GVI raises $15m from Wells Fargo
CARROLLTON, TexasÃ¢â‚¬â€GVI Security, the North and South American distributor of the Samsung security portfolio, announced this week a $15 million financing round with Wells Fargo Bank. This is $5 million more than its previous credit facility with Laurus Master Fund, which has now been fully repaid and terminated.
Most importantly, said GVI chief financial officer Joe Restivo, the credit comes considerably cheaper. Ã¢â‚¬Å“ItÃ¢â‚¬â„¢s because the business is healthier,Ã¢â‚¬Â Restivo said. Ã¢â‚¬Å“When the prime management team secured that other line of credit, the company was not in a good position,Ã¢â‚¬Â and so had to settle for a rate of prime plus 2 percent, as opposed to the new prime plus .75 percent, which will lower to prime plus .25 percent should GVI achieve net income of $1 million in the year ending Dec. 31, 2008.
Ã¢â‚¬Å“The business has turned,Ã¢â‚¬Â Restivo said, Ã¢â‚¬Å“so we went out for bids to a variety of national banks, and Wells Fargo was the most aggressive.Ã¢â‚¬Â The turnaround under Restivo and chief executive officer Steve Walin, who came on board in March 2006, has indeed been dramatic. After posting a $7.9 million net loss in 2006, GVI turned a modest profit of roughly $100,000 in Q1 2007 and may yet reach $1 million in net profit in 2007.
Restivo attributes this to a simplification of the business. Ã¢â‚¬Å“We exited the DIY business when we joined the company,Ã¢â‚¬Â he said. Ã¢â‚¬Å“We terminated products that were not producing. We put some focus on the cost of sourcing products.Ã¢â‚¬Â That, coupled with reducing the overhead associated with being a public company, allowed GVI to move from 15 percent margins to 27 percent margins in a little over a year. Ã¢â‚¬Å“ThatÃ¢â‚¬â„¢s where most of the gains came from,Ã¢â‚¬Â Restivo said.
Now GVI is ready to take on the industryÃ¢â‚¬â„¢s major players, said Restivo: Ã¢â‚¬Å“Samsung has a very large development team in Korea, and itÃ¢â‚¬â„¢s growing each month, and they have set the security market as a strategic initiative ... WeÃ¢â‚¬â„¢re very bullish on bringing them in to compete head to head with the other major brandsÃ¢â‚¬â€including Pelco. ItÃ¢â‚¬â„¢s not going to happen overnight, but we have our sights set.Ã¢â‚¬Â