$27.0 Million Commitment Retires $8.5 Million Line of Senior Credit
Sypris Solutions, Inc. (Nasdaq/NM: SYPR) announced today the replacement
of its $8.5 million line of senior credit on October 30, 2015, with a
new $27.0 million loan facility, consisting of a $15.0 million revolving
credit facility and a $12.0 million term loan. Both the revolving credit
facility and the term loan mature in October of 2018. These agreements
contain a number of covenants, borrowing base calculations, and other
terms and conditions as more fully described in the Company’s Form 8-K,
to be filed with the U.S. Securities and Exchange Commission tomorrow
morning. In conjunction with the refinancing, the Company also retired
$3.8 million of its outstanding short-term subordinated debt and
extended the maturity of the remaining $5.5 million in subordinated
notes to January of 2019 from April of 2016.
Commenting on the announcement, Anthony C. Allen, Vice President and
Chief Financial Officer stated, “We are pleased to successfully complete
another important milestone in our journey with the refinancing and
extension of our credit facilities. These new commitments will enable us
to now focus on growth and driving improved profitability through each
of our business units.”
Sypris Solutions is a diversified provider of outsourced services and
specialty products. The Company performs a wide range of manufacturing,
engineering, design and other technical services, typically under
multi-year, sole-source contracts with corporations and government
agencies in the markets for truck components and assemblies and
aerospace and defense electronics. For more information about Sypris
Solutions, visit its Web site at www.sypris.com.
Forward Looking Statements
This press release contains “forward-looking” statements within
the meaning of the federal securities laws. Each forward-looking
statement herein is subject to risks and uncertainties, as detailed in
our most recent Form 10-K and Form 10-Q and other SEC filings.
Briefly, we currently believe that such risks also include the
following, which could cause reduced availability, mandatory prepayments
or early acceleration of our new loans: any inability or failure of the
Company to comply with its covenants, including the new minimum
availability requirement of $4 million; failure to use our best efforts
to enter a satisfactory sale-leaseback of our plant and buildings in
Toluca, Mexico (“Sale-Leaseback”); the requirement in our loan
agreements to prepay on the term loan, either $5 million or all net cash
proceeds, at the election of the term lender from any successful
Sale-Leaseback; the reduction of our availability due to declines in our
borrowing base formula under either the revolving credit or term loan
agreements; and other customary representations, warranties and
covenants, typical of similar credit agreements with alternative,
non-bank lenders. In addition to the foregoing, the following risks
could generally impair our financial performance and results: our
failure to develop and implement plans to mitigate the impact of loss of
revenues from Dana or to adequately diversify our revenue sources on a
timely basis; the costs of our compliance with covenants in, or the
potential default under or acceleration of, our new loan agreements;
volatility of our customers’ forecasts, scheduling demands and
production levels which negatively impact our operational capacity and
our effectiveness to integrate new customers; reliance on major
customers or suppliers; the cost, quality, timeliness, efficiency and
yield of our operations and capital investments, including working
capital, production schedules, cycle times, scrap rates, injuries,
wages, overtime costs, freight or expediting costs; our ability to
successfully develop, launch or sustain new products and programs;
dependence on, retention or recruitment of key employees especially in
challenging markets; inventory valuation risks including excessive or
obsolescent valuations; potential impairments, non-recoverability or
write-offs of assets or deferred costs; our inability to successfully
complete definitive agreements for our targeted acquisitions due to
negative due diligence findings or other factors; declining revenues and
backlog in our Sypris Electronics business lines as we attempt to
transition from legacy products and services into new market segments
and technologies; the costs of compliance with our auditing, regulatory
or contractual obligations; our inability to patent or otherwise protect
our inventions or other intellectual property from potential
competitors; our reliance on third party vendors and sub-suppliers;
adverse impacts of new technologies or other competitive pressures which
increase our costs or erode our margins; cost and availability of raw
materials such as steel, component parts, natural gas or utilities;
regulatory actions or sanctions (including FCPA, OSHA and Federal
Acquisition Regulations, among others); potential weaknesses in internal
controls over financial reporting and enterprise risk management;
disputes or litigation involving customer, supplier, employee, lessor,
landlord, creditor, stockholder, product liability or environmental
claims; U.S. government spending on products and services that Sypris
Electronics provides, including the timing of budgetary decisions;
changes in licenses, security clearances, or other legal rights to
operate, manage our work force or import and export as needed;
breakdowns, relocations or major repairs of machinery and equipment;
pension valuation, health care or other benefit costs; labor relations;
strikes; union negotiations; cyber security threats and disruptions;
changes or delays in customer budgets, funding or programs; failure to
adequately insure or to identify environmental or other insurable risks;
revised contract prices or estimates of major contract costs; risks of
foreign operations; currency exchange rates; war, terrorism, or
political uncertainty; unanticipated or uninsured disasters, losses or
business risks; inaccurate data about markets, customers or business
conditions; or unknown risks and uncertainties.
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