-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mbvj8zcdiQVpnNpdVtuQoJ8zP9N9/8ypCNIew91nEa4/DOfG2IF6ZowL9eNsn7Wj t53QoE88T3yF45VGGKlvUA== 0000950135-98-004417.txt : 19980803 0000950135-98-004417.hdr.sgml : 19980803 ACCESSION NUMBER: 0000950135-98-004417 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980728 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980730 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CML GROUP INC CENTRAL INDEX KEY: 0000729576 STANDARD INDUSTRIAL CLASSIFICATION: [3949] IRS NUMBER: 042451745 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09630 FILM NUMBER: 98673947 BUSINESS ADDRESS: STREET 1: 524 MAIN ST CITY: ACTON STATE: MA ZIP: 01720 BUSINESS PHONE: 9782644155 MAIL ADDRESS: STREET 1: 524 MAIN STREET CITY: ACTON STATE: MA ZIP: 01720 8-K 1 CML GROUP, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): July 28, 1998 ------------- CML Group, Inc. ------------------------------------------------------ (Exact Name of Registrant as Specified in its Charter) Delaware ---------------------------------------------- (State or Other Jurisdiction of Incorporation) 001-09630 04-2451745 - ------------------------ ------------------------------------ (Commission File Number) (I.R.S. Employer Identification No.) 524 Main Street Acton, Massachusetts 01720 - ---------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) (978) 264-4155 ---------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Not Applicable ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 2 ITEM 5. OTHER EVENTS. On July 28, 1998, CML Group, Inc. (the "Company") announced that it had sold to the State of Wisconsin Investment Board a redeemable subordinated note for a purchase price of $20 million and established a senior credit facility of up to $65 million with a maturity date of August 1, 1999 with funds managed by DDJ Capital Management LLC (the "Funds") and BankBoston, N.A. In consideration of the senior credit facility, the Company issued to the Funds and BankBoston equity in the Company representing 19% of the Company's outstanding Common Stock, calculated on a fully diluted basis. The foregoing description of the announcement is qualified in its entirety by reference to the full text of the Company's press release which is filed as Exhibit 99 to this Current Report on Form 8-K and incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. Not applicable. (b) PRO FORMA FINANCIAL INFORMATION. Not applicable. (c) EXHIBITS. The exhibit following the Exhibit Index is incorporated herein by reference. -2- 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 30, 1998 CML GROUP, INC. ----------------------------------------- (Registrant) By: /s/ John A.C. Pound ------------------------------------- John A.C. Pound Chairman of the Board and Chief Executive Officer -3- 4 EXHIBIT INDEX Exhibit Number Description - ------ ----------- 99 Press Release dated July 28, 1998. EX-99 2 PRESS RELEASE DATED JULY 28, 1998 1 EXHIBIT 99 CML News Release - -------------------------------------------------------------------------------- 524 Main Street Acton, Massachusetts 01720 Telephone: (978) 264-4155 Fax: (978) 264-4073 CML Group, Inc. Announces $20 Million Subordinated Note Issuance and New Senior Credit Facility ACTON, Mass. -- July 28, 1998 -- CML Group, Inc. (NYSE: CML), today announced that it has sold to the State of Wisconsin Investment Board ("SWIB") a redeemable subordinated note for a purchase price of $20 million and established a senior credit facility of up to $65 million with a maturity date of August 1, 1999 with funds managed by DDJ Capital Management LLC (the "Funds") and BankBoston, N.A. In consideration of the senior credit facility, CML has issued to the Funds and BankBoston equity in CML representing 19% of the Company's outstanding common stock, calculated on a fully diluted basis. The Company stated that the subordinated note issued to SWIB (i) is due July 27, 2003, (ii) is convertible, at the option of SWIB, into CML common stock at a price of $4.00 per share, (iii) bears interest at the rate of 15% per annum, (iv) is prepayable at any time by CML and (v) must be redeemed in full at the election of SWIB after September 1, 2000. The Company added that its obligations under the note are secured by a junior lien in substantially all the assets of CML and its subsidiaries. The Company also granted SWIB a right of first refusal in connection with future issuances of equity by the Company. In addition to the issuance of equity to the Funds and BankBoston, the terms of the senior credit facility include (i) the payment of annual interest equal to the base rate (as defined in the credit facility) plus 4%, and, in the event of CML's failure to reduce its senior credit facilities to specified levels by April 1, 1999 through cash generated from operations, the sale of assets or the raising of equity, additional interest payable in the form of a payment-in-kind ("PIK") note accruing interest at the rate of 1.5% per month, and all PIK notes shall bear interest at the rate of 1.5% compounded monthly, (ii) a maturity date of August 1, 1999, (iii) a senior security interest in all the assets of CML and its subsidiaries, and (iv) the payment of letters of credit and commitment fees plus certain additional fees and expenses. The Funds and BankBoston were granted anti-dilution protection in order to enable them to maintain their equity position in the Company while the credit facility is outstanding. 2 CML is a leading direct marketer of products for consumers that enhance healthy, active lifestyles. Its products are sold under the trade names NordicTrack, Nordic Advantage and Smith & Hawken. This new release contains forward-looking statements relating to the Company's senior credit facility and redeemable subordinated note, and such statements involve risks and uncertainties. In addition to the risk factors referred to in the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1997, factors which may affect the Company's future operating results include: the market's response to the Company's new and existing products; the impact of competition in the Company's marketplace; the ability of the Company to successfully manage its marketing channels, including its wholesale channel; the Company's continuing efforts to reduce costs; the Company's ability to successfully execute the NordicTrack restructuring plan; the Company's ability to successfully introduce new NordicTrack product lines; the availability of capital resources; and delays in the introduction of new products. CONTACT: CML Group, Inc. Lynn Harrison, 978/264-4155 -2- -----END PRIVACY-ENHANCED MESSAGE-----