DALLAS, Texas, May 18, 2001 (PRIMEZONE) -- Fresh America Corp. (Nasdaq:FRESE), a major North American fresh produce distribution company, announced today that it has made significant progress in its strategic initiative to reduce overhead and debt by divesting under-performing assets. The Company also announced the resolution of a dispute in Florida, the receipt of extensions from its lenders and continuing discussions with alternative sources of funding.
Fresh America reported that since year-end it has been continuing the process of restructuring its operations to reduce overhead and divest non-performing assets. On April 20, 2001, the Company sold one of its subsidiaries -- Fresh America Arizona, Inc. -- to a third party for $2.5 million in cash proceeds. As previously announced, the Company sold its OTF subsidiary in March. The proceeds of these sales, net expenses, have been applied to amounts due under the Company's senior credit facility.
The Company announced that it has reduced the amount owed under its senior credit facility from $21.2 million as of February 25, 2000, to approximately $6.2 million as of April 30, 2001. Annualized overhead expenses have been reduced by approximately 25% since year-end.
The Company also announced that it has resolved a dispute involving its subsidiary located in Pensacola, Fla. Through an arbitration, the original asset purchase by Fresh America was rescinded, effective May 12, 2001. As a result of this decision Fresh America has been relieved of its lease arrangements at no cost to the Company. This location was a non-performing asset for the Company, as the subsidiary had lost approximately $850,000 in the first quarter of 2001 and $3.3 million during fiscal 2000.
"The Company has continued to move aggressively to become more efficient," said Colon Washburn, the Company's Chief Executive Officer. "With the sale of OTF and other non-performing assets, coupled with the resolution of the Pensacola dispute, our management team feels that the Company is better able to focus on its core business strategy of leveraging areas of proven excellence in wholesale distribution, value-added products and services, and collaborating with suppliers and customers. Our on-going discussions with several large retail and food service distributors concerning value-added programs and services continue to validate our business model and represent significant future opportunities."
The Company stated that it has received an extension of its senior credit facility through May 30, 2001 and an extension of the May 1 interest payment on its subordinated debt facility to June 1, 2001. These extensions were granted to allow the Company to continue its negotiations with its lenders with respect to restructuring and further extending their debt facilities. These extensions also allow the Company to continue its discussions with alternative sources of funding. There can be no assurance that the Company will be able to further extend its senior credit or subordinated debt facilities or receive further extensions and waivers from its lenders and other third parties, or that alternative sources of funding can be found.
About Fresh America
Fresh America is an integrated food distribution management company that operates facilities located in Dallas and Houston, Texas; Scranton and Wilkes-Barre, Pennsylvania; Richmond, Indiana; Atlanta, Georgia; Chicago, Illinois; and Los Angeles, California.
Forward-looking Statements
This announcement may contain forward-looking statements that are subject to significant risks and uncertainties. Although Fresh America believes that the expectations reflected in its forward-looking statements are reasonable, Fresh America can give no assurance that such expectations or any of their forward-looking statements will prove to be correct, and future results may differ from those discussed in this press release. Important information regarding the factors that may affect Fresh America's future performance is included in the public reports that Fresh America files with the Securities and Exchange Commission. Fresh America disclaims any intention or obligation to revise any forward-looking statements whether as a result of new information, future event, change in expectations, conditions or circumstances, or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this release does not constitute an admission by Fresh America or any other person that the events or circumstances described in such statement are material.