ARC Group Worldwide Successfully Completes Financial Restructuring

Rhea-AI Summary

ARC Group Worldwide, Inc. has successfully completed its financial restructuring, significantly reducing its debt by approximately $34 million. The restructuring involved a sale-leaseback of ARC Colorado property and the sale of the Stamping Division, generating funds to eliminate $22.2 million in debt from Citizens Bank NA. In September 2020, a new Senior ABL Credit Facility was established with Fifth Third Bank, allowing further debt reduction and conversion of subordinated debt to preferred equity. This restructuring positions ARC for enhanced financial flexibility and potential free cash flow generation.

Positive

• Debt reduced by approximately $34 million.
• Eliminated $22.2 million debt with Citizens Bank NA.
• Established new Senior ABL Credit Facility with Fifth Third Bank.

Negative

• None.

DELAND, FL / ACCESSWIRE / October 16, 2020 / ARC Group Worldwide, Inc. ("ARC" or the "Company") today announced it has successfully completed its financial restructuring and emerged better positioned for the long-term with significantly reduced debt, a stronger balance sheet and enhanced financial flexibility.

Over the last year, the Company has taken steps to reduce its debt by approximately $34 million.

In December 2019, the Company simultaneously consummated (i) the sale-leaseback of the ARC Colorado real estate property (the "Sale-Leaseback") and (ii) the sale of the ARC Stamping division (the "Stamping Division"). The proceeds from the Sale-Leaseback and Stamping Division transactions, together with an additional cash infusion from Quadrant Management Inc. ("QMI"), were utilized to pay off all of the Company's indebtedness to Citizens Bank NA in the net amount of $22.2 million and terminated the Company's Senior ABL Credit Facility.

In July 2020, the Company used a combination of cash on hand and additional cash infusion by QMI to pay down $7 million of Subordinated Debt with The Firmament Group ("Firmament").

In September 2020, the Company entered into a new Senior ABL Credit Facility with Fifth Third Bank. The cash at closing was used to pay down an additional $7 million of Subordinated Debt balance with Firmament. The Company simultaneously entered into Securities Exchange and Purchase Agreements with Firmament and QMI to convert their remaining respective Subordinated Debt balances to Preferred Equity. The Company issued 3,362,611 shares of Series A-1 Preferred Shares in exchange for $3,362,611 in remaining unpaid principal with Firmament. The Company issued 14,562,444 shares of Series A-2 Preferred Shares in exchange for $14,562,444 in remaining unpaid principal and interest with QMI.

The Company's pro forma capital structure is shown below:

	Pre Transaction Capital Structure	% of Total		Effect of Debt/Equity Transactions,LTM		Proforma Capital Structure	% of Total
Senior Debt	$ 21,630,684	40.3%		(14,388,264)		$ 7,242,420	17.3%
Other Bank Debt	1,310,871	2.4%		3,295,519		4,606,390	11.0%
Subordinated Debt	23,373,866	43.5%		(22,873,866)		500,000	1.2%
Total Debt	46,315,421	86.2%		(33,966,611)		12,348,810	33.2%
Equity	7,414,607	17.8%		17,925,055		25,339,662	60.6%
Total Capitalization	$ 53,730,028	100.0%		(16,041,556)		$ 37,688,472	100.0%
Total Debt to LTM EBITDA	5.58x					1.49x

ARC Group Worldwide CEO Jedidiah Rust comments on the Company's improved financial position, "This is an exciting day for ARC Group Worldwide, Inc. and marks the beginning of a new chapter as an even stronger, more competitive company. Having successfully completed the restructuring process, we have a stronger balance sheet and a sustainable business model that is positioned for success. We are now positioned to generate significant free cash flow on a go-forward basis, which we believe will provide the financial flexibility to continue building our business and create value for our shareholders. I am particularly thankful for the tireless efforts of Alan Quasha our Chairman and Cheryl Reynolds our CFO who led this monumental undertaking over the past year."

About ARC Group Worldwide, Inc.

ARC Group Worldwide, Inc. (OTCM: ARCW) is a leading global advanced manufacturing service provider. Founded in 1987, the Company offers its customers a compelling portfolio of advanced manufacturing technologies and cutting-edge capabilities to improve the efficiency of traditional manufacturing processes and accelerate their time to market. In addition to being a world leader in metal injection molding, ARC has significant expertise in prototyping, advanced tooling, automation, machining, plastic injection molding, lean manufacturing, and robotics. ARC's mission is to bring innovation and technology to manufacturing. Learn more at arcw.com.

Forward Looking Statements

This release includes certain forward-looking statements and projections of ARC Group Worldwide, Inc. Such statements are subject to risks and uncertainties that could cause results to differ materially from the Company's expectations. While the Company makes these statements in good faith, neither the Company nor its management can guarantee that anticipated future results will be achieved. The Company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the Company, whether as a result of new information, future events, or otherwise. All forward-looking statements attributable to the Company or persons acting on the Company's behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:

Investor Relations
Phone: (303)467-5236
Email: InvestorRelations@arcw.com

SOURCE: ARC Group Worldwide, Inc.

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https://www.accesswire.com/610850/ARC-Group-Worldwide-Successfully-Completes-Financial-Restructuring

FAQ

What financial restructuring has ARC Group Worldwide completed?

ARC Group Worldwide completed a financial restructuring that reduced its debt by approximately $34 million and improved its balance sheet.

How much debt did ARC Group Worldwide eliminate after restructuring?

After restructuring, ARC eliminated $22.2 million of its debt to Citizens Bank NA.

What is the impact of ARC's new Senior ABL Credit Facility?

The new Senior ABL Credit Facility allows ARC to further manage its debt and has positioned the company for enhanced financial flexibility.

What are the future prospects for ARC Group Worldwide post-restructuring?

Post-restructuring, ARC is positioned to generate significant free cash flow, enhancing its potential for growth and shareholder value.