Danier Leather Inc.

Danier Leather Inc.

August 27, 2015 16:21 ET

Danier Announces Amended and Extended Credit Facility With CIBC

TORONTO, ONTARIO--(Marketwired - Aug. 27, 2015) - Danier Leather Inc. (TSX:DL) ("Danier" or the "Company") announced today that it has entered into a third amended and restated credit agreement (the "Credit Agreement") with its existing lender Canadian Imperial Bank of Commerce ("CIBC"), which converts the Company's existing operating and revolving credit facilities into a senior secured asset-based revolving credit facility with CIBC. The ABL Facility has an initial term of three years, extending the maturity of Danier's facilities to August 27, 2018.

The ABL Facility provides an initial commitment of up to $35 million, which will reduce to $28.5 million if the Company sells its head office location, which sale the Company is pursuing as part of its strategic and operating plans. As part of that commitment, the Credit Agreement provides for the issuance of letters of credit up to a sub-limit of between $5 million and $10 million, depending on the time of year, and foreign exchange contracts to hedge against the Company's U.S. dollar exposure, subject to a specified sub-limit. Borrowings under the ABL Facility are subject to a borrowing base calculated by reference to the Company's eligible accounts receivable, inventory and real property, less availability reserves, priority payables and an availability block calculated in accordance with the Credit Agreement.

"We believe that the amendment and extension of our existing credit facilities allows us to meet our working capital requirements as we continue to reposition our product offerings, rationalize operations and reduce costs," said Jeffrey Wortsman, President and Chief Executive Officer. "The extension of the maturity of our credit facilities also allows us to continue to implement our operational turnaround plan."

The Company's obligations under the Credit Agreement are guaranteed by its material subsidiaries and secured by all of the Company's and its material subsidiaries' present and after-acquired personal property, as well as a mortgage over the land and building comprising the Company's head office location. The Company pays a monthly collateral management fee to CIBC in respect of the ABL Facility, and will also pay fees for any unused portion of the facility, as well as interest and certain other fees in respect of letters of credit and other borrowings under the ABL Facility. The ABL Facility is subject to various financial and other covenants, reporting requirements and restrictions that, if breached, could cause a default and may result in the requirement for immediate repayment of all amounts outstanding under the ABL Facility, as well as other rights and remedies of CIBC. The Company intends to use the ABL Facility to fund its working capital requirements and for general corporate purposes.

A copy of the Credit Agreement will be available under the Company's profile on SEDAR at www.sedar.com.

About Danier

Danier Leather Inc. is a leading integrated designer, manufacturer, and retailer of high-quality fashion-oriented leather apparel and accessories. The Company's merchandise is marketed exclusively under the well-known Danier brand name and is available at its 86 shopping mall, street-front and outlet stores as well as the online store at www.danier.com. For more information about the Company and our products, visit www.danier.com.

Forward-Looking Statements

This press release contains forward-looking information and forward-looking statements which reflect the current view of Danier with respect to the Company's objectives, plans, goals, strategies, results of operations, financial and operating performance and business prospects and opportunities. Wherever used, the words "may", "will", "anticipate", "intend", "estimate", "expect", "plan", "believe" and similar expressions identify forward-looking statements and forward-looking information. Forward-looking statements and forward-looking information should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved. All of the statements in this press release containing forward-looking statements or forward-looking information, if any, are qualified by these cautionary statements.

Forward-looking statements and forward-looking information are based on information available at the time they are made, underlying estimates, opinions and assumptions made by management and management's current good faith belief with respect to future strategies, prospects, events, performance and results and are subject to inherent risks and uncertainties surrounding future expectations generally. Such risks and uncertainties include, but are not limited to, decreases in sales and gross margins from existing stores, a decline in general economic conditions, consumer confidence, or consumer spending or increases in consumer debt levels, risks associated with foreign supply, sourcing and manufacturing, including increasing leather prices and increasing constraints on foreign vendors' capacity, branding, merchandising, allocation, fashion and apparel and leather industry risks that can adversely affect demand for the Company's products and result in inventory mark-downs and reduced gross margin, the Company's inability to successfully implement its strategies and plans or financial, capital expenditure, cost reduction or budgetary activities and initiatives, uncertainty concerning the outcome of the Company's operational turnaround plan and strategic processes, including whether such process will result in any transaction or alternatives, the amount of borrowing availability under the ABL Facility and the Company's ability to meet debt restrictions and covenants, the Company being unable to successfully grow revenues, gross profit, gross margin and generate net earnings or to generate the necessary cash flows and earnings to satisfy its obligations and pursue its objectives, changes in consumer shopping patterns or preferences, increased write-downs or impairment changes on the Company's assets, changes or disruptions in the credit or securities markets, or any other material disruption to or decline in the Company's operations. For additional information with respect to Danier's inherent risks and uncertainties, reference should be made to Danier's continuous disclosure materials filed from time to time with the Canadian Securities Regulatory Authorities, including the Company's most recent annual information form, quarterly and annual reports and financial statements and notes thereto, and supplementary information, which are available on SEDAR at www.sedar.com and in the Investor Relations section of the Company's website at www.danier.com. Additional risks and uncertainties not presently known to the Company or that Danier currently believes to be less significant may also adversely affect the Company.

Danier cautions readers that such factors and uncertainties are not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions prove incorrect, actual strategies, prospects, events, performance and results may vary significantly from those expected. There can be no assurance that the actual strategies, prospects, results, performance, events or activities anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. Potential investors and other readers are urged to consider these factors carefully in evaluating forward-looking information and forward-looking statements and are cautioned not to place undue reliance on any forward-looking information or forward-looking statements. Danier disclaims any intention or obligation to update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.

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