via AP Images.]

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