Workflow Management looking into refinancing alternatives for upcoming bank debt maturities

By Sara Rosenberg

New York, Sept. 16 - Workflow Management Inc. is currently pursuing "various strategic and refinancing alternatives" that would allow the company to repay its $50 million term loan B due May 1, 2004, and term loan A and revolver both due Aug. 1, 2004, according to a filing with the Securities and Exchange Commission.

"However, we do not have any written agreements or firm commitments with respect to any potential refinancing or similar transactions, nor do we anticipate generating operating cash flows that would allow us to repay these obligations directly," the filing said.

As has been previously announced, third parties who are interested in either investing in or acquiring the company have contacted Workflow Management. The board of directors and the financial advisor are looking into these and other alternatives, including a potential recapitalization.

As of Sept. 9, the company has $158.9 million outstanding on its facility and $3.3 million in outstanding letters of credit. The revolver with $92.5 million drawn is at Libor plus 500 basis points, the $16.4 million term loan A at Libor plus 800 basis points and the $50 million term loan B at 11%, 12%, 13% and 14% respectively for the calendar quarters of 2003.

During the three months ended July 31, the company repaid $5 million of revolver debt and borrowed $11.2 million under its revolver.

On Aug. 1, the company amended its credit agreement, waiving defaults of covenants regarding capital expenditures and the incurrence of restructuring costs, modifying the calculation of EBITDA and changing certain financial covenants.

Workflow Management is a Palm Beach, Fla. provider of end-to-end outsource solutions, providing a variety of print and office products and related management services.

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