RH Announces Repayment of $350 Million 0.00% Convertible Senior Notes Due 2019

CORTE MADERA, Calif.–(BUSINESS WIRE)–RH (NYSE:RH) today announced it has repaid the balance of its $350
million in 0.00% Convertible Senior Notes due 2019 at maturity. The
Company used existing cash balances and borrowings under its revolving
credit facility to complete the repayment on June 17, 2019 as expected.

CEO Gary Friedman commented, “Looking back, had we not been
opportunistic in responding to favorable market conditions through our
convertible notes financings in 2014 and 2015, we would not have been in
a position to repurchase $1 billion of our stock when it was undervalued
during 2017, which has proven to be an excellent allocation of capital
for the long-term benefit of our shareholders. We are regularly
evaluating various low interest rate financing alternatives and expect
to follow the same opportunistic capital allocation approach in the
future regarding both sources and uses of capital.”

As previously reported, the Company continues to expect (i) to repay its
$300 million of 0.00% Convertible Senior Notes due 2020 at maturity in
July, 2020 with internally generated cash as well as borrowing under its
existing credit facilities, and (ii) to end its fiscal 2019 year with
net debt to trailing twelve month Adjusted EBITDA of approximately 2.0x.

ABOUT RH

RH (NYSE: RH) is a curator of design, taste and style in the luxury
lifestyle market. The Company offers its collections through its retail
galleries across North America, the Company’s multiple Source Books, and
online at RH.com, RHModern.com, RHBabyandChild.com, RHTeen.com and
Waterworks.com.

NON-GAAP FINANCIAL MEASURES

To supplement its condensed consolidated financial statements, which are
prepared and presented in accordance with Generally Accepted Accounting
Principles (“GAAP”), the Company uses various non-GAAP financial
measures including EBITDA and Adjusted EBITDA (collectively, “non-GAAP
financial measures”). We compute these measures by adjusting the
applicable GAAP measures to remove the impact of certain recurring and
non-recurring charges and gains and the tax effect of these adjustments.
The presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with GAAP.
The Company uses these non-GAAP financial measures for financial and
operational decision making and as a means to evaluate period-to-period
comparisons. The Company believes that they provide useful information
about operating results, enhance the overall understanding of past
financial performance and future prospects, and allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision making. The non-GAAP financial
measures used by the Company in this press release may be different from
the non-GAAP financial measures, including similarly titled measures,
used by other companies.

For more information on the Company’s reports of financial results that
include these and other non-GAAP financial measures, please see the
Company’s previously reported financial results which include a
Reconciliation of GAAP to non-GAAP Financial Measures tables regarding
previously reported non-GAAP financial measures included EBITDA and
Adjusted EBITDA. Such accompanying tables include details on the GAAP
financial measures that are most directly comparable to non-GAAP
financial measures and the related reconciliations between these
financial measures.

FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements within the meaning of
the federal securities laws, including without limitation, statements
regarding: our expectations regarding sources and uses of capital
including (i) remaining opportunistic with respect to both sources and
uses of capital, (ii) that the repurchase $1 billion of our stock in
2017 has proven to be an excellent allocation of capital for the
long-term benefit of our shareholders as well as our $1 billion in share
repurchases remaining an excellent allocation of capital for the
long-term benefit of our shareholders; our expectation that we will end
fiscal 2019 with net debt to trailing twelve month Adjusted EBITDA of
approximately 2.0x; our expectation regarding repayment of our $300
million of 0.00% Convertible Senior Notes due 2020 at maturity in July,
2020 with internally generated cash as well as borrowing under our
existing credit facilities; and any statements or assumptions underlying
any of the foregoing.

