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8-K - FORM 8-K - SCHAWK INC | f8k_011210.htm |
EXHIBIT
99.1
AT
SCHAWK, INC.:
Timothy
Allen
Vice
President, Finance
Operations
and Investor Relations
847-827-9494
timothy.allen@schawk.com
|
AT DRESNER CORPORATE
SERVICES:
Investors: Philip
Kranz
312-780-7240
pkranz@dresnerco.com
|
SCHAWK,
INC. COMPLETES REFINANCING OF ITS
REVOLVING
CREDIT FACILITY
Increases
facility by $10 million to $90 million
Des Plaines, IL, January 12, 2010 —
Schawk, Inc. (NYSE: SGK), a leading provider of brand point management
services, enabling companies of all sizes to connect their brands with consumers
to create deeper brand affinity, announced today the successful refinancing of
its $80 million revolving credit facility.
The new
$90 million senior secured revolving credit facility, which matures in July
2012, lowers the Company’s current interest rate (at closing) by approximately
175 basis points for revolver-based borrowings. The facility bears interest at a
rate of Libor plus a margin that varies with the Company’s leverage
ratio. At closing, that margin is 300 basis points. The
facility also provides the Company with greater flexibility in areas such as
acquisitions and the payment of cash dividends.
Additionally,
the facility allows for $10 million of non-committed accordion financing to fund
acquisitions as detailed under the terms of the credit agreement. The
Company’s previous revolving credit facility of $80 million was originally due
to expire on January 28, 2010.
The
outstanding amount borrowed under the former $80 million revolving credit
facility at December 31, 2009 was approximately $20 million. The
unutilized portion of the new $90 million facility will be used for general
corporate purposes, such as working capital and capital
expenditures. Additionally, together with anticipated cash generated
from operations, the unutilized portion of the facility will provide financing
flexibility and support in the funding of principal payments due in 2010 and
succeeding years on the Company’s other long-term debt obligations.
Total
Company debt outstanding, inclusive of the revolving credit facility, at
December 31, 2009, is approximately $77.6 million, which reflects a net debt
reduction of approximately $58.2 million since December 31, 2008.
David A.
Schawk, president and chief executive officer, commented, “We believe the new
revolving credit facility reflects confidence in the Company’s financial
performance and strategic direction. Importantly, we expect the new
facility to provide us with an increased
-more-
Schawk, Inc.
Add 1
ability
to grow and increase shareholder value while also affording us the necessary
flexibility to fund our operations. Furthermore, we are pleased that
the new facility will lower the overall borrowing costs for the Company. We
appreciate the strong support that we have received from our lender
group.”
Timothy
J. Cunningham, executive vice president and chief financial officer, further
commented, “We were also pleased that we received proposed commitments in excess
of the total facility amount that we sought and had strong interest from new
potential lenders that were not participants in the previous revolving credit
facility. The Company’s debt reduction activities over the last nine
months of 2009 and the cost reduction initiatives over the last seven quarters
have strengthened Schawk’s financial position and have contributed to this
successful refinancing.”
The
definitive revolving credit agreement, which includes the specific terms and
conditions governing the Company’s new credit facility, will be included in a
Current Report on Form 8-K expected to be filed by the Company with the
Securities and Exchange Commission on or about January 13, 2010.
J.P.
Morgan Securities, Inc. led the refinancing transaction in a five-member
syndicate of financial institutions which included Bank of America, JPMorgan
Chase Bank N.A., PNC Bank, Wells Fargo Bank, and Wintrust Financial
Corporation.
About
Schawk, Inc.
Schawk,
Inc., (NYSE: SGK),
is a leading provider
of brand point management services, enabling companies of all sizes to connect
their brands with consumers to create deeper brand affinity. With a global
footprint of 48 offices, Schawk helps companies create compelling and consistent
brand experiences by providing integrated strategic, creative and executional
services across brand touchpoints. Founded in 1953, Schawk is trusted by many of
the world’s leading organizations to help them achieve global brand
consistency. For more
information about Schawk, visit http://www.schawk.com.
Safe Harbor
Statement
Certain
statements in this press release are forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and
are subject to the safe harbor created thereby. These statements are made based
upon current expectations and beliefs that are subject to risk and uncertainty.
Actual results might differ materially from those contained in the
forward-looking statements because of factors, such as, among other
things, the completion of the Company’s review and audit of its
financial results for the year ended December 31, 2009, which may necessitate
changes from the estimates provided herein; unanticipated difficulties
associated with additional accounting issues, if any, which may cause our
investors to lose confidence in our reported financial information and may have
a negative impact on the trading price of our stock; our ability to remedy known
internal control deficiencies and weaknesses and the discovery of future control
deficiencies or weaknesses, which may require substantial costs and resources to
rectify; higher than expected costs, or unanticipated difficulties associated
with, integrating acquired operations; higher than expected costs associated
with compliance with legal and regulatory requirements; the strength of the
United States economy in general and, specifically, market conditions for the
consumer products industry; the level of demand for Schawk's services; changes
in or weak consumer confidence and consumer spending; unfavorable foreign
exchange rate fluctuations; loss of key management and operational personnel;
our ability to implement our growth strategy, rebranding initiatives and cost
reduction plans and to realize anticipated cost savings; the ability of the
Company to comply with the financial covenants contained in its debt agreements
and obtain waivers or amendments in the event of non-compliance with such
covenants; the stability of state, federal and foreign tax laws; our continued
ability to identify and exploit industry trends and exploit technological
advances in the imaging industry; our ability to implement restructuring plans;
the stability of political conditions in foreign countries in which we have
production capabilities; terrorist attacks and the U.S. response to such
attacks; as well as other factors detailed in Schawk, Inc.'s filings with the
Securities and Exchange Commission.
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