ROW Rowe

MCLEAN, Va., Jan. 10 /PRNewswire-FirstCall/ -- The Rowe Companies (AMEX:ROW), a leading furniture manufacturer and home furnishings retailer, announced today that the Company has executed a comprehensive credit agreement with GE Commercial Finance, consisting of a senior secured revolving credit facility of up to $50,000,000 and a senior secured Tranche B loan of $7,000,000 (the "Credit Agreement") to replace its existing term loan and revolving credit facility with Bank of America and capital lease with SunTrust Bank. As an asset-based loan, the amount of the senior secured revolving credit facility that can be drawn at any given time will be determined based on eligible assets, which includes the Company's accounts receivable, inventory, real estate, fixed assets and other assets. Based on current calculations of eligible assets, the Company's current maximum borrowing capacity as of the date of Closing under the Credit Agreement (taking into account the Company's drawing the entire $7,000,000 available under the Tranche B Loan on the closing date) was approximately $46.9 million, of which $33.8 million was used to repay the Company's term loan and revolving credit facility with Bank of America and its capital lease with SunTrust Bank and to pay fees associated with the transaction. Both the interest rate on the revolving credit facility and the interest rate on the Tranche B loan are variable, based on a margin over, at the Company's election, either LIBOR or the greater of the prime rate or the Federal Funds rate plus 50 basis points. In addition, after June 30, 2006, the interest rate on the revolving credit facility will also vary based on Company financial performance. Under the terms of the Credit Agreement, the Company must, by February 10, 2006, complete an offering of equity capital resulting in net proceeds of at least $9.5 million, and secure a commitment for at least an additional $2.0 million in equity capital. Until these additional equity requirements are satisfied, the maximum amount of the revolving facility is limited to $45,000,000. If the Company fails to satisfy these additional equity requirements in the amounts and within the time frames agreed upon, it will be, absent a waiver or amendment from the Lender, in default of the Credit Agreement and, in addition to other rights and remedies reserved to Lender under the Credit Agreement, the amount of eligible assets required to secure any borrowings will be increased until the equity requirements are met. As previously announced, the Company has retained an investment bank to assist it in raising capital. "We are appreciative of the speed and dedication at which GE was able to conclude this financing. We are excited to work with a financial institution that combines speed, flexibility, strength and the ability to execute," said Gerald M. Birnbach, Chairman and President. "We continue to work on initiatives intended to return our Rowe Furniture division to profitability and to continue the growth in Storehouse." The Rowe Companies operates two subsidiaries in the home furnishings industry: Rowe Furniture, Inc., a major manufacturer of quality upholstered furniture serving the middle and upper middle market throughout the U.S.; and Storehouse, Inc., a multi-channel, lifestyle home furnishings business including 69 retail home furnishings stores. Storehouse makes good design accessible by selling an edited assortment of casual, contemporary home furnishings through its stores located in the Southeast, Southwest and Mid- Atlantic markets, its catalog and over the internet. Statements in this press release concerning Rowe's business outlook or future economic performance, anticipated profitability, revenues, expenses or other financial items; together with other statements that are not historical facts, are "forward-looking statements" as that term is defined under Federal Securities Laws. "Forward-looking statements" are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stated in such statements. Such risks, uncertainties and factors include, but are not limited to, industry cyclicality, fluctuations in customer demand and order patterns, the possibility that the capital raising conditions set forth in the GE credit agreement will not be satisfied, in which case the Company would be, absent a waiver of amendment, in default under the credit agreement, the seasonal nature of the business, changes in pricing, and general economic conditions, as well as other risks detailed in Rowe's filings with the Securities and Exchange Commission. DATASOURCE: The Rowe Companies CONTACT: Garry W. Angle, Vice President-Treasurer of The Rowe Companies, +1-540-444-5077 Web site: http://www.therowecompanies.com/

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