PRYOR, Okla., July 5, 2017 /PRNewswire/ -- On June 30, 2017, Orchids Paper Products Company
(NYSE MKT: TIS) (the "Company") entered into Amendment No. 5 (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").
The Credit Agreement Amendment, among other things, struck the
fixed charge coverage for the period ended June 30, 2017, thereby also waiving a requirement
for a Cash Reserve, as defined in the Credit Agreement, to be
funded by that date. Covenants for future periods remain unchanged
from the prior amendment. Additionally, the Company agreed not to
make any dividend or other distribution payment with respect to its
equity unless the Company has achieved a Leverage Ratio of less
than 4.0:1.0 for two consecutive fiscal quarters and no Default or
Event of Default (as defined in the Credit Agreement) exists or
would exist following such payment. The amount and timing of
dividend payments otherwise remains subject to the judgment and
approval of the Board of Directors.
The Company is also currently exploring the refinancing of some
or all of its current outstanding indebtedness with the goals of
increasing the Company's financial flexibility and creating greater
available liquidity, subject to market conditions. The Company is
considering a range of possible refinancing alternatives.
The Company will target any potential
refinancing transaction to close and fund in the third quarter
of 2017. Consummation of the potential refinancing is subject to
market and other customary conditions, including, among other
things, the execution of definitive documentation. There can be no
assurances as to the terms and conditions on which the potential
refinancing maybe consummated, or that the potential refinancing
will be
consummated.
Jeff Schoen, Chief Executive
Officer, stated, "The continuing strong support of our banks by
adjusting covenants to reflect present market conditions and
Orchids' forward looking plan is appreciated and we believe,
indicates their faith in our future and growth. We continue to be
confident that the completion of the Barnwell, South Carolina mill and the increase
in sales resulting from the announced new business, both of which
occurred in June, bode well for Orchids' forward-looking
prospects, and the expected growth in earnings we believe will bring our financial leverage
measures back in line over the subsequent periods. In the meantime,
debt refinancing alternatives will be considered to meet liquidity
requirements which we anticipate
would minimize any long-term dilution of shareholders."
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 filed on July 5, 2017.
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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/orchids-paper-products-company-receives-lender-consent-for-amendment-of-credit-agreements-300483777.html
SOURCE Orchids Paper Products Company