GREENVILLE, Wis., April 12, 2017 (GLOBE NEWSWIRE) -- School Specialty, Inc. (OTCQB:SCOO) (“School Specialty”, “SSI” or “the Company”), a leading distributor of supplies, furniture and both curriculum and supplemental learning resources to the education, healthcare and other marketplaces, today announced that it has successfully completed the closing of a new $140 million term loan with TCW’s Direct Lending Group (“TCW”). In conjunction with the financing, SSI repaid its previous term loan, which had a remaining principal balance of $117.4 million and a maturity date of June 11, 2019.
The new Term Loan will be a 5-year, $140 million facility with $110 million drawn upon closing. The Term Loan will bear interest initially at a rate of LIBOR plus 625 basis points. There is an additional $30 million available to support the strategic initiatives of the Company, subject to certain terms and conditions. The TCW facility contains customary events of default and financial, affirmative and negative covenants, including a senior leverage covenant, a fixed charge coverage covenant and an annual limit on capital leases, product development expenditures and other capital expenditures.
Additionally, in conjunction with the new Term Loan, the Company entered into an amendment to its current $125 million revolving Asset-based Credit Facility (“ABL”) provided by Bank of America and Bank of Montreal. The amendment includes a new lower pricing tier of LIBOR plus 125 basis points, a seasonal increase in eligible accounts receivable for the months of March through August, and the inclusion of additional inventory in the Company’s borrowing base. These provisions will provide additional availability throughout the year. The ABL amendment extends the term of the ABL to February 7, 2022.
The new and amended credit facilities lower the Company’s cost of capital and provide enhanced access to capital to fund strategic initiatives the Company may undertake. The new covenants provide more flexibility than the existing Term Loan structure and overall, the Company anticipates interest savings of approximately $3.0 million over the next 12 months. Additional details of the Term Loan and amendment to the ABL can be found in the Company’s Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission on April 13, 2017.
About School Specialty, Inc.
School Specialty is a leading distributor of innovative and proprietary products, programs and services to the education marketplace. The Company designs, develops, and provides educators with the latest and very best school supplies, furniture and both curriculum and supplemental learning resources. Working in collaboration with educators, School Specialty reaches beyond the scope of textbooks to help teachers, guidance counselors and school administrators ensure that every student reaches his or her full potential. Through its SSI Guardian subsidiary, the Company is also committed to school, healthcare and corporate workplace safety by offering the highest quality curriculum, training and safety and security products. Through its recently launched SOAR Life Products brand, the Company offers thousands of products that sharpen cognitive skills and build physical and mental strength in fun and creative ways. From childhood through adulthood, they help individuals live life to the fullest – engaged, happy and well. SOAR Life Products is a customized offering for hospitals, long-term care, therapeutic facilities, home care, surgery centers, day care centers, physician offices, and clinics. For more information about School Specialty, visit www.schoolspecialty.com.
About TCW Direct Lending
TCW Direct Lending, part of The TCW Group, partners with senior management teams, financial intermediaries, business owners, asset based lenders and financial sponsors to provide customized financing solutions for the middle market. TCW is a leading global asset management firm with a broad range of products across fixed income, equities, emerging markets and alternative investments. With more than four decades of investment experience, TCW today manages over $190 billion in client assets. Through the MetWest Funds, TCW Funds and TCW Alternative Funds families, TCW manages one of the largest mutual fund complexes in the U.S. TCW’s clients include many of the world’s largest corporate and public pension plans, financial institutions, endowments and foundations, as well as financial advisors and high net worth individuals. For more information, please visit www.tcw.com.
Statement Concerning Forward-Looking Information
Any statements made in this press release about School Specialty’s future financial condition, results of operations, expectations, plans, or prospects constitute forward-looking statements. Forward-looking statements also include those preceded or followed by the words "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," “projects,” “should,” "targets" and/or similar expressions. These forward-looking statements are based on School Specialty's current estimates and assumptions and, as such, involve uncertainty and risk. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those contemplated by the forward-looking statements because of a number of factors, including the risk factors described in Item 1A of School Specialty's Form 10-K for the fiscal year ended December 31, 2016, which risk factors are incorporated herein by reference. Any forward-looking statement in this release speaks only as of the date on which it is made. Except to the extent required under the federal securities laws, School Specialty does not intend to update or revise the forward-looking statements.
Ryan M. BohrRyan.Bohr@SchoolSpecialty.com
Investor and Media Relations Contact
School Specialty, Inc