WOONSOCKET, R.I., May 30, 2018 (GLOBE NEWSWIRE) -- Summer Infant, Inc. ("Summer Infant" or the "Company") (SUMR), a global leader in premium infant and juvenile products, today announced that it has executed commitment letters for an amended and extended $60.0 million asset-based revolving credit facility with Bank of America, N.A. and a $17.5 million term loan with Pathlight Capital LLC (together, the “Credit Facility”). The fully committed Credit Facility is expected to close, subject to customary conditions, in June 2018 and will provide significant incremental liquidity compared to the Company’s existing agreements.
“As we execute plans to streamline the Company, invigorate our channel strategy, and bring new products to market, we saw the need for greater financial flexibility and long-term growth capital – which this Credit Facility will ensure,” said Mark Messner, Chief Executive Officer. “We appreciate the continued support by Bank of America and are excited to partner with them and Pathlight Capital to strengthen our outlook and process improvement initiatives. The Credit Facility will provide a solid foundation for us to advance our focus on product development, brand expansion, and increased operating efficiency, as we work to accelerate top line growth and increase returns to shareholders.”
“This Credit Facility represents the culmination of many months working to construct an appropriate vehicle to take Summer Infant to the next level, and we are pleased to have had multiple financing commitments from which to choose,” added Bill Mote, Chief Financial Officer. “The new structure will streamline covenants, feature substantially lower amortization levels, and provide additional long-term liquidity for the Company.”
The $60.0 million senior revolving credit facility with Bank of America will have a five year term, with interest accruing at either LIBOR plus an applicable margin of 1.75% or 2.00%, depending on average quarterly Availability (as defined in the definitive agreement and expected to be similar to the Company’s existing credit facility with Bank of America), or the bank’s base rate plus an applicable margin of 0.75% or 1.00%, depending on average quarterly Availability. The revolving credit facility will be secured by a first priority lien on the Company’s assets, other than assets secured by the term loan. The $17.5 million term loan with Pathlight Capital will also have a five-year term and accrue interest at three-month LIBOR plus 9.00%. The term loan will be secured by a first priority lien on the Company’s intellectual property, equipment and interests in its subsidiaries and amortize at 5 percent per year, payable quarterly, beginning December 1, 2018. Proceeds from the Credit Facility will be used to refinance existing indebtedness, pay any transaction costs, and to finance ongoing working capital needs. The closing of the revolving credit facility and the term loan remain conditional upon receipt by the lenders of certain final deliverables, including the execution of definitive loan and security documentation, minimum available liquidity, and completion of any remaining diligence.
OceanArc Capital Partners LLC acted as the Company’s exclusive financial advisor for the transaction.
About Summer Infant, Inc.
Based in Woonsocket, Rhode Island, the Company is a global leader of premium infant and juvenile products which are sold principally to large North American and international retailers. The Company currently sells proprietary products in a number of different categories including nursery, audio/video monitors, safety gates, durable bath products, bed rails, nursery products, strollers, booster and potty seats, swaddling blankets, bouncers, travel accessories, highchairs, swings, and infant feeding products. For more information about the Company, please visit www.summerinfant.com.
This press release contains certain statements that may be considered 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 those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases, including "expects," "expected," "will," "would," "could," "intends," "believes," "anticipates," "future," and similar terms and phrases. Forward-looking statements are based upon 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 differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. In this press release, statements relating our refinancing effort, the occurrence and expected timing of the refinancing, the expected conditions to the consummation of the refinancing, the adequacy of our resources and liquidity during the refinancing process, the terms and use of proceeds of the prospective asset-based revolving credit facility and term loan, and our future liquidity, among others, are forward-looking statements. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the risk that we are unable 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 require greater liquidity than we expect during the refinancing process and following the closing, if the refinancing is consummated. Readers should review and consider these and other factors that could impact results as provided in various disclosures by the Company in its press releases, stockholder reports, and filings with the SEC, including its Annual Report on Form 10-K filed with the SEC on February 20, 2018.