L.B. Foster Company Amends Credit Agreement
July 01 2016 - 10:59AM
PITTSBURGH, July 01, 2016 (GLOBE
NEWSWIRE) -- L.B. Foster Company (NASDAQ:FSTR) announced today that
it has amended its revolving credit facility agreement maturing in
March 2020 that decreases the size of the facility and increases
the maximum leverage ratio until the first quarter of 2018 when it
returns to its original terms and conditions. Key elements to
the amendment include:
- The maximum leverage ratio is increased to 4.75
to 1.00 for the second and third quarters of 2016 and then steps
down 25 basis points per quarter until it reverts to 3.25 to 1.00
in the first quarter of 2018 and all fiscal quarters
thereafter.
- The size of the facility was reduced to $275
million from $335 million in order to better align the facility
with our anticipated needs as well as to reduce borrowing
costs.
- The Company's obligations under the amendment
will be secured by the grant of a security interest by the domestic
borrowers and domestic guarantors in substantially all of the
personal property owned by such entities. Additionally, the
equity interests in each of the domestic loan parties, other than
the Company, and the equity interests held by each domestic loan
party in their domestic subsidiaries, shall be pledged to the
lenders as collateral for the lending obligations.
- The maximum amount of dividends, distributions
and redemptions is reduced to $4 million annually from $25 million
until March 31, 2018 when the limit will revert to $25
million.
- Acquisitions will be limited to an aggregate
purchase price of $12 million through March 31, 2018.
David J. Russo, Senior Vice President
and Chief Financial Officer, said: "This revised credit agreement
provides substantially improved flexibility for L.B. Foster to
navigate through the current challenging environments in our rail
and energy markets while we work to reduce leverage and position
the Company for growth when conditions improve. We certainly
appreciate the strong support provided by our bank group."
The Company's five bank group is led
by PNC Bank, N.A. as Administrative Agent, with Bank of America
N.A. and Wells Fargo Bank N.A. as Co-Syndication Agents, and
Citizens Bank of Pennsylvania, and Branch Banking and Trust Company
as participants.
Additional information concerning the
revolving credit facility can be found in the Current Report on
Form 8-K filed by the Company.
About L.B.
Foster Company
L.B. Foster is a leading manufacturer, fabricator, and distributor
of products and services for the rail, construction, energy and
utility markets with locations in North America and Europe.
For more information, please visit www.lbfoster.com.
This release may
contain forward-looking statements that involve risks and
uncertainties. Statements that do not relate strictly to historical
or current facts are forward-looking. When we use the words
"believe," "intend," "expect," "may," "should," "anticipate,"
"could," "estimate," "plan," "predict," "project," or their
negatives, or other similar expressions, the statements which
include those words are usually forward-looking statements. Actual
results could differ materially from the results anticipated in any
forward-looking statement. Accordingly, investors should not
place undue reliance on forward-looking statements as a prediction
of actual results. The Company has based these forward-looking
statements on current expectations and assumptions about future
events. While the Company considers these expectations and
assumptions to be reasonable, they are inherently subject to
significant business, economic, competitive, regulatory and other
risks and uncertainties, most of which are difficult to predict and
many of which are beyond the Company's control. The risks and
uncertainties that may affect the operations, performance and
results of the Company's business and forward-looking statements
include, but are not limited to, an economic slowdown or a
continuation of the current economic slowdown in the markets we
serve; the risk of doing business in international markets; our
ability to effectuate our strategy including evaluating potential
opportunities such as strategic acquisitions, joint ventures, and
other initiatives, and our ability to effectively integrate new
businesses and realize anticipated benefits; costs of and impacts
associated with shareholder activism; a decrease in freight or
passenger rail traffic; the timeliness and availability of material
from our major suppliers; labor disputes; the effective
implementation of an enterprise resource planning system; changes
in current accounting estimates and their ultimate outcomes; the
adequacy of internal and external sources of funds to meet
financing needs; the Company's ability to manage its working
capital requirements and indebtedness; domestic and international
taxes; foreign currency fluctuations; inflation; domestic and
foreign government regulations; continued and sustained declines in
energy prices; a lack of state or federal funding for new
infrastructure projects; increased regulation including conflict
minerals; an increase in manufacturing or material costs; the
ultimate number of concrete ties that will have to be replaced
pursuant to the previously disclosed product warranty claim of the
Union Pacific Railroad ("UPRR") and an overall resolution of the
related contract claims as well as the possible costs associated
with the outcome of the lawsuit filed by the UPRR; risks inherent
in litigation and those matters set forth in Item 8, Footnote 19,
"Commitments and Contingent Liabilities" and in Item 1A, "Risk
Factors" of the Company's Form 10-K for the year ended December 31,
2015 as updated by any subsequent Form 10-Qs. The Company urges all
interested parties to read these reports to gain a better
understanding of the many business and other risks that the Company
faces. The forward-looking statements contained in this press
release are made only as of the date hereof, and the Company
assumes no obligation and does not intend to update or revise these
statements, whether as a result of new information, future events
or otherwise, except as required by securities laws.
Contact:
David Russo
Phone: 412.928.3417
Email: Investors@Lbfoster.com
Website: www.lbfoster.com
L.B. Foster
415 Holiday Drive
Pittsburgh, PA 15220
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: L.B. Foster Company via Globenewswire
HUG#2024913
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