Ct Healthmarket via BizWire
08-06-2003, 01:20 PM
Completes Divestiture of Discontinued Operations
----------------------------------------------------------------------
PALM BEACH, Fla.--(BUSINESS WIRE)--Aug. 6, 2003--Workflow
Management, Inc. (Nasdaq:WORK):
-- Credit facility amendment modifies maturity dates, advance
rates and certain financial covenants
-- Asset sales raise approximately $5.0 million for debt
reduction and certain earn-out payments
-- Company exits folding box, flexible packaging and label
manufacturing operations
Workflow Management, Inc. (Nasdaq:WORK) today announced both a
definitive agreement that amends the Company's credit facility and the
divestiture of certain non-core print manufacturing operations.
Credit Facility Amendment
Workflow Management today announced that it has entered into a
definitive agreement with its senior lenders that amends the Company's
credit facility. Under the terms of the amendment, the $50 million
term loan originally due on December 31, 2003 now matures on May 1,
2004. The $16.8 million term loan and the approximately $100 million
in availability asset-based revolver, both of which were originally
due on June 30, 2005, now mature on August 1, 2004. In addition to
modifying the maturity dates of the Company's senior debt, the credit
facility amendment also provides the Company with improved advance
rates under the asset-based revolver on eligible accounts receivable
and inventory.
"We are very pleased that the process of amending our credit
facility is complete," stated Gary W. Ampulski, President and Chief
Executive Officer. "The credit facility now provides us with the
flexibility to both implement our current business plan and, as
previously announced, to pursue strategic and refinancing alternatives
that will address our credit facility obligations on a more permanent
basis." Ampulski continued, "This process has been a significant team
effort and has consumed considerable attention by management and our
advisors. We are excited about redirecting our efforts to the
opportunities inherent in our business. We are already focusing on
recovering from the impact these distractions have had on our
operations."
As previously announced, at April 30, 2003, the Company had
exceeded certain covenants in the credit facility that limited capital
expenditures and the incurrence of restructuring costs. As part of the
credit facility amendment, the Company's senior lenders have waived
these defaults. The amendment also modifies the calculation of EBITDA
for credit facility covenant purposes to exclude the impact of the
goodwill impairment and the results of discontinued operations and
amends certain financial covenants for future periods in a manner
consistent with the Company's current business plan and forecasts.
As part of the credit facility amendment, the Company also changed
the conditions under which its lenders may exercise warrants to
purchase the Company's common stock and agreed to modify the exercise
schedule of the warrants. In addition, the Company agreed to increase
the number of shares of its common stock potentially issuable upon
exercise of these warrants.
Sale of Discontinued Operations
The Company also reported the successful divestiture of certain
non-core print manufacturing operations. The assets and liabilities of
the divested businesses, which have been excluded from the Company's
historical operating results and classified as discontinued
operations, were sold to a financial buyer for $5.0 million in gross
proceeds. After payment of expenses, the transaction generated net
cash proceeds of approximately $4.9 million. Under the terms of the
credit facility amendment discussed above, the Company will use these
net proceeds to make certain earn-out payments that were due in May
2003 under purchase agreements for prior acquisitions and to reduce
outstanding indebtedness under the credit facility.
"I am pleased that we have successfully completed the sale of our
non-core operations," stated Michael L. Schmickle, Chief Financial
Officer. "Under the business plan adopted by our Board of Directors
this past January, we determined that the long-term strategic
direction of the Company was best served if we divested of certain
print manufacturing businesses. The divestiture enables the Company to
continue its focus on core competencies and generating operating cash
flow."
During its fiscal year ended April 30, 2003, the Company had
recognized a $10.5 million loss, net of taxes, associated with the
discontinued operations. The Company's April 30, 2003 balance sheet
reflected the operations held for sale at their estimated net
realizable value of $5.0 million.
