Subsequent Events

9 Months Ended

Oct. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Dividend declaration. On November 21, 2019, the Company's Board of Directors approved a quarterly dividend of $0.58 per share of Common Stock. This quarterly dividend will be paid on January 10, 2020 to shareholders of record on December 20, 2019.

Entry into Merger Agreement. On November 24, 2019, the Registrant entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Registrant, LVMH Moët Hennessy - Louis Vuitton SE, a societas Europaea (European company) organized under the laws of France ("Parent"), Breakfast Holdings Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent ("Holding"), and Breakfast Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Holding ("Merger Sub"). Pursuant to the Merger Agreement, Merger Sub will be merged with and into the Registrant (the "Merger"), with the Registrant continuing as the surviving company in the Merger and a wholly owned indirect subsidiary of Parent.

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each share of common stock, $0.01 par value, of the Registrant ("Common Stock") issued and outstanding immediately prior to the Effective Time (other than shares of Common Stock owned by the Registrant, Parent or any of their respective wholly owned subsidiaries, and shares of Common Stock owned by stockholders of the Registrant who have properly demanded and not withdrawn a demand for appraisal rights under Delaware law) will be converted into the right to receive $135.00 in cash, without interest and less any required tax withholding (the "Per Share Merger Consideration").

The consummation of the Merger is subject to various conditions, including, among others, customary conditions relating to (i) the adoption of the Merger Agreement by holders of a majority of the outstanding shares of the Registrant's Common Stock entitled to vote on such matter at the meeting of stockholders of the Registrant (the "Stockholders Meeting") to be held to vote on the adoption of the Merger Agreement (or any postponement or adjournment thereof), (ii) the expiration or earlier termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, as well as certain non-U.S. regulatory approvals, (iii) clearance by the Committee on Foreign Investment in the United States ("CFIUS"), (iv) the absence of a law or order in effect that enjoins, prevents or otherwise prohibits the consummation of the Merger or any other transactions contemplated under the Merger Agreement issued by a governmental entity; (v) the absence of any legal proceeding seeking to enjoin, prevent or otherwise prohibit the consummation of the Merger or any other transactions contemplated under the Merger Agreement instituted by a governmental entity of competent jurisdiction; and (vi) the absence of a Material Adverse Effect (as defined in the Merger Agreement). The obligation of each party to consummate the Merger is also conditioned on the accuracy of the other party's representations and warranties (subject to certain materiality exceptions) and the other party's compliance, in all material respects, with its covenants and agreements under the Merger Agreement.

The Merger Agreement provides for certain customary termination rights of the Registrant and Parent, including the right of either party to terminate the Merger Agreement if the Merger is not completed on or before August 24, 2020 (the "Outside Date"), provided that the Outside Date may be extended up to an additional 90 days by either party if all conditions are satisfied other than the receipt of regulatory approvals and CFIUS clearance or absence of legal restraints. The Registrant may terminate the Merger Agreement, in certain circumstances, including, prior to obtaining the adoption of the Merger Agreement by holders of a majority of the outstanding shares of the Registrant's Common Stock entitled to vote on such matter at the Stockholders Meeting, to enter into an acquisition agreement with respect to a Superior Proposal (as defined in the Merger Agreement) on the terms set forth in the Merger Agreement. The Merger Agreement also provides that the Registrant will be required to pay Parent a termination fee of $575.0 million in certain circumstances, including if the Registrant terminates the Merger Agreement to enter into an acquisition agreement with respect to a Superior Proposal.

Additional information about the Merger Agreement is set forth in the Company's Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on November 25, 2019.

The Merger Agreement did not impact the Company's consolidated financial statements as of and for the three and nine months ended October 31, 2019.

Income Taxes. Regulatory guidance continues to be issued related to the 2017 U.S. Tax Cuts and Jobs Act. On December 2, 2019, the U.S. Department of Treasury issued guidance related to the Base Erosion Anti-Abuse Tax ("BEAT") as well as U.S. foreign tax credits regulations. The Company is currently evaluating this guidance and will record the impact, if any, in the three months ended January 31, 2020.