Press release from CNW Group
Hardwoods Distribution Inc. Announces Renewal of Canadian Credit Facility
Thursday, December 01, 2011
Trading Symbol: Toronto Stock Exchange - HWD
LANGLEY, BC, Dec. 1, 2011 /CNW/ - Hardwoods Distribution Inc. ("Hardwoods" or the "Company") (TSX: HWD) today announced the renewal of the $15.0 million revolving credit facility available to its wholly owned Canadian operating subsidiary, Hardwoods Speciality Products LP ("Hardwoods LP").
The term of the renewed revolving credit facility has been extended to August 7, 2016. Highlights of the facility renewal include:
- Hardwoods LP may terminate the facility at any time without prepayment penalty
- The rate of interest charged for Prime-based borrowings was reduced to Prime plus 50 basis points (previously Prime plus 200 bps)
- The rate of interest charged for Bankers Acceptance ("BA") based borrowings was reduced to BA plus 200 basis points (previously BA plus 350 bps)
- Standby fees charged on unused borrowing availability was reduced to 25 basis points (previously 50 bps)
- Hardwoods LP is subject to a fixed charge coverage ratio (calculated on a trailing twelve month basis as the ratio of earnings before interest, taxes, depreciation and amortization less cash taxes less capital expenditures less distributions, divided by interest plus principal payments on capital lease obligations) of not less than 1.1 to 1. However, under the terms of the renewal, this covenant shall not apply so long as the unused availability under the credit line is in excess of $2.0 million (previously the fixed charge coverage ratio applied at all times)
- No closing fee was paid related to the credit facility renewal
All other terms of the renewed credit facility are substantially unchanged from Hardwoods LP's previous revolving credit facility as described in the Hardwoods Annual Information Form dated March 24, 2011, which is available on www.sedar.com.
"We continue to enjoy strong service from our Canadian bankers, are pleased to have renewed our credit arrangements on more favourable terms with them through to August 2016," commented Lance Blanco, Hardwoods' President and CEO. "Hardwoods will benefit from improved borrowing rates and a more flexible covenant under this Canadian credit facility. Combined with our U.S. credit facility which we renewed earlier this year, we have committed financing in place on both sides of the border with unused borrowing capacity available for Hardwoods to pursue its market expansion strategy," said Blanco.
About Hardwoods Distribution Inc.
Hardwoods Distribution Inc. ("Hardwoods" or the "Company") is a publicly traded company that is listed on the Toronto Stock Exchange and trades under the symbol HWD. Hardwoods is one of North America's largest distributors of high-grade hardwood lumber, sheet goods and architectural millwork to the cabinet, moulding, millwork, furniture and specialty wood products industries. The Company currently operates a network of 30 distribution centers in the U.S. and Canada.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
This news release includes forward-looking statements. These involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", "expect", "may", "plan", "will", and similar terms and phrases, including references to assumptions. In particular, this news release contains forward-looking information and statements relating to the expectations of the Company regarding having unused borrowing capacity available for Hardwoods to pursue its market expansion strategy.
These forward looking statements reflect current expectations of the Company's management regarding future events and operating performance as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the failure to receive approval of the conversion from third parties or regulatory authorities or to realize the anticipated benefits of the conversion.
Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements reflect management's current beliefs and are based on information currently available to the Company.
All forward-looking information in this news release is qualified in its entirety by this cautionary statement and, except as may be required by law, the Company undertakes no obligation to revise or update any forward looking information as a result of new information, future events or otherwise after the date hereof.
For further information:
Chief Financial Officer
Phone: (604) 881-1990
Fax: (604) 881-1995