With the divestiture, Workflow has exited the print manufacturing
of various types of specialty packaging, folding boxes and vinyl,
flexographic and silkscreen labels and signs. Although the Company has
discontinued their physical production, Workflow will continue to
offer these printed products to its customers through its extensive
vendor network and its broad North American print outsourcing and
distribution capabilities.
About Workflow Management, Inc.
Workflow Management, Inc. is a leading provider of end-to-end
print outsourcing solutions. Workflow services, from production of
logo-imprinted promotional items to multi-color annual reports, have a
reputation for reliability and innovation. Workflow's complete set of
solutions includes document design and production consulting;
full-service print manufacturing; warehousing and fulfillment; and
iGetSmart(TM) - one the industry's most comprehensive e-procurement,
management and logistics systems. Through custom combinations of these
services, the Company delivers substantial savings to its customers -
eliminating much of the hidden cost in the print supply chain. By
outsourcing print-related business processes to Workflow, customers
streamline their operations and focus on their core business
objectives. For more information, go to our website at
http://www.workflowmanagement.com.
Except for historical information, matters discussed in this press
release are forward-looking statements that involve risks and
uncertainties, and actual results may be materially different. Factors
that could cause actual results to differ include: economic downturns;
changes in customer purchasing patterns; risks associated with our
debt service and our ability to comply with the terms and covenants of
our credit agreement with our lenders; risks associated with
refinancing our existing debt obligations; risks associated with
pursuing and consummating refinancing and other strategic
alternatives, including risks related to our inability to consummate a
transaction; risks associated with future growth; risks associated
with acquisitions; change in customer preferences and trends away from
print; risks associated with foreign and international business;
disruptions in product supplies; decreased availability and increased
cost of paper; competition in our markets; loss of key members of our
management team; reliance on third parties for maintaining our
management information systems; concentration of the Company's common
stock; and volatility of the Company's common stock. The information
included in this press release is operative as of this date only.
Workflow Management, Inc. does not undertake any obligation to update
its forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events. In order to ensure that all investors continue to have equal
access to the same information, Workflow Management, Inc. will refrain
from updating projections made in this press release unless it does so
through means that are designed to provide broad distribution of the
information to the public.
----------------------------------------------------------------------
PALM BEACH, Fla.--(BUSINESS WIRE)--Aug. 6, 2003--Workflow
Management, Inc. (Nasdaq:WORK):
-- Credit facility amendment modifies maturity dates, advance
rates and certain financial covenants
-- Asset sales raise approximately $5.0 million for debt
reduction and certain earn-out payments
-- Company exits folding box, flexible packaging and label
manufacturing operations
Workflow Management, Inc. (Nasdaq:WORK) today announced both a
definitive agreement that amends the Company's credit facility and the
divestiture of certain non-core print manufacturing operations.
Credit Facility Amendment
Workflow Management today announced that it has entered into a
definitive agreement with its senior lenders that amends the Company's
credit facility. Under the terms of the amendment, the $50 million
term loan originally due on December 31, 2003 now matures on May 1,
2004. The $16.8 million term loan and the approximately $100 million
in availability asset-based revolver, both of which were originally
due on June 30, 2005, now mature on August 1, 2004. In addition to
modifying the maturity dates of the Company's senior debt, the credit
facility amendment also provides the Company with improved advance
rates under the asset-based revolver on eligible accounts receivable
and inventory.
"We are very pleased that the process of amending our credit
facility is complete," stated Gary W. Ampulski, President and Chief
Executive Officer. "The credit facility now provides us with the
flexibility to both implement our current business plan and, as
previously announced, to pursue strategic and refinancing alternatives
that will address our credit facility obligations on a more permanent
basis." Ampulski continued, "This process has been a significant team
effort and has consumed considerable attention by management and our
advisors. We are excited about redirecting our efforts to the
opportunities inherent in our business. We are already focusing on
recovering from the impact these distractions have had on our
operations."
