Plantation, Florida-based Dreams, Inc recently signed a secured line of credit agreement worth $35 million. The new credit facility replaces the company’s prior $27.5 million credit facility.
The new facility has been financed by PNC Bank, a member of The PNC Financial Services Group, Inc (PNC - Free Report) and bears a time period of three years. PNC Bank has also provided an advance of $5 million to ensure smooth business transactions for the upcoming fourth quarter of 2011.
The company believes that the new credit facility will strengthen its financial position and offer future investment opportunities. Moreover, the new facility increases the company’s available fund and reduces the burden of interest expense.
In the recently concluded third quarter 2011, Dreams reported loss of 2 cents per share, a penny better than the Zacks Consensus Estimate. However, total revenue jumped 23% to $24.4 million, benefiting from solid organic growth from owned sites and growing Web syndication portfolio.
At quarter end, the company had cash of $0.2 million. The long-term debt, less current portion of the company as of September 30, 2011, was $1.4 million compared with $1.7 million at December 31, 2010.
Dreams together with its subsidiaries, engages in the manufacturing, distributing, retailing, and selling sports licensed products, memorabilia, and acrylic display cases through various channels, including Internet, brick and mortar, catalogue, kiosks, and trade shows in North America.
Dreams currently retain a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Build-A-Bear Workshop Inc. (BBW) holds a Zacks #1 Rank, implying a short-term Strong Buy Rating.