BALTIMORE, June 21, 2024 /PRNewswire/ — Under Armour, Inc. (NYSE: UA, UAA) today announced that it has entered into an agreement in principle to resolve the previously disclosed securities class action litigation pending in the United States District Court for the District of Maryland (In re Under Armour Securities Litigation). This lawsuit was originally filed in 2017.
The company has consistently denied the accusations and entered into this agreement in principle, which is not an admission or finding of fault or wrongdoing, given the costs and risks inherent in litigation.
Under the terms of the agreement, Under Armour will pay $434 million to settle claims brought on behalf of purchasers of Under Armour’s publicly traded shares from September 16, 2015, to November 1, 2019. Under Armour has also agreed to two governance changes for a specified time period that are detailed in the company’s 8-K filed with the SEC.
The settlement, if approved by the court, would resolve all claims against Under Armour and other defendants in this matter.
“We firmly believe that our sales practices, accounting practices, and disclosures were appropriate, and deny any wrongdoing in this case,” said Mehri Shadman, Under Armour’s Chief Legal Officer and Corporate Secretary. “Today’s announcement allows us to move past this more than seven-year-old matter so we can avoid the ongoing distraction of litigation and provide certainty to the business at a time when we are executing on important strategic priorities.”
The settlement is subject to definitive documentation and final court approval.
The company intends to pay the settlement amount through cash on hand and/or by drawing on its $1.1 billion revolving credit facility. As of March 31, 2024, the company had $859 million of cash and equivalents. As previously disclosed, Under Armour had recorded an accrual of $100 million in litigation reserves related to this matter. As a result of this agreement, the company now expects the total accrual to reach $434 million during the first quarter of fiscal year 2025. Following this settlement, the company expects to end fiscal 2025 with approximately $500 million in cash and cash equivalents and no borrowings outstanding under its $1.1 billion revolving credit facility.
About Under Armour, Inc.
Under Armour, Inc., headquartered in Baltimore, Maryland, is a leading inventor, marketer, and distributor of branded athletic performance apparel, footwear, and accessories. Designed to empower human performance, Under Armour’s innovative products and experiences are engineered to make athletes better. For further information, please visit http://about.underarmour.com.
Forward-Looking Statements
Some of the statements contained in this press release constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts, such as statements in this press release regarding the ability to reach an agreement on definitive documentation with respect to the proposed settlement and to obtain final court approval of the proposed settlement; the ability to satisfy the conditions of the proposed settlement; the charges expected to be incurred and the source of funds to be used to resolve these matters; and our expectations regarding our future cash and liquidity forecasts. The forward-looking statements in this press release reflect our current views and assumptions, as of the date of this press release, about future events. They are subject to risks, uncertainties, assumptions, and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, activity levels, performance, or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect unanticipated events.
SOURCE Under Armour, Inc.