The Company renewed its revolving honour proficiency with Wachovia Capital Finance Corporation (Central), entering into a Second Amended and Restated Loan and Security Agreement operational November 18, 2008. "We are very tickled pink to have completed this renewal at favorable terms and with the running put up with of our frequency relation bank, especially under the clime of uncertainty in the dependability markets today," said Marcel Martin, the Company's Chief Financial Officer. Among other items, the amended settlement extends the maturation make obsolete of the revolving acknowledgement swiftness to September 30, 2011, increases the limit over LIBOR included in the incline calculate from 1.5% per annum to 2.5% per annum, permits the Company to consideration dividends and repurchase regular goods if certain pecuniary metrics are met, and eliminates the EBITDA covenant.
The superlative revolving accommodation amount under the amended compact continues to be $120.0 million. Liquidity At September 30, 2008, the Company had money and coin of the realm equivalents of approximately $7.1 million compared to spondulix and specie equivalents of approximately $5.7 million at September 30, 2007, and has access to additional gelt of approximately $108.2 million under its U.S. revolving confidence deftness dominate to borrowing base and unchanging reserves.
Net cash provided by operating activities was $41.3 million in economic 2008, as compared to legal tender provided by operating activities of $4.6 million in monetary 2007. At September 30, 2008, inventory balances (net of exotic currency adjustments) were approximately $21.6 million higher than at September 30, 2007, as a development of the continued multiply in costs of stinging materials, a higher standing of inventory required to be maintained to brook the increased aim of sales and a demolish of cover horses in order to continue work and shipments through the planned outages coupled to the Company's capital upgrade program.
In addition, the benefit and postretirement benefits ponder decreased by $12.5 million due to the payments to the plans and drawing amendments. Net lolly occupied in investing activities was $21.6 million in pecuniary 2008, as a result of the continuing funds expenditure program and the Asian deployment expansion and acquisition.
As a consequence of the above, borrowings on the revolving impute facility decreased by $23.7 million. Also included in mazuma from financing activities is $3.2 million for the glut encumber benefit from the execute of 177,386 stock options in financial 2008.
The Company's sources of moolah for fiscal 2009 are expected to consist pre-eminently of cash generated from operations, spondulicks on hand, and borrowings under the U.S. revolving ascription facility. The U.S. revolving honesty efficiency provides borrowings in a uttermost amount of $120.0 million, basis to a borrowing base formula and incontestable reserves.
The Company's elemental uses of cash over the next twelve months are expected to consist of expenditures kindred to return tax payments; ripping spending to improve reliability and demeanour of the equipment; reduction of debt; allotment plan funding; and interest payments on unresolved indebtedness. In the elementary quarter of fiscal 2009, federal taxes of $15.0 million were paid consanguineous to the twenty year concord to equip conversion services to Titanium Metals Corporation.
Outlook Although net and volumes from quarter-to-quarter through both budgetary 2007 and 2008 tended to show growth, in the latter half of fiscal 2008 the backlog began to exemplify signs of the weakening profitable circumstances to varying degrees in defined buy and sell categories. Revenue dollars and volumes in the backlog were essentially non-effervescent between September 30, 2007 and September 30, 2008, while the general selling bonus declined approximately 5%, in character as a effect of a 40% shrink in the cost of nickel between periods. However, the backlog at the end of fiscal 2008 declined from the end of the third post of fiscal 2008 by approximately 9% in both takings dollars and pounds, while the ordinary selling toll remained essentially flat. Revenue dollars and mass in the backlog at October 31, 2008 declined by an additional 4% from September 30, 2008, while run-of-the-mill selling value again remained essentially flat.
The rage in backlog manoeuvre would appear to be conforming with real performance; however, brass does not maintain that the backlog will increase in the second and third quarters of fiscal 2009 to the same dimensions as in days of yore comparable periods. Although arbitrary as to the extent of any additional reduction in yield dollars and pounds will appear in the backlog, management anticipates that backlog take dollars and pounds will veto further and ultimately be reflected in a commensurate reduction in return and sales pounds. Planned fiscal 2009 first-rate spending is targeted at approximately $15.1 million, most of which is sustenance spending.
Depending upon productive conditions, the Company may impel further equipment upgrades in fiscal 2009; however, pre-eminent projects in fiscal 2009 will be focused on improving and maintaining the materiel reliability. At this time, governance does not predict any prolonged planned clobber outages as a outcome of equipment upgrades in fiscal 2009. Worldwide cost-effective conditions have recently deteriorated significantly and may wait depressed, or could worsen, in the foreseeable future.
These conditions may have a documents adverse aftermath on consumer for our customers' products and, in turn, on market for our products. If these conditions carry on or worsen, our results of operations and fiscal condition could be in the long run adversely affected. Commenting on the position for fiscal 2009 and forward, Mr. Comerford said, "In the short-term, we wait for a significant slow-down and, while we hold the Company can care for acceptable levels of profitability, our results are undoubtedly to be below those seen in up to date years.
Certainly, we expect accelerating powerlessness in order entry and pounds shipped over the next several quarters. Even with eager demand, the skill of our customers to buy credit is likely to be negatively impacted in this environment, which could also negatively collide with sales.
With all due respect to article: read there
No comments:
Post a Comment