You can identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. These statements may
include words such as “anticipate,” “estimate,” “expect,” “project,”
“plan,” “intend,” “believe,” “may,” “will,” “should,” “likely” and other
words and terms of similar meaning in connection with any discussion of
the timing or nature of future events. We cannot assure you that future
developments affecting us will be those that we have anticipated.
Important risks and uncertainties that could cause actual results to
differ materially from our expectations include, among others, risks
related to our dependence on key personnel and any changes in our
ability to retain key personnel; successful implementation of our growth
strategy; risks related to the number of new business initiatives we are
undertaking; successful implementation of our growth strategy including
our real estate transformation and the number of new gallery locations
that we seek to open and the timing of openings; uncertainties in the
current performance of our business including a range of risks related
to our operations as well as external economic factors; general economic
conditions and the housing market as well as the impact of economic
conditions on consumer confidence and spending; changes in customer
demand for our products; our ability to anticipate consumer preferences
and buying trends, and maintaining our brand promise to customers;
decisions concerning the allocation of capital; factors affecting our
outstanding convertible senior notes or other forms of our indebtedness;
our ability to anticipate consumer preferences and buying trends, and
maintain our brand promise to customers; changes in consumer spending
based on weather and other conditions beyond our control; risks related
to the number of new business initiatives we are undertaking; strikes
and work stoppages affecting port workers and other industries involved
in the transportation of our products; our ability to obtain our
products in a timely fashion or in the quantities required; our ability
to employ reasonable and appropriate security measures to protect
personal information that we collect; our ability to support our growth
with appropriate information technology systems; risks related to our
sourcing and supply chain including our dependence on imported products
produced by foreign manufacturers and risks related to importation of
such products including risks related to tariffs, the countermeasures
and mitigation steps that we adopt in response to tariffs and other
similar issues, as well as those risks and uncertainties disclosed under
the sections entitled “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in RH’s most
recent Form 10-K and Form 10-Q filed with the Securities and Exchange
Commission, and similar disclosures in subsequent reports filed with the
SEC, which are available on our investor relations website at ir.rh.com
and on the SEC website at www.sec.gov.
Any forward-looking statement made by us in this press release speaks
only as of the date on which we make it. We undertake no obligation to
publicly update any forward-looking statement, whether as a result of
new information, future developments or otherwise, except as may be
required by any applicable securities laws.

Contacts

Allison Malkin
203-682-8225
[email protected]

RH Announces Repayment of $350 Million 0.00% Convertible Senior Notes Due 2019

CORTE MADERA, Calif.–(BUSINESS WIRE)–RH (NYSE:RH) today announced it has repaid the balance of its $350
million in 0.00% Convertible Senior Notes due 2019 at maturity. The
Company used existing cash balances and borrowings under its revolving
credit facility to complete the repayment on June 17, 2019 as expected.

CEO Gary Friedman commented, “Looking back, had we not been
opportunistic in responding to favorable market conditions through our
convertible notes financings in 2014 and 2015, we would not have been in
a position to repurchase $1 billion of our stock when it was undervalued
during 2017, which has proven to be an excellent allocation of capital
for the long-term benefit of our shareholders. We are regularly
evaluating various low interest rate financing alternatives and expect
to follow the same opportunistic capital allocation approach in the
future regarding both sources and uses of capital.”

As previously reported, the Company continues to expect (i) to repay its
$300 million of 0.00% Convertible Senior Notes due 2020 at maturity in
July, 2020 with internally generated cash as well as borrowing under its
existing credit facilities, and (ii) to end its fiscal 2019 year with
net debt to trailing twelve month Adjusted EBITDA of approximately 2.0x.

ABOUT RH

RH (NYSE: RH) is a curator of design, taste and style in the luxury
lifestyle market. The Company offers its collections through its retail
galleries across North America, the Company’s multiple Source Books, and
online at RH.com, RHModern.com, RHBabyandChild.com, RHTeen.com and
Waterworks.com.

NON-GAAP FINANCIAL MEASURES

To supplement its condensed consolidated financial statements, which are
prepared and presented in accordance with Generally Accepted Accounting
Principles (“GAAP”), the Company uses various non-GAAP financial
measures including EBITDA and Adjusted EBITDA (collectively, “non-GAAP
financial measures”). We compute these measures by adjusting the
applicable GAAP measures to remove the impact of certain recurring and
non-recurring charges and gains and the tax effect of these adjustments.
The presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with GAAP.
The Company uses these non-GAAP financial measures for financial and
operational decision making and as a means to evaluate period-to-period
comparisons. The Company believes that they provide useful information
about operating results, enhance the overall understanding of past
financial performance and future prospects, and allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision making. The non-GAAP financial
measures used by the Company in this press release may be different from
the non-GAAP financial measures, including similarly titled measures,
used by other companies.

