SUMR Brands Closes on New Credit Agreement for Future Growth, Reflecting Improved Operating Performance
October 16 2020 - 8:00AM
SUMR Brands ("SUMR" or the "Company") (NASDAQ: SUMR), a global
leader in premium infant and juvenile products, today announced
that it has entered into a Third Amended and Restated Loan and
Security Agreement with Bank of America, N.A. (the “Credit
Facility”) that replaces its prior $48.0 million asset-based
revolving credit facility (“ABL”) with Bank of America and $17.5
million term loan with Pathlight Capital LLC.
“We’re pleased to announce that the Company has
successfully concluded the refinancing of its debt, entering into a
new agreement with Bank of America that establishes a solid
foundation to support ongoing growth, working capital needs and
also significantly reduces future interest expense,” said Stuart
Noyes, Interim CEO. “Operating under this new Credit Facility is
expected to lower our interest cost by approximately $2.0 million
annually based on current borrowing levels.”
Mr. Noyes continued, “This year we have made
great progress improving operational efficiencies throughout the
organization and the Company returned to profitability. The new
Credit Facility represents an important milestone for SUMR as we
build on structural improvements and position the Company for
growth. We will continue to strategically invest in key business
drivers, such as e-commerce expansion, innovative product
development, and results-based marketing, while further reducing
outstanding debt. We appreciate Bank of America’s partnership and
validation of the transformative measures taken by the Company this
year and look forward to making continued enhancement to the
business to maximize shareholder value.”
The new Credit Facility, solely with Bank of
America, consists of a $40.0 million ABL, a $7.5 million term loan,
and a $2.5 million FILO (first-in, last-out) loan, for aggregate
availability of $50.0 million. The Credit Facility provides
adequate liquidity for SUMR with significantly reduced interest
rates compared to the Company’s prior financing agreements. After
paying off existing debt, the Company had approximately $9 million
in availability under the Credit Facility. Additional information
may be found in the Company’s Form 8-K filed with the SEC.
About SUMR
Brands
Based in Woonsocket, Rhode Island, the Company
is a global leader of premium juvenile brands driven by a
commitment to people, products, and purpose. The Company is made up
of a diverse group of experts with a passion to make family life
better by selling proprietary, innovative products across several
core categories. For more information about the Company, please
visit www.sumrbrands.com.
Forward-Looking Statements
Certain statements in this release that are not
historical fact may be deemed “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, and the Company
intends that such forward-looking statements be subject to the safe
harbor created thereby. These statements are accompanied by words
such as “anticipate,” “expect,” “project,” “will,” “believes,”
“estimate” and similar expressions, and include statements
regarding the expected benefits of the Company’s new credit
facility, including reduced annual interest costs, adequate
liquidity, ability to generate cash from operations, and the
support of ongoing future growth and working capital needs, and the
Company’s future strategic investments and ability to reduce
indebtedness. The Company cautions that these statements are
qualified by important factors that could cause actual results to
differ materially from those reflected by such forward-looking
statements. Such factors include the impact of the COVID-19
pandemic on the Company’s supply chain, U.S. operations and sales
in the U.S; increased tariffs, additional tariffs or import or
export taxes on the cost of its products and therefore demand for
its products, or the suspension, non-renewal or revocation of any
exclusion from tariffs on its products; the Company’s ability to
meet its liquidity requirements; the Company’s ability to comply
with the covenants in its credit facility and to maintain
availability under its credit facility; the Company’s ability to
implement and to achieve the expected benefits and savings of its
restructuring initiatives; the concentration of the Company’s
business with retail customers; the ability of the Company to
compete in its industry; the Company’s ability to continue to
control costs and expenses; the Company’s reliance on foreign
suppliers; the Company’s ability to develop, market and launch new
products; the Company’s ability to manage inventory levels and meet
customer demand; the Company’s ability to grow sales with existing
and new customers and in new channels; and other risks as detailed
in the Company’s most recent Annual Report on Form 10-K, its
Quarterly Reports on Form 10-Q and other filings with the
Securities and Exchange Commission. The Company assumes no
obligation to update the information contained in this release.
Company Contact:Chris
WittyInvestor Relations646-438-9385cwitty@darrowir.com
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