PRYOR, Okla., April 17, 2017 /PRNewswire/ -- On April 11, 2017, Orchids Paper Products Company
(NYSE MKT: TIS) (the "Company") entered into Amendment No. 4 (the
"Credit Agreement Amendment") to its Second Amended and
Restated Credit Agreement dated June
25, 2015 by and among the Company, U.S. Bank National
Association ("U.S. Bank") and the other lenders party thereto (the
"Credit Agreement").
Details of the amendments include:
The maximum twelve-month rolling leverage ratio is waived in the
first two quarters of 2017 and allowed to increase to 5.5:1 at
September 30, 2017 prior to being
decreased to 4.5:1 at December 31,
2017 and reverting to 3.5:1 as originally scheduled. These
are attainable targets.
The funding-advance for the Barnwell,
South Carolina, mill building was made concurrent with its
actual completion in April of 2017, making approximately
$6.7 million available to the
Company.
The period during which funds may be drawn under the Draw Loan
is extended to December 25, 2017 to
support the continued development of the Barnwell, South Carolina project.
The maximum twelve-month rolling fixed charge coverage ratio is
lowered to 1.0:1 and 1.05:1 for the quarters ended June 30, 2017 and September 30, 2017, respectively, prior to
reverting to 1.2:1 as originally scheduled.
The Maintenance Capital Expenditure (as defined in the Credit
Agreement) was reduced from approximately $6.0 million to $4.25 million, a more realistic
figure and one that makes meeting the Fixed Charge Coverage Ratio
covenant more attainable.
The definition of the Fixed Charge Coverage Ratio was modified.
In combination with waivers and changes to the Leverage Ratios,
these modifications provide the Company the time necessary to
reduce its debt levels in an orderly manner through increased
earnings from the new business previously announced, collection of
certain outstanding receivables, and other potential actions which
the Company is exploring.
"We are pleased to have the support of our lenders and
appreciate their confidence in the Company's future," said Mr.
Jeff Schoen, Chief Executive
Officer. "The Company views the amendment as being supportive,
particularly the waivers of the leverage-ratio covenants in the
first and second quarters of 2017, bridging the period in 2017 when
operations are ramping-up to meet new demand. These covenant
changes allow Orchids to focus on its business plan to increase
production and sales significantly in the second half of 2017. The
new business we announced in January is on track to begin shipping
in late May with full implementation by July
1."
The foregoing summaries are not complete and are qualified in
their entirety by reference to the full text of the Amendments
attached to the associated Form 8-K.
Forward-Looking Statements
This release contains forward-looking statements that involve
certain contingencies and uncertainties. The Company intends
these forward-looking statements to be covered by the safe harbor
provision for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. These statements
relate to future events or future financial performance, and
involve known and unknown risks, uncertainties and other factors
that may cause its actual results, levels of activity, performance
or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by such forward-looking statements. In some cases,
forward-looking statements can be identified by terminology such as
"may," "should," "could," "expects," "plans," "intends,"
"anticipates," "believes," "estimates," "predicts," "potential,"
"will" or "continue" or the negative of such terms or other
comparable terminology. Although the Company believes that
the expectations reflected in the forward-looking statements are
reasonable, it cannot guarantee future results, levels of activity,
performance or achievements. These statements are only
predictions.
Factors that could materially affect the Company's actual
results, levels of activity, performance or achievements include,
without limitation, those detailed under the caption "Risk Factors"
in the Company's Annual Report on Form 10-K for the year ended
December 31, 2016, as filed with the
Securities and Exchange Commission on March
15, 2017.
The Company's actual results may be materially different from
what it expects. The Company does not undertake any duty to
update these forward-looking statements after the date hereof, even
though the Company's situation may change in the future. All of the
forward-looking statements herein are qualified by these cautionary
statements.
About Orchids Paper Products Company
Orchids Paper Products Company is a customer-focused, national
supplier of high quality consumer tissue products primarily serving
the at home private label consumer market. The Company
produces a full line of tissue products, including paper towels,
bathroom tissue and paper napkins, to serve the value through
ultra-premium quality market segments from its operations in
northeast Oklahoma, Barnwell, South Carolina and Mexicali, Mexico. The Company provides these
products primarily to retail chains throughout the United
States. For more information on the Company and its products,
visit the Company's website at http://www.orchidspaper.com.
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SOURCE Orchids Paper Products Company