WOONSOCKET, RI, June 28, 2018 (GLOBE NEWSWIRE) – Summer Infant, Inc. (“Summer Infant” or the “Company”) (NASDAQ: SUMR), a global leader in premium products for infants and children, today announced that it has completed the closing of an asset-based revolving credit facility $ 60.0 million with Bank of America, NA (BofA) and a $ 17.5 million term loan with Pathlight Capital LLC (together, the “Credit Facility”). The fully committed credit facility provides additional liquidity and more flexible covenants compared to the Company’s existing agreements.
“Our new credit facility gives us the financial flexibility to take advantage of growing demand for our new products, build traction in key distribution channels and facilitate the execution of our long-term growth strategy,” said Mark Messner, Managing Director of Baby Summer. We are delighted that our financial partners Bank of America and Pathlight Capital, both of whom are very familiar with the consumer products and retail industries, have demonstrated their support for our continued success and share our enthusiasm for the trajectory of our businesses. prospects for revenue growth as well as profitability. ”
“We are very pleased to have significantly strengthened our capital structure and liquidity, which are competitive advantages in today’s retail environment,” added Bill Mote, Chief Financial Officer. “The new credit facility offers short- and long-term liquidity enhancements and other benefits to help improve our overall financial performance. Our debt service charges have been reduced while allowing for increased working capital levels as second quarter sales progress to significant sequential growth from the first quarter. We are now well positioned to focus on our organic growth initiatives, including product development, brand expansion and increased operational efficiency. “
The $ 60.0 million senior revolving credit facility with BofA will have a five-year term expiring June 28, 2023, with accrued interest at the Company’s option of LIBOR plus an applicable margin of 1.75 % or 2.00%, depending on the average quarterly availability (as defined in the final agreement), or the base rate of the bank plus an applicable margin of 0.75% or 1.00%, depending on the average quarterly availability. Additionally, the BofA deal has a $ 5 million letter of credit sub-line. As of June 28, 2018, the base rate on loans was 6.0% and the LIBOR rate was 4.125%. The revolving credit facility will be secured by a first lien on the assets of the Company, other than the assets secured by the term loan.
The $ 17.5 million term loan with Pathlight Capital will also have a term of five years and will bear interest at three-month LIBOR plus 9.00%. As of June 28, 2018, the interest rate on the term loan was 11.336%. The term loan will be secured by a first priority lien on the Company’s intellectual property, equipment and interests in its subsidiaries and a second priority lien on the assets of the revolving credit facility, and will amortize at $ 5. 0% per year, payable quarterly, from December 1st. 2018.
The proceeds of the credit facility will be used to refinance existing debt, pay transaction costs and fund ongoing working capital requirements. The Company’s previous credit facility was $ 75.0 million, with a weighted average interest rate in the first quarter of 2018 of 5.0%.
OceanArc Capital Partners LLC acted as exclusive financial advisor to the Company for the transaction.
About Summer Infant, Inc.
Headquartered in Woonsocket, Rhode Island, the company is a global leader in premium infant and child products that are sold primarily to large North American and international retailers. The Company currently sells proprietary products in a number of different categories, including nurseries, audio / video monitors, safety gates, durable bath products, bed rails, nursery products, strollers, booster seats and potty seats, swaddling blankets, loungers, travel accessories, high chairs, swings and infant feeding products. For more information about the Company, please visit www.summerinfant.com.
This press release contains certain statements which may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by these sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements can be identified by their use of terms or phrases, including “expects”, “,”) and similar terms and phrases. Forward-looking statements are based on the current beliefs and expectations of the Company’s management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to occur. differ materially from those set forth in, contemplated by or underlying any forward-looking statements. In this press release, statements regarding our expectations for future growth, the impact of funding on short and long term liquidity and improvements in financial performance, future working capital requirements and sequential growth in the second quarter of fiscal 2018., are forward-looking statements. Actual results may differ from those stated in forward-looking statements. Factors that could cause actual results to differ materially from those of forward-looking statements include, but are not limited to, the risk that we may not be able to refinance our existing credit agreement or do so on terms that are more detrimental to us than the terms described in this press release and the risk that we may require more liquidity than anticipated during the refinancing process and after closing, if the refinancing is consumed. Readers should examine and consider these and other factors that could affect results, as discussed in various disclosures by the Company in its press releases, reports to shareholders and documents filed with the SEC, including its report. annual on Form 10-K filed with the SEC in February. 20, 2018.
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