American Greetings Announces Refinancing of Revolving Credit Facility and Repayment of Term Loan

Jun 16, 2010, 16:01 ET from American Greetings Corporation

CLEVELAND, June 16 /PRNewswire/ -- American Greetings Corporation (NYSE: AM) today announced that it has successfully amended and restated its existing $350 million revolving credit facility.  The amended and restated credit facility will continue to permit borrowings up to $350 million and will mature June 11, 2015.  The credit facility had no borrowings at the closing of the refinancing.

American Greetings has also repaid the entire principle balance outstanding under its $99 million term loan.  The Company used cash on hand to fund the repayment.

Chief Financial Officer Stephen Smith said, "We are very pleased to have refinanced our credit facility despite the recent erratic market conditions.  Our Treasurer, Greg Steinberg, orchestrated a thoughtful process that wisely extended the term to 2015, retained important components from our prior facility and jettisoned components that were no longer applicable.  Our agent banks, PNC Bank as global agent, Bank of America and JPMorgan Chase as co-syndication agents, as well as KeyBank and the Bank of Nova Scotia as co-documentation agents, worked diligently along side Greg and his team to help us achieve this favorable outcome."  

About American Greetings Corporation

For more than 100 years, American Greetings Corporation (NYSE: AM) has been a manufacturer and retailer of innovative social expression products that assist consumers in enhancing their relationships.  The Company's major greeting card lines are American Greetings, Carlton Cards, Gibson, Recycled Paper Greetings and Papyrus, and other paper product offerings include DesignWare party goods and American Greetings and Plus Mark gift-wrap and boxed cards.  American Greetings also has the largest collection of electronic greetings on the Web, including cards available at AmericanGreetings.com through AG Interactive, Inc. (the Company's online division).  AG Interactive also offers digital photo sharing and personal publishing at PhotoWorks.com and Webshots.com and provides a one-stop source for online graphics and animations at Kiwee.com.  In addition to its product lines, American Greetings also creates and licenses popular character brands through the American Greetings Properties group.  Headquartered in Cleveland, Ohio, American Greetings generates annual revenue of approximately $1.6 billion, and its products can be found in retail outlets worldwide.  For more information on the Company, visit http://corporate.americangreetings.com.

Factors That May Affect Future Results

Certain statements in this release, including those under Management Comments and Outlook, may constitute forward-looking statements within the meaning of the Federal securities laws.  These statements can be identified by the fact that they do not relate strictly to historic or current facts.  They use such words as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance.  These forward-looking statements are based on currently available information, but are subject to a variety of uncertainties, unknown risks and other factors concerning the Company's operations and business environment, which are difficult to predict and may be beyond the control of the Company.  Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect the Company's future financial performance, include, but are not limited to, the following:

  • a weak retail environment and general economic conditions;
  • the ability to achieve both the desired benefits from the transaction with Amscan as well as ensuring a seamless transition for affected retail customers and consumers;
  • the Company's successful transition of the Retail Operations segment to its buyer, Schurman Fine Papers, and Schurman Fine Papers' ability to successfully operate its retail operations and satisfy its obligations to the Company;
  • retail consolidations, acquisitions and bankruptcies, including the possibility of resulting adverse changes to retail contract terms;
  • the ability to achieve the desired benefits associated with it's the Company's cost reduction efforts;
  • competitive terms of sale offered to customers;
  • the Company's ability to comply with its debt covenants;
  • the timing and impact of investments in new retail or product strategies as well as new product introductions and achieving the desired benefits from those investments;
  • consumer acceptance of products as priced and marketed;
  • the impact of technology on core product sales;
  • the timing and impact of converting customers to a scan-based trading model;
  • escalation in the cost of providing employee health care;
  • the ability to successfully implement, or achieve the desired benefits associated with, any information systems refresh the Company may implement;
  • the Company's ability to achieve the desired accretive effect from any share repurchase programs;
  • fluctuations in the value of currencies in major areas where the Company operates, including the U.S. Dollar, Euro, U.K. Pound Sterling, and Canadian Dollar; and
  • the outcome of any legal claims known or unknown.

Risks pertaining specifically to AG Interactive include the viability of online advertising, subscriptions as revenue generators, and the ability to adapt to rapidly changing social media and the digital photo sharing space.

In addition, this release contains time-sensitive information that reflects management's best analysis as of the date of this release.  American Greetings does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.  Further information concerning issues that could materially affect financial performance related to forward-looking statements can be found in the Company's periodic filings with the Securities and Exchange Commission, including the "Risk Factors" section of the Company's Annual Report on Form 10-K.

SOURCE American Greetings Corporation



RELATED LINKS

http://corporate.americangreetings.com