FOR IMMEDIATE RELEASE
Contact:
-------
Thomas W. Hawkins
Sr. Vice President and
Chief Administrative Officer
954-627-1000
[email protected]
Gerald Stevens, Inc. Amends Credit Agreement;
Announces Reverse Stock Split
FORT LAUDERDALE, FL - November 7, 2000. Gerald Stevens, Inc. (Nasdaq:
GIFT), the nation's largest specialty retailer and marketer of floral products,
has amended its credit agreement with Bank of America, N.A. to provide the
company with additional liquidity and restructure its existing credit facility.
Credit Agreement Amendment
The amendment provides the company with a new $7 million working
capital line of credit through February 28, 2001 to fund seasonal cash
requirements. The amendment also eliminates scheduled commitment reductions to
the company's existing $36 million revolving credit commitment until June 30,
2002 and relaxes certain financial covenants.
"We are very pleased that Bank of America has agreed to provide the
company with the liquidity needed to fund our requirements as we continue to
implement a turnaround of Gerald Stevens. We believe this amendment validates
our revised strategy of rationalizing our operations around our core businesses
and selectively taking advantage of non-core asset sales as we position the
Company for future growth" said John G. Hall, the company's president and chief
executive officer. "With approximately $7 million of non-core asset sales
completed to date and the new seasonal working capital line, the company now has
adequate liquidity as we head into the floral industry's strong seasonal period,
which runs from Thanksgiving through Mother's Day. Management can now focus all
of its efforts on operations and our employees can focus on providing customers
with the highest quality products and service that Gerald Stevens was founded to
provide."
In connection with the amendment, Gerald Stevens issued warrants for
10% of its common stock on a diluted basis at $ .01 per share. If the Company
repays all borrowings under the credit agreement prior to June 30, 2001, 75% of
the warrants will terminate, and if repaid prior to December 31, 2001, 50% of
the warrants will terminate. Certain members of management will participate in
$1 million of the working capital line and will receive a proportionate share of
the warrants.
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Reverse Stock Split
The company also announced that its board of directors voted to effect
a 1-for-5 reverse stock split. The Board of Directors believes that the reverse
stock split may improve the marketability and liquidity of the Company's common
stock by appealing to a broader range of investors. The reverse stock split will
have a record date of November 14, 2000 and an effective date of November 28,
2000. Fractional interests in a share of common stock will be treated as a whole
for purposes of this stock split. With completion of the stock split, the number
of shares outstanding will be approximately 9,840,000.
Gerald Stevens, Inc. (Nasdaq: GIFT) (www.geraldstevens.com) is the largest
specialty retailer and marketer of floral products in the country. The Company
currently operates the largest network of floral specialty retail stores in the
United States with over 300 locations across the country and in Toronto, Canada.
It also operates Florafax, a national wire service with over 5,000 member
florists covering all 50 states, three regional call centers and Internet
businesses that take orders 24 hours a day, 7 days a week. Additionally, Gerald
Stevens owns National Flora, a leading national floral marketing company with
premium-placed advertisements in over 1,000 Yellow Page directories; the Flower
Club, a leading corporate affinity marketer with over 50 corporate partners; and
upscale floral direct marketer, Calyx & Corolla, Inc. Gerald Stevens also owns
its own import and sourcing operation in Miami, Florida.
This announcement contains "forward-looking" information. Future results may
differ from those discussed in this announcement. Some of the factors that could
cause such differences can be found under the headings "Forward-Looking
Statements" and "Risk Factors" in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission on November 24, 1999, and in our Form 10-Q
filed with the Securities and Exchange Commission on July 17, 2000.
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