Invacare Corporation Announces Amendment to Credit Agreement
September 30 2014 - 7:30AM
Business Wire
Invacare Corporation (NYSE: IVC) announced today that it has
amended its credit agreement effective September 30, 2014. The
amended agreement provides the Company with additional flexibility
in calculating its financial covenants through the duration of the
credit agreement.
''We believe it is prudent to amend the terms of our existing
credit agreement at this time to ensure we have flexibility on our
covenant structure in light of a potential new warranty accrual
that is under review. We appreciate the ongoing support of our
current lenders. Over the past years, we have proactively managed
our business to generate cash, including the divestitures of
non-core businesses, and have paid down total debt outstanding by
approximately $212.7 million since 2010 to $58.5 million as of June
30, 2014. We also are continuing to work on establishing a new
credit facility with our banks, as our existing credit facility
matures in October 2015,'' said Rob Gudbranson, Interim President
and Chief Executive Officer.
In calculating the Company’s financial covenants, the credit
agreement amendment provides an add back to the Company’s EBITDA
for warranty accruals up to $10,000,000 and subtracts cash payments
when actually paid in future periods.
The Company will file a Form 8-K with the United States
Securities and Exchange Commission relating to the amendment, which
will include a copy of the amendment and further information
regarding its terms.
Invacare Corporation (NYSE:IVC), headquartered in Elyria, Ohio,
is the global leader in the manufacture and distribution of
innovative home and long-term care medical products that promote
recovery and active lifestyles. The Company had approximately
5,400 associates as of June 30, 2014, and markets its products in
approximately 80 countries around the world. For more information
about the Company and its products, visit Invacare's website at
www.invacare.com.
This press release contains forward-looking statements within
the meaning of the “Safe Harbor” provisions of the Private
Securities Litigation Reform Act of 1995. Terms such as “will,”
“should,” “could,” “plan,” “intend,” “expect,” “continue,”
“believe” and “anticipate,” as well as similar comments, denote
forward-looking statements that are subject to inherent
uncertainties that are difficult to predict. Actual results and
events may differ significantly from those expressed or anticipated
as a result of risks and uncertainties, which include, but are not
limited to, the following: legal actions, governmental enforcement
actions, regulatory proceedings or the Company's failure to comply
with regulatory requirements or receive regulatory clearance or
approval for the Company's products or operations in the United
States or abroad; product liability or warranty claims; product
recalls, including more extensive recall experience than expected;
compliance costs, limitations on the production and/or distribution
of the Company's products, inability to bid on or win certain
contracts, unabsorbed capacity utilization, including fixed costs
and overhead, or other adverse effects of the FDA consent decree of
injunction; any circumstances or developments that might further
delay or adversely impact the results of the final, most
comprehensive third-party expert certification audit or FDA
inspection of the Company's quality systems at the Elyria, Ohio,
facilities impacted by the FDA consent decree, including any
possible requirement to perform additional remediation activities
or further resultant delays in receipt of the written notification
to resume operations (which could have a material adverse effect on
the Company's business, financial condition, liquidity or results
of operations); the failure or refusal of customers or healthcare
professionals to sign verification of medical necessity (VMN)
documentation or other certification forms required by the
exceptions to the FDA consent decree; possible adverse effects of
being leveraged, including interest rate or event of default risks,
including those relating to the Company's financial covenants under
its credit facility (particularly as might result from the impacts
associated with the FDA consent decree even in light of the new
credit agreement amendment); the Company's inability to satisfy its
liquidity needs, including efforts to negotiate a new bank
agreement, or additional costs to do so; adverse changes in
government and other third-party payor reimbursement levels and
practices both in the U.S. and in other countries (such as, for
example, more extensive pre-payment reviews and post-payment audits
by payors, or the Medicare National Competitive Bidding program);
impacts of the U.S. Affordable Care Act that was enacted in 2010
(such as, for example, the impact on the Company of the excise tax
on certain medical devices, which began on January 1, 2013, and the
Company's ability to successfully offset such impact); ineffective
cost reduction and restructuring efforts or inability to realize
anticipated cost savings from such efforts; delays, disruptions or
excessive costs incurred in facility closures or consolidations;
exchange rate or tax rate fluctuations; inability to design,
manufacture, distribute and achieve market acceptance of new
products with greater functionality or lower costs or new product
platforms that deliver the anticipated benefits; consolidation of
health care providers; lower cost imports; uncollectible accounts
receivable; difficulties in implementing/upgrading Enterprise
Resource Planning systems; risks inherent in managing and operating
businesses in many different foreign jurisdictions; decreased
availability or increased costs of materials which could increase
the Company's costs of producing or acquiring the Company's
products, including possible increases in commodity costs or
freight costs; heightened vulnerability to a hostile takeover
attempt arising from depressed market prices for Company shares;
provisions of Ohio law or in the Company's debt agreements,
shareholder rights plan or charter documents that may prevent or
delay a change in control, as well as the risks described from time
to time in the Company's reports as filed with the Securities and
Exchange Commission. Except to the extent required by law, the
Company does not undertake and specifically declines any obligation
to review or update any forward-looking statements or to publicly
announce the results of any revisions to any of such statements to
reflect future events or developments or otherwise.
Invacare CorporationLara Mahoney, 440-329-6393
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