ELYRIA, Ohio--(BUSINESS WIRE)--Invacare Corporation (NYSE: IVC) announced today that it has successfully amended its credit agreement effective January 31, 2014. The amended agreement provides the Company with additional flexibility on its maximum leverage ratio financial covenant through September 30, 2014.
''In partnership with our lenders, we are pleased to have completed this amendment to our credit agreement. The Company is actively managing its capital structure and reducing debt levels as we work through the phase of the consent decree with the United States Food and Drug Administration that limits production at our Taylor Street wheelchair manufacturing facility in Elyria, Ohio. Over the first nine months of 2013, we reduced our debt outstanding by $179.2 million to a total debt outstanding of $58.9 million as of September 30, 2013. We are confident that we will successfully exit this challenging period and begin to regain our custom power wheelchair market share. We would like to thank our lenders for their continued support,'' said Gerald B. Blouch, President and Chief Executive Officer.
The new maximum leverage ratio for the first three quarters of 2014 has been increased as compared to the prior credit agreement. In calculating the Company's EBITDA for purposes of determining the ratios, the credit agreement amendment also allows the Company to add back to EBITDA up to $20,000,000 for one-time cash restructuring charges, representing an incremental increase of $5,000,000 from prior credit agreement terms.
In order to align its debt capacity and related costs with anticipated needs, the Company also has reduced its revolving credit facility to $100,000,000 from $250,000,000 through the October 2015 maturity date of the facility.
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 has 5,400 associates 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: compliance costs, limitations on the production and/or distribution of the Company's products, inability to bid on or win certain contracts, or other adverse effects of the FDA consent decree of injunction; unexpected circumstances or developments that might further delay or adversely impact the results of the final, most comprehensive third-party expert certification audit or FDA inspections 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; 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); the Company's inability to satisfy its liquidity needs, 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 covering nine metropolitan statistical areas that started in 2011 and the additional 91 metropolitan statistical areas that started on July 1, 2013); 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 which began on January 1, 2013 on certain medical devices and the Company's ability to successfully offset such impact); legal 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; 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 of the Company's globalization strategy; 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; ineffective cost reduction and restructuring efforts; 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.