CSS Industries Announces New $125 Million Asset-Based Credit Facility

PLYMOUTH MEETING, Pa.–(BUSINESS WIRE)–CSS Industries, Inc. (NYSE: CSS), a leading consumer products company
serving the craft, gift and seasonal markets, today announced that it
has entered into a new $125 million asset-based senior secured credit
facility (the “ABL Facility”) with JPMorgan Chase Bank, N.A., acting as
the administrative agent, Bank of America, N.A., and KeyBank, National
Association. The ABL Facility also includes a $25 million borrowing
availability expansion feature. Proceeds from the ABL Facility will be
used to refinance the Company’s existing indebtedness, as well as fund
working capital needs and other general corporate purposes. The new
credit facility, which expires in March 2024, replaces the Company’s
prior credit facility, which was scheduled to expire in March 2020.

This new asset-based facility will serve the needs of our business
during our fluctuating working capital cycle, and is expected to provide
us with more than sufficient liquidity to meet our ongoing needs,”
commented Keith W. Pfeil, CSS’ Executive Vice President and Chief
Financial Officer. “In the near term, we will continue to aggressively
pay down our outstanding debt, while we seek to right size our existing
business structure. We would like to thank our new banking partners for
working diligently to complete this new credit facility, and we look
forward to growing and developing our banking relationships with them.”

Borrowings under the ABL Facility generally bear interest at a London
interbank offered rate (“Adjusted LIBO Rate”), plus a margin ranging
from 2.00% to 2.50%. The applicable rates will be determined at the end
of each Company fiscal quarter based upon the Company’s then applicable
fixed charge coverage ratio; however, during the first year of the ABL
facility, the applicable interest rate will be Adjusted LIBO Rate plus
2.50%. The ABL Facility also requires the Company to pay a commitment
fee of 0.25% per annum on the average daily unused portion of the
revolving commitment. At inception, the ABL Facility maintained an
outstanding principal balance of approximately $36.5 million.

About CSS Industries, Inc.

CSS is a creative consumer products company, focused on the craft, gift
and seasonal categories. For these design-driven categories, we engage
in the creative development, manufacture, procurement, distribution and
sale of our products with an omni-channel approach focused primarily on
mass market retailers. Our core products within the craft category
include sewing patterns, ribbons, trims, buttons, and kids crafts. For
the gift category, our core products are designed to celebrate certain
life events or special occasions, with a focus on packaging items, such
as ribbons, bows, bags and wrap, as well as stationery, baby gift items,
and party and entertaining products. For the seasonal category, we focus
on holiday gift packaging items including ribbons, bows, bags, tags and
gift card holders, in addition to specific holiday-themed decorations
and activities, including Easter egg dyes and Valentine’s Day classroom
exchange cards. In keeping with our corporate mission, all of our
products are designed to help make life memorable.

Forward-looking Statements

This press release includes “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995,
including, among others, statements regarding the liquidity expected to
be provided by the ABL Facility, the adequacy of the ABL Facility to
meet the needs of the Company’s business, the Company’s plans to repay
outstanding debt, and to “right size” its business structure.

Forward-looking statements are based on the beliefs of the Company’s
management as well as assumptions made by and information currently
available to the Company’s management as to future events and financial
performance with respect to the Company’s operations. Forward-looking
statements speak only as of the date made. The Company undertakes no
obligation to update any forward-looking statements to reflect the
events or circumstances arising after the date as of which they were
made. Actual events or results may differ materially from those
discussed in forward-looking statements as a result of various factors,
including without limitation, risks associated with the Company’s
overall strategy and its five strategic pillars, including the risk that
the Company may not successfully execute on its strategy and the risk
that execution of the strategy will not yield favorable results;
uncertainties associated with projecting the Company’s future liquidity
needs; risks associated with management projects, including the risk
that anticipated future savings may not be realized in the amounts
currently expected, or at all; risks associated with omni-channel and
other initiatives, including the risk that expected the benefits from
such initiatives may not be realized; risks associated with
restructuring and integration initiatives, including the risk that
expected future savings and/or synergies will not be realized in the
amounts currently expected, or at all; risks associated with the
Company’s previously announced plan to exit a product line and
restructure the specialty gift product line; risks associated with the
recent consolidation of certain operations in the United Kingdom and
Australia; risks associated with the base business, including the risk
that currently forecasted base business sales may not be achieved;
general market and economic conditions; increased competition (including
competition from foreign products which may be imported at less than
fair value and from foreign products which may benefit from foreign
governmental subsidies); information technology risks, such as cyber
attacks and data breaches; increased operating costs, including
labor-related and energy costs and costs relating to the imposition or
retrospective application of duties on imported products; currency risks
and other risks associated with international markets; risks associated
with acquisitions, including difficulties identifying and evaluating
suitable acquisition opportunities, acquisition integration costs and
the risk that the Company may not be able to integrate and derive the
expected benefits and synergies from acquisitions; the risk that
customers may become insolvent, may delay payments or may impose
deductions or penalties on amounts owed to the Company; costs of
compliance with governmental regulations and government investigations;
liability associated with noncompliance with governmental regulations,
including regulations pertaining to the environment, Federal and state
employment laws, and import and export controls and customs laws;
uncertainties associated with projecting the impact on the Company of
new tariffs on products imported from China; and other factors described
more fully in the Company’s annual report on Form 10-K and elsewhere in
the Company’s filings with the Securities and Exchange Commission. As a
result of these factors, readers are cautioned not to place undue
reliance on any forward-looking statements included herein or that may
be made elsewhere from time to time by, or on behalf of, the Company.

Contacts

KEITH PFEIL – CHIEF FINANCIAL OFFICER
610-729-3947
Keith.Pfeil@cssindustries.com

error: Content is protected !!