Exhibit 99.2
------------
Contact: Sitrick And Company
Anita-Marie Hill
Brenda Adrian
310-788-2850
Master Graphics Receives Court Approval of First-Day Orders in Connection with
Restructuring Under Chapter 11
Agreement Finalized for Liquidity from Prepetition Lenders for Operations in the
Ordinary Course of Business
Received Authorization to Fund Employee Obligations, Including Prepetition
Wages, Salaries and Employee Benefits
Memphis, TN -- July 10, 2000 -- Master Graphics, Inc. (OTCBB: MAGR)
announced today it has received Bankruptcy Court approval to, among other
things, pay prepetition and postpetition employee wages, salaries, commissions,
workers' compensation, health benefits, and other employee obligations during
its voluntary restructuring under Chapter 11, which commenced on July 7, 2000.
The court also authorized the Company to pay prepetition claims for consignment
vendors and approved procedures concerning consigned goods. The Company is also
authorized to continue certain prepetition customer rebate practices.
In addition, the Court approved an agreement with the Company's
prepetition lenders, that provides liquidity to fund operations and continue
servicing customers in the ordinary course of business. Discussions regarding
debtor-in-possession financing will continue in the interim.
The Court is scheduled to hear a motion the Company filed today seeking
approval of the implementation of a key employee retention, incentive and
severance program approved by the board of directors. A hearing has been
scheduled for August 3, 2000 to hear pending motions.
Chief Executive Officer Michael Bemis said he was extremely pleased by both
the first-day orders entered by the Court, as well as the support received at
the first-day hearing by the Company's noteholders and prepetition lenders. He
noted that the restructuring should have no impact on the day-to-day operations
of the Company's divisions or on its ability to serve its customers. " There
will be no interruption in operations at the Company's divisions, and we will
continue to purchase and pay for goods and services from our suppliers." He
also stated that Master Graphics has already contacted a number of its major
vendors, who have indicated their support.
"With our first-day motions approved, we can now renew our focus on the
core operations of our business and concentrate on our key constituencies -- our
customers, our vendors and our employees. We will continue our restructuring
initiatives aimed at increasing operating efficiencies, completion of our
integration and improving profitability. Concentrating on these areas will
enable Master Graphics to maximize the value of the business for all of the
Company's stakeholders," Mr. Bemis said.
In other actions, the Company filed papers to approve F. Duffield " Duff "
Meyercord, chief restructuring officer. Mr. Meyercord is managing director of
Carl Marks Consulting Group LLC, a New York based firm that
-2-
specializes in crisis management, turnarounds and restructurings. Mr. Meyercord
has extensive experience providing advisory services to numerous public and
private companies in order to increase profitability and create stakeholder
value and includes many successes related to corporate restructurings. The
Company also filed papers for the appointment of J. Richard Walker as interim
chief financial officer, who is a senior advisor of Carl Marks Consulting Group
LLC.
Mr. Meyercord and his firm Carl Marks Consulting Group LLC have been
retained as consultants to assist the Company in evaluating its strategic
alternatives since June 5, 2000.
According to Michael Bemis, "Duff is the best person to help the Company
achieve its goals for creating a capital structure that will support the
operations of the business."
Master Graphics announced earlier today that it expects to reach an
agreement with the majority holders of the Company's 11 1/2% Senior Notes due
2005 in the principal amount of $130 million to convert substantially all of the
bond debt into substantially all of the future equity of the Company.
Master Graphics, Inc. and its wholly-owned subsidiary, Premier Graphics,
Inc. filed its Chapter 11 cases July 7, 2000 in the U.S. Bankruptcy Court for
the District of Delaware in Wilmington.
Master Graphics provides high-quality, general commercial printing products
to numerous customers throughout the United States. The Cordova, Tennessee-based
company employs approximately 1,900 employees and operates 23 facilities in 14
states.
This press release contains statements which constitute forward-looking
statements within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act
of 1995. While the Company believes that its expectations are based on
reasonable assumptions within the bounds of its knowledge of its business and
operations, prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance, and involve risks and
uncertainties, and that actual results may differ materially from those
contemplated by such forward-looking statements. The
-3-
Company's ability to restructure its balance sheet and successfully conclude
negotiations with its current lending group, proposed lending group, and the
holders of its Senior Notes is subject to a number of factors that are beyond
the Company's control, including the willingness of such parties to accept terms
that are agreeable to the Company. There can be no assurance that the Company
will be successful in its attempts to develop or implement restructuring
alternatives or to reorganize under Chapter 11 of the Bankruptcy Code. Important
factors currently known to management that could cause actual results to differ
materially from those contemplated by the forward-looking statements in this
press release include, but are not limited to, further adverse developments with
respect to the Company's liquidity position or operations of the Company's
various business divisions, adverse developments in the Company's efforts to
renegotiate its funding and adverse developments in the bank financing or public
or private markets for debt or equity securities, or adverse developments in the
development, implementation, timing or results of the Company's strategic
business plan, the ability of the Company to realize the anticipated general and
administrative expense savings and overhead reductions presently contemplated,
the ability of the Company to return the Company=s operations to profitability,
the level and nature of any restructuring and other one-time charges, and the
difficulty in estimating the feasibility of and/or costs relating to
consolidating operations. For further information on factors which could impact
the company and the statements contained herein, reference is made to the
filings of Master Graphics, Inc., with the Securities and Exchange Commission.
# # #
-4-