American Apparel Inc. has missed the filing deadline for its annual report with the Securities and Exchange Commission as it struggles to fund its operations and pay interest on its debt.
The company notified the SEC Tuesday that it had missed the Monday deadline — 75 days after the end of its fiscal year on Dec. 31 — for its annual report, or Form 10-K, because it was focusing on putting together a plan to regain compliance with the listing standards of the NYSE MKT exchange. The exchange notified American Apparel that it needed to file a plan to regain compliance by Friday and make progress toward meeting the plan by April 15.
The section of the NYSE MKT code cited by the exchange covers companies with impaired operations that could be unable to meet financial obligations as they mature.
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American Apparel is currently seeking a waiver from Capital One Business Credit Corp. as it failed to adhere to certain covenants of its credit facility with the bank.
The Los Angeles-based retailer said it had “devoted considerable resources” to develop a plan of compliance for the NYSE MKT and was “pursuing financing alternatives as a means to increase the company’s available cash to fund debt service requirements and operational needs.”
Public companies with sales of less than $700 million but more than $75 million have 75 days from the end of the fiscal year to file a 10-K and are required to notify the SEC if they are unable to do so. American Apparel’s 2013 sales were $634 million. It expects a net loss for the year of $122.1 million, with interest and other expenses, on a net basis, rising to $91.8 million from $34.3 million in 2012.
Details involving a waiver or new financing arrangements are necessary both for the plan to regain compliance with NYSE MKT guidelines and the annual report.
As of Feb. 28, the company had $4.9 million in cash and $2.7 million of availability under the Capital One facility. Both figures are substantially lower than the $8.7 million and $6.3 million, respectively, reported for Dec. 31.