Gerald Mahoney takes Interim CEO Position at Workflow Management, Inc.
Press release from the issuing company
- Tom D'Agostino, Sr. to assume the role of non-executive Chairman
- Steve R. Gibson, President of the Printing Division, has resigned
PALM BEACH, Fla.--Jan. 15, 2003--Workflow Management Inc., announced today that it has secured a new credit agreement and that Tom D'Agostino, Sr. is stepping aside from his duties as Chief Executive Officer and President to assume the role of non-executive Chairman effective immediately.
Mr. D'Agostino will be replaced on an interim basis by Gerald F. Mahoney, a current member of the Company's Board of Directors and the former Chairman and CEO of Mail-Well, Inc., a commercial printing, envelope and forms manufacturer.
The Company indicated that it has signed an agreement on a new credit facility that stabilizes the Company's relationship with its lenders and provides the Company time to strengthen its balance sheet when more favorable capital markets exist. The new credit agreement has a final maturity date of June 30, 2005.
Workflow's new credit agreement consists of three separate facilities: a 30-month revolving credit facility of approximately $100 million, a 30-month $30 million senior term loan that will be paid down over its term and a one-year $50 million term loan. The blended LIBOR-based interest rate on the new facilities will be approximately 9%.
The new credit agreement is an outgrowth of Workflow's business plan that was delivered to the banks in accordance with the terms of the Company's most recent credit facility amendment. The plan was developed in cooperation with the Special Committee of the Board of Directors and the Special Committee's outside advisors. This Special Committee was comprised of four independent members of the Board.
In connection with the development of the business plan delivered to the Company's bank group, the Special Committee's principal recommendations, which have been approved by the Board as a whole, included the following:
* The Company should focus on its two key business units, Printing and Solutions, which have had shown relatively strong performance and consistent cash flow during difficult market conditions.
* The Company should not pursue significant asset sales in the immediate future. Current market conditions are such that major asset dispositions are unlikely to best serve the interests of shareholders.
* In light of the strategic decision to keep the Printing and Solutions Divisions, steps should be taken to achieve additional operational efficiencies.
* The Company should explore opportunities and strategies to reduce its debt and strengthen its balance sheet as soon as market conditions permit. This could include a capital markets transaction.
In addition, Chairman and CEO Tom D'Agostino, Sr., announced that he is assuming the role of non-executive Chairman effective immediately. Mr. D'Agostino explained, "During our four years as a public company, we have accomplished a great deal. Our revenue base has grown from approximately $350 million to approximately $650 million, and we have developed a robust Solutions Division to participate in the high-growth outsourcing market."
Mr. D'Agostino continued, "This past year has been particularly challenging. Today's announcement of our strategic direction provides an opportune time for me to announce my decision to step aside from managing day-to-day operations, while continuing to focus on the long-term initiatives of the Company. I am proud of our accomplishments and have every confidence in the team we have assembled. Jerry Mahoney brings valuable industry experience, and I look forward to working with him as I continue to be involved as Chairman of the Board, as well as a significant and interested investor."
Jerry Mahoney, with his twenty years of printing and outsourcing industry experience, will assume the position of interim Chief Executive Officer and will be responsible for day-to-day operations until a permanent replacement is hired. Mr. Mahoney commented, "At the Board's request, I am accepting the CEO role, because I am convinced that this is a solid Company with exciting upside potential. I look forward to working with the current management team as we focus on increasing profits."
The Company's Board of Directors has appointed a Search Committee and has retained Heidrick & Struggles International, Inc. to assist in the search for a permanent CEO.
In addition, Steve R. Gibson, Executive Vice President of Workflow and President of the Printing Division, has elected to pursue other opportunities and has resigned as an Officer and Board member effective immediately.
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