Global Fastener News

Pentacon Makes Interest Payment; 3rd Quarter Earnings Up

Pentacon Inc. reported third quarter 2001 earnings rose, despite revenue dropping 4.9% from the same period of 2000.
Net income rose from $500.000 in the third quarter last year to $800,000.
Pentacon also announced it made the interest payment due on October 1, 2001, on its 12.25% notes due April 1, 2009, and reached an agreement with lenders on additional borrowing availability.
The interest payment averts default.
Pentacon will continue discussions with note holders on financing.
CEO Rob Ruck said he is “pleased that our senior lenders are continuing to show support for the operational restructuring that we are implementing, and I believe this agreement should give our suppliers, customers and employees comfort that Pentacon is moving in the right direction.
Ruck said third quarter results show the company�s strategy “is on track. Our operating improvements clearly indicate that these plans are having a positive impact in a difficult market.”
Ruck added that Pentacon reduced its debt $10.6 million during the third quarter and booked over $3.4 million in annualized revenues in new contracts.
On September 28, 2001, Pentacon�s senior lenders advised the company that the banks were establishing a reserve of $4.9 million against the amount it may borrow, “effectively reducing the company�s availability under that facility to meet its working capital and debt servicing requirements.”
On October 1 Pentacon announced it had decided not to make the interest payment on its 12.25% notes on $100 million principal.
In the event of default the $59.8 million in bank loans are secured by inventory, receivables and other assets.
Pentacon now has $3.5 million of additional borrowing capacity after making the $6.1 million interest payment. The agreement with senior lenders accelerates the termination date to March 31, 2002, establishes minimum availability requirements, increases the interest rate on the base rate loans by 1%
Pentacon currently does not meet the New York Stock Exchange listing requirements. Web: Pentacon.com �2001 FastenerNews.com