L.B. Foster Company Amends Credit Agreement
July 01 2016 - 10:54AM
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 CompanyL.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
L B Foster (NASDAQ:FSTR)
Historical Stock Chart
From Jul 2024 to Aug 2024
L B Foster (NASDAQ:FSTR)
Historical Stock Chart
From Aug 2023 to Aug 2024