For more information on the Company’s reports of financial results that
include these and other non-GAAP financial measures, please see the
Company’s previously reported financial results which include a
Reconciliation of GAAP to non-GAAP Financial Measures tables regarding
previously reported non-GAAP financial measures included EBITDA and
Adjusted EBITDA. Such accompanying tables include details on the GAAP
financial measures that are most directly comparable to non-GAAP
financial measures and the related reconciliations between these
financial measures.

FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements within the meaning of
the federal securities laws, including without limitation, statements
regarding: our expectations regarding sources and uses of capital
including (i) remaining opportunistic with respect to both sources and
uses of capital, (ii) that the repurchase $1 billion of our stock in
2017 has proven to be an excellent allocation of capital for the
long-term benefit of our shareholders as well as our $1 billion in share
repurchases remaining an excellent allocation of capital for the
long-term benefit of our shareholders; our expectation that we will end
fiscal 2019 with net debt to trailing twelve month Adjusted EBITDA of
approximately 2.0x; our expectation regarding repayment of our $300
million of 0.00% Convertible Senior Notes due 2020 at maturity in July,
2020 with internally generated cash as well as borrowing under our
existing credit facilities; and any statements or assumptions underlying
any of the foregoing.

You can identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. These statements may
include words such as “anticipate,” “estimate,” “expect,” “project,”
“plan,” “intend,” “believe,” “may,” “will,” “should,” “likely” and other
words and terms of similar meaning in connection with any discussion of
the timing or nature of future events. We cannot assure you that future
developments affecting us will be those that we have anticipated.
Important risks and uncertainties that could cause actual results to
differ materially from our expectations include, among others, risks
related to our dependence on key personnel and any changes in our
ability to retain key personnel; successful implementation of our growth
strategy; risks related to the number of new business initiatives we are
undertaking; successful implementation of our growth strategy including
our real estate transformation and the number of new gallery locations
that we seek to open and the timing of openings; uncertainties in the
current performance of our business including a range of risks related
to our operations as well as external economic factors; general economic
conditions and the housing market as well as the impact of economic
conditions on consumer confidence and spending; changes in customer
demand for our products; our ability to anticipate consumer preferences
and buying trends, and maintaining our brand promise to customers;
decisions concerning the allocation of capital; factors affecting our
outstanding convertible senior notes or other forms of our indebtedness;
our ability to anticipate consumer preferences and buying trends, and
maintain our brand promise to customers; changes in consumer spending
based on weather and other conditions beyond our control; risks related
to the number of new business initiatives we are undertaking; strikes
and work stoppages affecting port workers and other industries involved
in the transportation of our products; our ability to obtain our
products in a timely fashion or in the quantities required; our ability
to employ reasonable and appropriate security measures to protect
personal information that we collect; our ability to support our growth
with appropriate information technology systems; risks related to our
sourcing and supply chain including our dependence on imported products
produced by foreign manufacturers and risks related to importation of
such products including risks related to tariffs, the countermeasures
and mitigation steps that we adopt in response to tariffs and other
similar issues, as well as those risks and uncertainties disclosed under
the sections entitled “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in RH’s most
recent Form 10-K and Form 10-Q filed with the Securities and Exchange
Commission, and similar disclosures in subsequent reports filed with the
SEC, which are available on our investor relations website at ir.rh.com
and on the SEC website at www.sec.gov.
Any forward-looking statement made by us in this press release speaks
only as of the date on which we make it. We undertake no obligation to
publicly update any forward-looking statement, whether as a result of
new information, future developments or otherwise, except as may be
required by any applicable securities laws.

Contacts

Allison Malkin
203-682-8225
[email protected]

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