Summer Infant Completes Debt Refinancing
April 22 2015 - 8:00AM
Summer Infant, Inc. ("Summer Infant" or the "Company")
(Nasdaq:SUMR), global leader in premium juvenile products, today
announced that it has completed a restructuring of its debt to
include a $60 million revolving credit facility, a $5 million
"first in last out" (FILO) facility and $10 million term loan
facility, replacing the $80 million revolving credit facility and
$15 million term loan in place since February, 2013.
"We're very pleased to announce the closing of these new credit
facilities, which illustrate the confidence our bank group has in
Summer Infant, resulting in both increased flexibility and
significantly lower interest expense," said Carol Bramson, Chief
Executive Officer. "By reducing the total size of our revolver, we
will lower our facility fees while still having access to
incremental availability, if needed, through a $15 million
accordion feature. In addition, we expect modified covenants and
reporting requirements to result in lower administrative costs and
support our drive to reduce inventory levels. The new agreement is
indicative of our strengthening outlook and is better suited to the
future of Summer Infant, bolstering our balance sheet and improving
the bottom line."
The asset-based revolver will initially bear interest at a rate
equal to LIBOR plus 225 basis points and the FILO facility will
bear interest at a rate equal to LIBOR plus 400 basis points. The
new term loan facility will initially bear interest at a rate equal
to LIBOR plus 400 basis points, as compared to the prior term loan
interest rate of 11.25%. The facilities are secured by
substantially all of the Company's assets and include covenants
related to a maximum leverage ratio as well as customary
affirmative and negative covenants. One-time cash expenses of
approximately $1.0 million, to be recognized in the second quarter
of fiscal 2015, were incurred to consummate this agreement and
replace the prior facilities. However, the new debt is expected to
save Summer Infant approximately $1.0 million in interest expense
annually, or $0.04 per share. Detailed information regarding the
new loan agreements will be included in the Company's Current
Report on Form 8-K to be filed with the Securities and Exchange
Commission.
Bank of America, N.A. served as the administrative agent for the
lenders of these facilities, and Merrill Lynch, Pierce, Fenner
& Smith served as lead arranger and book manager. East Wind
Advisors served as financial advisor to Summer Infant, Inc.
About Summer Infant, Inc.
Based in Woonsocket, Rhode Island, the Company is a global
leader of premium juvenile products for ages 0-3 years which are
sold principally to large North American and international
retailers. The Company currently sells proprietary products in a
number of different categories including nursery audio/video
monitors, safety gates, durable bath products, bed rails, nursery
products, strollers, booster and potty seats, swaddling blankets,
bouncers, travel accessories, highchairs, swings, and infant
feeding products. For more information about the Company, please
visit www.summerinfant.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
Company's expectations regarding savings and operational
flexibility resulting from the restructuring of its credit
facilities, its ability to reduce inventory and its strengthening
outlook. 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 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 dependence on key personnel; the Company's
reliance on foreign suppliers; the Company's ability to develop,
market and launch new products; the Company's ability to grow sales
with existing and new customers and in new channels; the Company's
ability to meet required financial covenants under its loan
agreements; and other risks as detailed in the Company's Annual
Report on Form 10-K for the fiscal year ended January 3, 2015, and
subsequent filings with the Securities and Exchange
Commission. The Company assumes no obligation to update the
information contained in this release.
CONTACT: Chris Witty
Investor Relations
646-438-9385
cwitty@darrowir.com
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