SMTC Corporation Amends Debt Agreements to Support Growth
August 12 2019 - 5:30PM
SMTC Corporation (Nasdaq:SMTX), a global electronics manufacturing
services provider and winner of the Frost & Sullivan’s 2019
Best Practices Award for Customer Value Leadership in the
Electronics Manufacturing Services Industry, announced that it has
amended its credit agreements as part of its ongoing activities to
improve its capital structure.
On August 8th SMTC amended its credit agreements and reduced its
Term A loan outstanding balance from $50 million to $40 million.
The amended credit agreements improve our financial covenants,
lowers our cash-interest costs and expands borrowing capacity under
our asset-based revolving credit facility to $65 million from $45
million.
The revised credit agreements are part of the company’s ongoing
strategy to align its capital structure to position for growth. In
late June, SMTC completed a Rights Offering and Registered Direct
Offering that generated aggregate proceeds of approximately $14.6
million. On July 3rd, SMTC used $12 million of those proceeds to
accelerate pay-off of its more expensive and restrictive
outstanding Term B debt.
“We executed on our debt-reshaping strategy and remain committed
to further strengthening our balance sheet through working capital
programs to support the needs of our customers and supply-chain
partners and profitably grow our business,” SMTC Corporation’s
President and CEO Ed Smith said.
Forward-Looking Statements
The statements contained in this release that are not purely
historical are forward-looking statements, which involve risk and
uncertainties that could cause actual results to differ materially
from those expressed in the forward-looking statements. These
statements may be identified by their use of forward looking
terminology such as “anticipates,” “believes,” “can,”
“continue,” “could,” “estimates,” “expects,” “intends,” “may,”
“plans,” “potential,” “predicts,” “should,” or “will” or the
negative of these terms or other and similar words, and include,
but are not limited to, statements regarding the expected outcome
of our capital expenditure initiatives, the anticipated benefits to
our customers of recent facilities improvements, and other. For
these statements, we claim the protection of the safe harbor for
forward looking statements contained in the Private Securities
Litigation Reform Act of 1995. Risks and uncertainties that may
cause future results to differ from forward looking statements
include the challenges of managing quickly expanding operations and
integrating acquired companies, fluctuations in demand for
customers' products and changes in customers' product sources,
competition in the electronics manufacturing services industry,
component shortages, and others risks and uncertainties discussed
in SMTC's most recent filings with the Securities and Exchange
Commission. The forward-looking statements contained in this
release are made as of the date hereof and SMTC assumes no
obligation to update the forward-looking statements, or to update
the reasons why actual results could differ materially from those
projected in the forward-looking statements.
About SMTC
SMTC Corporation was founded in 1985 and acquired MC Assembly
Holdings, Inc. in November 2018. Following this acquisition,
SMTC has more than 50 manufacturing and assembly lines in United
States, China and Mexico which creates a powerful low-to-medium
volume, high-mix, end-to-end global electronics manufacturing
services (EMS) provider. With local support and expanded
manufacturing capabilities globally, including fully integrated
contract manufacturing services with a focus on global original
equipment manufacturers and emerging technology companies,
including those in the Defense and Aerospace, Industrial, Power and
Clean Technology, Medical and Safety, Retail and Payment Systems,
Semiconductors and Telecom, Networking and Communications; and Test
and Measurement industries. As a mid-size provider of end-to-end
EMS, SMTC provides printed circuit boards assemblies production,
systems integration and comprehensive testing services, enclosure
fabrication, as well as product design, sustaining engineering and
supply chain management services. SMTC services extend over the
entire electronic product life cycle from the development and
introduction of new products through to the growth, maturity and
end-of-life phases.
SMTC is a public company incorporated in Delaware with its
shares traded on the Nasdaq National Market System under the symbol
SMTX and was added to the Russell Microcap® Index in 2018. For
further information on SMTC Corporation, please visit our website
at www.smtc.com.
Investor Relations Contact
Peter Seltzberg Managing Director Darrow Associates, Inc.
516-419-9915 pseltzberg@darrowir.com
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