Image Entertainment Amends Its Loan and Security Agreement with Wachovia Capital Finance Corporation (Western)
2008-05-15 01:25:59 -
www.image-entertainment.com - Image Entertainment, Inc. Jeff M. Framer, 818-407-9100 ext. 299 jframer@image-entertainment.com Image Entertainment, Inc. (Nasdaq:DISK), a leading independent licensee, producer and distributor of home entertainment programming in North America, today announced that it has amended its May 2007 three-year Loan and Security Agreement with Wachovia Capital Finance Corporation (Western) to increase the company's maximum borrowing availability under its revolving line of credit to $20 million, up from $15 million and reduce minimum financial covenant levels on a going forward basis.
The amendment increases interest on outstanding borrowings to either the Prime rate plus up to 0.75% (up from Prime plus up to 0.25%) or at our option the Eurodollar rate plus up to 2.75% (up from Eurodollar plus up to 2.25%), subject to minimum borrowing levels. The level of interest rate margin to Prime or Eurodollar is dependent upon our future financial performance as measured by EBITDA, earnings before interest, taxes, depreciation and amortization, as defined in the Agreement. Actual borrowing availability is based on eligible trade accounts receivable levels.
In addition to increasing the company's borrowing availability, the amendment reduces the required minimum Fixed Charge Coverage Ratios on a going forward basis. Should the company maintain minimum borrowing availability equal to or greater than $3.5 million at all times, which is down from the prior minimum borrowing availability requirement of $5.0 million, this financial covenant will not be tested.
"We believe this amendment indicates Wachovia's confidence in Image's new leadership and its ability to execute on its fiscal 2009 business plan, which began April 1, 2008. We are moving past a very difficult fiscal 2008 and are excited about our prospects for the new fiscal year," said Jeff M. Framer, Image's Chief Financial Officer.
About Image Entertainment:
Image Entertainment, Inc. is a leading independent licensee, producer and distributor of home entertainment programming in North America, with approximately 3,000 exclusive DVD titles and approximately 250 exclusive CD titles in domestic release and approximately 450 programs internationally via sublicense agreements. For many of its titles, the Company has exclusive audio and broadcast rights and, through its subsidiary Egami Media, Inc., has digital download rights to approximately 2,000 video programs and over 300 audio programs containing more than 4,500 tracks. The Company is headquartered in Chatsworth, California. For more information about Image Entertainment, Inc., please go to www.image-entertainment.com.
Maximum Revolving Credit Limit Increased to $20 Million and
Financial Covenant Minimum Levels Reduced
