A. Schulman Announces Amendment to Credit Agreement
October 10 2017 - 4:44PM
A. Schulman, Inc. (Nasdaq:SHLM) announced today that it
has successfully completed an amendment to the Company’s credit
agreement, providing the Company with additional flexibility in its
total net leverage financial covenant, with step-downs reverting to
existing levels beginning with the fiscal quarter ended
November 30, 2019.
Pursuant to the amendment, the adjustment to the
total net leverage covenant applicable to certain of the Company’s
lenders is as follows:
Fiscal Quarter Ended |
Existing Requirement |
New Requirement |
November 30, 2017 & February 28, 2018 |
4.25x |
5.00x |
May 31, 2018 & August 31, 2018 |
4.25x |
4.75x |
November 30, 2018; February 28, 2019; May 31, 2019 &
August 31, 2019 |
4.00x |
4.50x |
On and after November 30, 2019 |
4.00x |
4.00x |
No other changes were requested. Complete
information regarding the terms of the amendment can be found on
the Company’s Form 8-K filed with the Securities and Exchange
Commission today.
“We are pleased to have the continued support of
our lenders and appreciate the confidence they maintain in the
Company’s future,” said Joseph M. Gingo, chairman, president and
chief executive officer. “This timely covenant action provides us
with the flexibility we need to continue to invest in our
operations, while steadily reducing our debt levels. Since I
returned as the Company’s chief executive officer in August 2016,
we have systematically reset the business in order to deliver the
progressive, long-term shareholder value creation our investors
have come to expect from A. Schulman. As a result of those efforts,
combined with our additional financial flexibility, I am convinced
we are on a recovery path to deliver improving operational and
financial performance worldwide.”
About A. Schulman,
Inc. A. Schulman, Inc. is a leading international
supplier of high-performance plastic compounds and resins
headquartered in Akron, Ohio. Since 1928, the Company has
been providing innovative solutions to meet its customers’
demanding requirements. The Company’s customers span a wide range
of markets such as packaging, mobility, building &
construction, electronics & electrical, agriculture, personal
care & hygiene, sports, leisure & home, custom services and
others. The Company employs approximately 4,900 people and has 54
manufacturing facilities globally. A. Schulman reported
net sales of approximately $2.5 billion for the fiscal
year ended August 31, 2016. Additional information
about A. Schulman can be found at www.aschulman.com.
Cautionary StatementsA number
of the matters discussed in this document that are not historical
or current facts deal with potential future circumstances and
developments and may constitute “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements can be identified by the fact that
they do not relate strictly to historic or current facts and relate
to future events and expectations. Forward-looking statements
contain such words as “anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” “believe,” and other words and terms
of similar meaning in connection with any discussion of future
operating or financial performance. Forward-looking statements are
based on management’s current expectations and include known and
unknown risks, uncertainties and other factors, many of which
management is unable to predict or control, that may cause actual
results, performance or achievements to differ materially from
those expressed or implied in the forward-looking statements.
Important factors that could cause actual results to differ
materially from those suggested by these forward-looking
statements, and that could adversely affect the Company’s future
financial performance, include, but are not limited to, the
following:
- worldwide and regional economic, business and political
conditions, including continuing economic uncertainties in some or
all of the Company’s major product markets or countries where the
Company has operations;
- the effectiveness of the Company’s efforts to improve operating
margins through sales growth, price increases, productivity gains,
and improved purchasing techniques;
- competitive factors, including intense price competition;
- fluctuations in the value of currencies in areas where the
Company operates;
- volatility of prices and availability of the supply of energy
and raw materials that are critical to the manufacture of the
Company’s products, particularly plastic resins derived from oil
and natural gas;
- changes in customer demand and requirements;
- effectiveness of the Company to achieve the level of cost
savings, productivity improvements, growth and other benefits
anticipated from acquisitions and the integration thereof, joint
ventures and restructuring initiatives;
- escalation in the cost of providing employee health care;
- uncertainties and unanticipated developments regarding
contingencies, such as pending and future litigation and other
claims, including developments that would require increases in our
costs and/or reserves for such contingencies;
- the performance of the global automotive market as well as
other markets served;
- further adverse changes in economic or industry conditions,
including global supply and demand conditions and prices for
products;
- operating problems with our information systems as a result of
system security failures such as viruses, cyber-attacks or other
causes;
- our current debt position could adversely affect our financial
health and prevent us from fulfilling our financial obligations;
and
- failure of counterparties to perform under the terms and
conditions of contractual arrangements, including suppliers,
customers, buyers and sellers of a business and other third parties
with which the Company contracts.
The risks and uncertainties identified above are
not the only risks the Company faces. Additional risk factors that
could affect the Company’s performance are set forth in the
Company’s Annual Report on Form 10-K for the fiscal year ended
August 31, 2016. In addition, risks and uncertainties not presently
known to the Company or that it believes to be immaterial also may
adversely affect the Company. Should any known or unknown risks or
uncertainties develop into actual events, or underlying assumptions
prove inaccurate, these developments could have material adverse
effects on the Company’s business, financial condition and results
of operations.
SHLM_ALL
ContactJennifer K. BeemanVice President,
Corporate Communications & Investor RelationsA. Schulman,
Inc.3637 Ridgewood RoadFairlawn, Ohio 44333Tel: 330-668-7346Email:
Jennifer.Beeman@aschulman.com www.aschulman.com
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