LOS ANGELES, CA – Overhill Farms, Inc. (NYSE Amex: OFI) today announced that it has executed a $30 million three-year senior secured revolving credit facility with Bank of America, N.A.
The Company previously announced the signing of a commitment letter for the facility.
The revolving credit line carries an interest rate of 1.75% over LIBOR (the London Interbank Offered Rate), or slightly over 2% at the current LIBOR rate. The annualized blended rate for the Company's previous borrowings was approximately 5.5%.
The Company has made an initial loan drawdown of $13.2 million, which was used to pay off all of the Company's debt to its previous lenders.
James Rudis, Chairman and Chief Executive Officer of Overhill Farms, stated, "This transaction is a significant positive event for the Company. Reflecting our strong financial position, the new agreement includes improved financial terms, as well as provisions which will allow the Company to consider a broad range of opportunities to improve shareholder's value."
Mr. Rudis said the new facility allows the company to pursue acquisitions and other transactions, such as stock buybacks or dividends, without further lender approval. Additionally, the Company will have the ability to increase the aggregate amount of the financing by $20 million under certain conditions.
Mr. Rudis added, "We look forward to our new relationship with Bank of America, and at the same time we thank our previous lender, Guggenheim Capital Partners, LLC, for a very positive relationship over the last four and a half years."
Overhill Farms is a leading value-added supplier of custom high quality prepared frozen foods for branded retail, private label, foodservice and airline customers. Its product lines include entrées, plated meals, bulk-packed meal components, pastas, soups, sauces, poultry, meat and fish specialties, as well as organic and vegetarian offerings. The Company's capabilities give its customers a one-stop solution for new product development, precise replication of existing recipes, product manufacturing and packaging. Its customers include prominent nationally recognized names such as Jenny Craig, Inc., Safeway Inc., Panda Restaurant Group, Inc., H. J. Heinz Company, Inc., Pinnacle Foods Group LLC and American Airlines, Inc.
This news release contains disclosures that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs and include, but are not limited to, statements about interest cost savings and about the possibility of future acquisitions and other shareholder value enhancement opportunities. For this purpose, statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, or which include words such as "continue," "efforts," "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "strategy," "will," "should," "goal," "target," "prospects," "optimistic," "confident," "likely," "probable" or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates or reduced interest and other costs), on-going business strategies or prospects, and possible future Company actions (including possible acquisitions), which may be provided by management, are also forward-looking statements. We caution that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others: the fact that interest cost savings, as well as the continuing availability of credit under revolving credit facilities are dependent on, among other things, the Company's continued compliance with a variety of financial and operational covenants; the fluctuating interest rate environment; the uncertainty of the availability of economically viable acquisition and other growth opportunities, the Company's ability to execute such transactions and integrate new businesses; and other factors as may be discussed in the Company's Annual Report on Form 10-K for the year ended September 27, 2009, Quarterly Report on Form 10-Q for the quarter ended June 27, 2010 and other reports filed with the Securities and Exchange Commission.
Source: Overhill Farms
