New Agreement Expected to Reduce Annual Interest Cost by Approximately $2 Million
WOONSOCKET, R.I., Oct. 16, 2020 (GLOBE NEWSWIRE) -- SUMR Brands ("SUMR" or the "Company") (NASDAQ: SUMR), a global leader in premium infant and juvenile products, today announced that it has entered into a Third Amended and Restated Loan and Security Agreement with Bank of America, N.A. (the “Credit Facility”) that replaces its prior $48.0 million asset-based revolving credit facility (“ABL”) with Bank of America and $17.5 million term loan with Pathlight Capital LLC.
“We’re pleased to announce that the Company has successfully concluded the refinancing of its debt, entering into a new agreement with Bank of America that establishes a solid foundation to support ongoing growth, working capital needs and also significantly reduces future interest expense,” said Stuart Noyes, Interim CEO. “Operating under this new Credit Facility is expected to lower our interest cost by approximately $2.0 million annually based on current borrowing levels.”
Mr. Noyes continued, “This year we have made great progress improving operational efficiencies throughout the organization and the Company returned to profitability. The new Credit Facility represents an important milestone for SUMR as we build on structural improvements and position the Company for growth. We will continue to strategically invest in key business drivers, such as e-commerce expansion, innovative product development, and results-based marketing, while further reducing outstanding debt. We appreciate Bank of America’s partnership and validation of the transformative measures taken by the Company this year and look forward to making continued enhancement to the business to maximize shareholder value.”
The new Credit Facility, solely with Bank of America, consists of a $40.0 million ABL, a $7.5 million term loan, and a $2.5 million FILO (first-in, last-out) loan, for aggregate availability of $50.0 million. The Credit Facility provides adequate liquidity for SUMR with significantly reduced interest rates compared to the Company’s prior financing agreements. After paying off existing debt, the Company had approximately $9 million in availability under the Credit Facility. Additional information may be found in the Company’s Form 8-K filed with the SEC.
About SUMR Brands
Based in Woonsocket, Rhode Island, the Company is a global leader of premium juvenile brands driven by a commitment to people, products, and purpose. The Company is made up of a diverse group of experts with a passion to make family life better by selling proprietary, innovative products across several core categories. For more information about the Company, please visit www.sumrbrands.com.
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 expected benefits of the Company’s new credit facility, including reduced annual interest costs, adequate liquidity, ability to generate cash from operations, and the support of ongoing future growth and working capital needs, and the Company’s future strategic investments and ability to reduce indebtedness. 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 impact of the COVID-19 pandemic on the Company’s supply chain, U.S. operations and sales in the U.S; increased tariffs, additional tariffs or import or export taxes on the cost of its products and therefore demand for its products, or the suspension, non-renewal or revocation of any exclusion from tariffs on its products; the Company’s ability to meet its liquidity requirements; the Company’s ability to comply with the covenants in its credit facility and to maintain availability under its credit facility; the Company’s ability to implement and to achieve the expected benefits and savings of its restructuring initiatives; 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 reliance on foreign suppliers; the Company’s ability to develop, market and launch new products; the Company’s ability to manage inventory levels and meet customer demand; the Company’s ability to grow sales with existing and new customers and in new channels; and other risks as detailed in the Company’s most recent Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information contained in this release.