Centis Inc. Reaches Agreement With Lenders to Restructure Senior Debt Through Voluntary Chapter 11 Filings; Obtains $6.5 Million in New Financing Commitments.

Business Editors

BREA, Calif.--(BUSINESS WIRE)--July 31, 2002

Retains the Firm of Casas, Benjamin & White, LLC as Restructuring

Advisor and SSG Capital Advisors, LP as Investment Banker 

Centis Inc., a privately held manufacturer and distributor of office products and a variety of storage, display, organization, image preservation and human resource compliance materials, announced today that it has reached agreement with its lenders to restructure its debt through a Chapter 11 reorganization. The voluntary filings occurred today in the U.S. Bankruptcy Court for the Central District of California in Santa Ana. None of the company's subsidiaries in Canada, Ireland, or Mexico were included in the filing.

As part of the agreement and subject to Court approval, the company will obtain up to $6.5 million in debtor-in-possession (DIP) financing from certain members of its current 12-entity bank group, led by Fleet National Bank as agent, to support purchases of goods and services during the reorganization period.

The company has also retained the Chicago-based financial restructuring and advisory firm of Casas, Benjamin & White, LLC, ("CBW") as restructuring advisor, reporting to the company's board of directors. CBW has been named as the company's chief restructuring officer, with Robert E. Annas, a CBW principal, serving as lead officer working in Brea.

"The company's capital structure is burdened by excessive debt, which is constraining growth," stated John Bermingham, Centis president and chief executive officer, who joined the company in January. "We have been in negotiations with our bank group for several months evaluating a variety of ways to achieve the right capital structure for the company and reduce the debt to a serviceable level. The steps taken today offer the clearest course of action for all constituencies."

Mr. Bermingham further declared that "Our company has made considerable progress in recent months reflecting the upturn in demand being experienced by our key customers. Our sales are ahead of plan, and we have already completed shipment of the vast majority of our critical back-to-school products. In fact, our consolidated business this year continues to be profitable at the EBITDA level (earnings before interest, taxes, depreciation and amortization). The marketplace recognizes the strength of our many brands, such as JM, Duo-Tang, 20th BOK, PostFax, and File Rite. These brands have been mainstays in the office supply industry for decades and have strong user loyalty as a result. Similarly, our G. Neil products demonstrate a loyal customer base in the human resource compliance business."

In papers filed with the Court today, the company indicated it would retain New York-based SSG Capital Advisors, L.P. as investment bankers to review its strategic alternatives. The company has received an offer to purchase substantially all of the assets of the G. Neil businesses.

"We've taken the difficult but necessary steps to rationalize product lines, consolidate operations, reduce costs and maximize synergies within the company's core business sectors," Mr. Bermingham said. "As a result, we've demonstrated that the Centis Inc. entities form a compelling product platform upon which to grow and expand the business. Our next step is to realign our capital structure to reflect the realities of the marketplace."

Mr. Bermingham said that Centis intended to complete the company's financial reorganization on an accelerated timetable, targeting the year-end. "During that time, the company will continue to operate in the normal course of business. We maintain strong relationships with our vendors and are confident that our customers will experience reliable, timely service."

With headquarters in Brea, Calif., Centis, together with its debtor affiliates, employ approximately 850 personnel, excluding the non-filing entities. The company maintains manufacturing, distribution, and sales facilities in Paw Paw and Niles, Mich.; Brea, Calif.; Hasbrouck Heights, N.J.; and Sunrise, Fla., as well as Letchworth, England. The original company, which was known as 20th Century Plastics Inc., was founded in Los Angeles in the early 1950s. Annual sales for Centis total approximately $155 million.

Additional information about the company's reorganization may be found online in the news section of www.centis.com or by calling 877.433.6479.