As previously announced, at April 30, 2003, the Company had
exceeded certain covenants in the credit facility that limited capital
expenditures and the incurrence of restructuring costs. As part of the
credit facility amendment, the Company's senior lenders have waived
these defaults. The amendment also modifies the calculation of EBITDA
for credit facility covenant purposes to exclude the impact of the
goodwill impairment and the results of discontinued operations and
amends certain financial covenants for future periods in a manner
consistent with the Company's current business plan and forecasts.
As part of the credit facility amendment, the Company also changed
the conditions under which its lenders may exercise warrants to
purchase the Company's common stock and agreed to modify the exercise
schedule of the warrants. In addition, the Company agreed to increase
the number of shares of its common stock potentially issuable upon
exercise of these warrants.
Sale of Discontinued Operations
The Company also reported the successful divestiture of certain
non-core print manufacturing operations. The assets and liabilities of
the divested businesses, which have been excluded from the Company's
historical operating results and classified as discontinued
operations, were sold to a financial buyer for $5.0 million in gross
proceeds. After payment of expenses, the transaction generated net
cash proceeds of approximately $4.9 million. Under the terms of the
credit facility amendment discussed above, the Company will use these
net proceeds to make certain earn-out payments that were due in May
2003 under purchase agreements for prior acquisitions and to reduce
outstanding indebtedness under the credit facility.
"I am pleased that we have successfully completed the sale of our
non-core operations," stated Michael L. Schmickle, Chief Financial
Officer. "Under the business plan adopted by our Board of Directors
this past January, we determined that the long-term strategic
direction of the Company was best served if we divested of certain
print manufacturing businesses. The divestiture enables the Company to
continue its focus on core competencies and generating operating cash
flow."
During its fiscal year ended April 30, 2003, the Company had
recognized a $10.5 million loss, net of taxes, associated with the
discontinued operations. The Company's April 30, 2003 balance sheet
reflected the operations held for sale at their estimated net
realizable value of $5.0 million.
With the divestiture, Workflow has exited the print manufacturing
of various types of specialty packaging, folding boxes and vinyl,
flexographic and silkscreen labels and signs. Although the Company has
discontinued their physical production, Workflow will continue to
offer these printed products to its customers through its extensive
vendor network and its broad North American print outsourcing and
distribution capabilities.
About Workflow Management, Inc.
Workflow Management, Inc. is a leading provider of end-to-end
print outsourcing solutions. Workflow services, from production of
logo-imprinted promotional items to multi-color annual reports, have a
reputation for reliability and innovation. Workflow's complete set of
solutions includes document design and production consulting;
full-service print manufacturing; warehousing and fulfillment; and
iGetSmart(TM) - one the industry's most comprehensive e-procurement,
management and logistics systems. Through custom combinations of these
services, the Company delivers substantial savings to its customers -
eliminating much of the hidden cost in the print supply chain. By
outsourcing print-related business processes to Workflow, customers
streamline their operations and focus on their core business
objectives. For more information, go to our website at
http://www.workflowmanagement.com.
Except for historical information, matters discussed in this press
release are forward-looking statements that involve risks and
uncertainties, and actual results may be materially different. Factors
that could cause actual results to differ include: economic downturns;
changes in customer purchasing patterns; risks associated with our
debt service and our ability to comply with the terms and covenants of
our credit agreement with our lenders; risks associated with
refinancing our existing debt obligations; risks associated with
pursuing and consummating refinancing and other strategic
alternatives, including risks related to our inability to consummate a
transaction; risks associated with future growth; risks associated
with acquisitions; change in customer preferences and trends away from
print; risks associated with foreign and international business;
disruptions in product supplies; decreased availability and increased
cost of paper; competition in our markets; loss of key members of our
management team; reliance on third parties for maintaining our
management information systems; concentration of the Company's common
stock; and volatility of the Company's common stock. The information
included in this press release is operative as of this date only.
Workflow Management, Inc. does not undertake any obligation to update
its forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events. In order to ensure that all investors continue to have equal
access to the same information, Workflow Management, Inc. will refrain
from updating projections made in this press release unless it does so
through means that are designed to provide broad distribution of the
information to the public.
