Merisant developing opportunities for growth

By Jennifer Lanning Drey

Portland, Ore., June 7 - Merisant Co. has a number of opportunities in development that are expected to lead to additional growth for the company, Paul Block, Merisant's chief executive officer, said during the company's first-quarter earnings conference call held Wednesday.

"We believe we can bring value to our stakeholders with these additional strategic investments," Block said.

The chief executive officer said he could not currently comment on the specifics of any of the initiatives, but told listeners most of the growth opportunities being pursued are likely to be executed in 2008.

During the call, Block said Merisant saw stabilization in its North American retail business during the first quarter but continued softness in France. Sales boosted in Asia Pacific during the quarter.

The company ended the first quarter with cash and cash equivalents of $22.3 million, compared to $23.7 million at Dec. 31, according to its form 10-Q filing made with the Securities and Exchange Commission.

When asked about possible uses of cash, Block again said he could not provide listeners with any specific details, but said the company is considering all options, including a bond buyback.

"While I'm excited that we have additional growth opportunities that I would like to report at this time, these opportunities are difficult to discuss due to the confidential nature," he said.

"I hope you get the sense... that we're going to put the capital to productive use that's going to provide productive growth for the company," Block said later during the call.

Merisant also reported that it has decreased the interest rate on its variable-interest-rate debt to 8.73% per annum from 10.63% per annum by repaying its $85 million second-lien term loan. The company repaid the debt by amending and restating its senior credit agreement, which allowed it to increase the size of the first-lien facility by $85 million and repay the second-lien loan, according to Diana S. Ferguson, Merisant's chief financial officer.

"The amended and revised credit agreement also provides additional flexibility to adjust our capital structure in the future," Ferguson said.

The company was in compliance with all of the bank covenants under the senior credit agreement and second-lien credit agreement at the end of the first quarter, Ferguson said.

Merisant had total liabilities of $515.29 million at March 31, compared to total liabilities of $528.75 million at Dec. 31, according to its 10-Q filing.

Merisant is a Chicago-based marketer of low-calorie tabletop sweeteners, including Equal and Canderel.

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