On September 14, Hanger, Austin, Texas, filed Form 8-K Current Report with the U.S. Securities and Exchange Commission stating that on September 11, the company entered into a second amendment of its credit agreement dated June 17, 2013, with the lenders from time to time party thereto and Bank of America as agent; the credit agreement was previously amended June 19.
This Second Amendment and Waiver waives the events of default under the credit agreement arising from the company’s failure to deliver to the agent certain financial information and other materials for the periods ended September 30, 2014; December 31, 2014; March 31, 2015; and June 30, 2015, as required by the First Amendment and Waiver and the failure by the company to timely deliver the notice required by the credit agreement with respect to the company’s failure to deliver that financial information. The second amendment also provides that Hanger’s failure to deliver the financial information to the agent on or before October 30, 2015, shall be an additional event of default under the credit agreement.
Form 8-K stated that until such time as Hanger has delivered to the agent annual and quarterly financial information that demonstrates that the company would have been in compliance with the financial covenants in the credit agreement for the fiscal quarters ended September 30, 2014; December 31, 2014; March 31, 2015; and June 30, 2015, and projections for each fiscal quarter remaining during the term of the credit agreement (through June 17, 2018) demonstrating that (assuming the projections are realized) Hanger will be in compliance with the financial covenants in the credit agreement as of the end of each fiscal quarter remaining during the term of the credit agreement, the amount that Hanger can borrow under the credit agreement in the form of revolving loans, swing line loans, and/or letters of credit has been reduced from $200 million to $146.3 million, and certain baskets and exceptions to the restrictive covenants in the credit agreement have been reduced or eliminated, in addition to other changes.
On September 11, Hanger noted that it had $146.3 million drawn on the revolving credit line (including outstanding letters of credit) and about $59.5 million of cash on hand. In the filing, Hanger said it believes it has sufficient liquidity to meet operating needs and planned capital expenditures through the remainder of the year.