Orchids Paper Products Company Receives Lender Consent For Amendment Of Credit Agreements
PRYOR, Okla., July 5, 2017 /PRNewswire/ -- On June 30, 2017, Orchids Paper Products Company (NYSE MKT: TIS) (the "Company") entered into Amendment No. 5 (the "Credit Agreement Amendment") to its Second Amended and Restated Credit Agreement dated June 25, 2015 by and among the Company, U.S. Bank National Association ("U.S. Bank") and the other lenders party thereto (the "Credit Agreement").
The Credit Agreement Amendment, among other things, struck the fixed charge coverage for the period ended June 30, 2017, thereby also waiving a requirement for a Cash Reserve, as defined in the Credit Agreement, to be funded by that date. Covenants for future periods remain unchanged from the prior amendment. Additionally, the Company agreed not to make any dividend or other distribution payment with respect to its equity unless the Company has achieved a Leverage Ratio of less than 4.0:1.0 for two consecutive fiscal quarters and no Default or Event of Default (as defined in the Credit Agreement) exists or would exist following such payment. The amount and timing of dividend payments otherwise remains subject to the judgment and approval of the Board of Directors.
The Company is also currently exploring the refinancing of some or all of its current outstanding indebtedness with the goals of increasing the Company's financial flexibility and creating greater available liquidity, subject to market conditions. The Company is considering a range of possible refinancing alternatives.
The Company will target any potential refinancing transaction to close and fund in the third quarter of 2017. Consummation of the potential refinancing is subject to market and other customary conditions, including, among other things, the execution of definitive documentation. There can be no assurances as to the terms and conditions on which the potential refinancing maybe consummated, or that the potential refinancing will be consummated.
Jeff Schoen, Chief Executive Officer, stated, "The continuing strong support of our banks by adjusting covenants to reflect present market conditions and Orchids' forward looking plan is appreciated and we believe, indicates their faith in our future and growth. We continue to be confident that the completion of the Barnwell, South Carolina mill and the increase in sales resulting from the announced new business, both of which occurred in June, bode well for Orchids' forward-looking prospects, and the expected growth in earnings we believe will bring our financial leverage measures back in line over the subsequent periods. In the meantime, debt refinancing alternatives will be considered to meet liquidity requirements which we anticipate would minimize any long-term dilution of shareholders."
The foregoing summaries are not complete and are qualified in their entirety by reference to the full text of the Amendments attached to the associated Form 8-K filed on July 5, 2017.
This release contains forward-looking statements that involve certain contingencies and uncertainties. The Company intends these forward-looking statements to be covered by the safe harbor provision for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause its actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "should," "could," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "potential," "will" or "continue" or the negative of such terms or other comparable terminology. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. These statements are only predictions.
Factors that could materially affect the Company's actual results, levels of activity, performance or achievements include, without limitation, those detailed under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on March 15, 2017.
The Company's actual results may be materially different from what it expects. The Company does not undertake any duty to update these forward-looking statements after the date hereof, even though the Company's situation may change in the future. All of the forward-looking statements herein are qualified by these cautionary statements.
About Orchids Paper Products Company
Orchids Paper Products Company is a customer-focused, national supplier of high quality consumer tissue products primarily serving the at home private label consumer market. The Company produces a full line of tissue products, including paper towels, bathroom tissue and paper napkins, to serve the value through ultra-premium quality market segments from its operations in northeast Oklahoma, Barnwell, South Carolina and Mexicali, Mexico. The Company provides these products primarily to retail chains throughout the United States. For more information on the Company and its products, visit the Company's website at http://www.orchidspaper.com.
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SOURCE Orchids Paper Products Company
Released July 5, 2017