Dundalk, Ireland – Cimpress plc amended its senior secured credit facility and has elected to end the related covenant suspension period implemented in April 2020.
“During the height of pandemic-related uncertainty last year, we suspended the financial maintenance covenants associated with our senior secured bank debt to provide flexibility to navigate the pandemic,” said Sean Quinn, executive vice president and chief financial officer. “That flexibility came at the price of taking on expensive second lien debt. We have since proven our ability to deliver solid profits and cash flow despite the significant impact of the pandemic. Between March 31, 2020 and December 31, 2020, we repaid approximately $400 million of debt while continuing to fund significant growth investments, both organically and through acquisition, which we believe will deliver value-creating growth on the other side of the pandemic. We have amended our credit facility and elected to end the covenant suspension period put in place last spring. Our intent is to use proceeds from our credit facility to redeem our $300 million of second lien debt on or soon after the first possible redemption date of May 15, 2021.”
Compared to our financial maintenance covenants before the covenant suspension period, the amended credit facility changes our financial maintenance covenants through and including September 30, 2022 as follows:
Our maximum total leverage covenant will increase from 4.75x to 5.25x trailing-twelve-month EBITDA.
Our maximum senior secured leverage covenant will decrease from 3.25x to 3.00x trailing-twelve-month EBITDA.
Both of the above covenants will reset to their prior levels for our results reported for the quarter ending December 31, 2022.
Our minimum interest coverage ratio will remain at 3.00x trailing-twelve-month EBITDA, but exclude the cash interest expense impact of our $300M of second lien debt if and when we repay it.
In addition, we made changes to several of our negative covenants, including removing most of the limitations on M&A and share repurchases that were in place during the covenant suspension period.
To learn more, visit http://www.cimpress.com.