Cenveo Amending Its Credit Facility

Another highly leveraged company seems poised to test the generosity of its lenders. Commercial printer Cenveo (CVO) snuck the following language in its 10-K filing today, hoping nobody would notice and destroy its stock price ahead of "unprecedented economic uncertainty and volatility":

Capital Structure:

"We are in compliance with all of our debt covenants, as we ended 2008, with a reasonable level of debt-covenant cushion. Our management team is implementing a game plan to allow the Company to remain in compliance with our covenants going forward. However after much deliberation, and given the unprecedented uncertainty in the financial markets coupled with limited sales visibility, we have decided that exploring an amendment to our credit agreement is a prudent course of action. We are currently in discussions with our lead bank about modifying the terms of our credit facility to give the Company flexibility during this period of unprecedented economic uncertainty and volatility."

Probably not good news for other comparable companies, namely junk mail distributor Valassis (VCI), whose loans, as pointed out recently, have seen an unprecedented two week run up for no particular reason.

Comments

[Gshia:]

This wasn't "snuck in...hoping nobody would notice", there is a paragraph in the Earnings Release and they discussed on conf call.

Mar 17 02:45 PM

[thegrandibah:]

This is a super managed company that is gaining market share, generating piles of cash. The author derived myopic conclusions about a filing without providing context or doing any additional homework. Furthermore, Valassis is not a comparable company.

Mar 18 09:31 AM

[Ooops:]

Nice pic brah! How do you manage time to do work on stocks with all your boarding dude!!

Mar 18 01:36 PM

[selin_55430:]

Really? What market share? You are assuming there will be enough left to buoy this company even if they are able to modify the terms. This is no longer the booming 90's. Not sure about this and maybe someone can confirm, but haven't they already worked with lenders previously to modify credit terms? They may be entering a "come to Jesus" period. Oh, and where did they come up with their Goodwill amount?


On Mar 18 09:31 AM thegrandibah wrote:

> This is a super managed company that is gaining market share, generating
> piles of cash. The author derived myopic conclusions about a filing
> without providing context or doing any additional homework. Furthermore,
> Valassis is not a comparable company.

May 11 02:21 PM