Contact Information: 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
| Source: Schawk, Inc.
DES PLAINES, IL--(Marketwire - 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 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.