ImmuCell Announces Refinancing of its Bank Debt
March 11 2020 - 4:05PM
ImmuCell Corporation (Nasdaq: ICCC)
(“ImmuCell” or the “Company”), a growing animal health company that
develops, manufactures and markets scientifically-proven and
practical products that improve the health and productivity of
dairy and beef cattle, today announced a complete refinancing
of its bank debt.
The Company closed on an $8.6 million debt refinancing package
with Gorham Savings Bank comprised of three components. The
first is a ten-year $5.1 million mortgage note bearing interest at
a fixed rate of 3.50% per annum with monthly principal and interest
payments due based on a twenty-five-year amortization
schedule. The second component is a seven-year $3.5 million
note bearing interest at a fixed rate of 3.50% per annum with
monthly principal and interest payments due based on a seven-year
amortization schedule. The proceeds were used to provide some
additional working capital but mostly to refinance $8.3 million in
outstanding bank debt and pay off a related interest rate swap
termination liability of $165,000. The third component is a
$1 million line of credit, which bears interest at a variable rate
equal to the one-month LIBOR plus 2.15%.
“This is a great opportunity for us to lower our interest
rate exposure and extend our loan repayment terms,” commented
Michael F. Brigham, President and CEO. “Given the extreme
volatility being experienced in the financial markets right now, I
believe we will be well-served with this debt financing over the
long term.”
The Company previously had five different loans with interest
rates ranging from fixed rates of 4.38% and 6.04% to variable rates
of the one-month LIBOR plus 2.25% that had been entered into during
different stages of its capital investment programs, including one
with a $452,000 balloon principal payment due during the third
quarter of 2020.
This indebtedness is secured by mortgages and security interests
covering substantially all of the Company’s assets. By bank
debt covenant, the Company is required to maintain $1.4 million in
an escrow account until certain financial conditions are met based
on the Company’s performance during 2020 or after and provided
adequate collateral values relative to outstanding loan balances
are achieved. In comparison, the covenants included in the
repaid debt required the Company to hold $2 million in otherwise
unrestricted cash.
“The Gorham team has been great to work with,” Mr. Brigham
concluded. “They are flexible and creative and met our debt
financing needs effectively, on a timely basis.”
About Gorham Savings Bank:Headquartered in
Gorham, Maine since its founding in 1868, Gorham Savings Bank is a
depositor-owned community bank delivering a full suite of financial
services tailored to the needs of Southern Maine's businesses and
consumers. As the only bank headquartered in Cumberland County, GSB
serves and supports businesses that value local management,
know-how and accountability. The bank offers consumer savings
accounts, personal loans, mortgages, HELOCs, CDs, IRAs and
financial planning services through its 13 branches and growing
network of ATMs, ITMs and mobile services. Gorham Savings Bank is a
tireless advocate for the well-being of the communities it serves,
donating thousands of volunteer hours to dozens of community-based
initiatives annually. Gorham Savings Bank is a member of the FDIC.
Learn more at: http://www.gorhamsavingsbank.com.
About ImmuCell: ImmuCell Corporation's
(Nasdaq: ICCC) purpose is to create
scientifically-proven and practical products that improve the
health and productivity of dairy and beef cattle. ImmuCell
markets First Defense®, providing
Immediate Immunity™ to newborn dairy and beef
livestock, and is in the late stages of developing
Re-Tain™, a novel treatment for subclinical
mastitis without a milk discard requirement that provides an
alternative to traditional antibiotics. Investors are encouraged to
review the Company’s updated Corporate Presentation slide deck that
provides an overview of the Company’s business and is available
under the “Investors” tab of the Company’s website at
www.immucell.com, or by request to the Company. The Company expects
to file its Annual Report on Form 10-K on or about March 27,
2020. Press releases and other information about the Company
are available at: http://www.immucell.com.
Contacts: Michael F. Brigham, President and
CEOImmuCell Corporation(207) 878-2770
Joe Diaz, Robert Blum and Joe DorameLytham Partners, LLC(602)
889-9700iccc@lythampartners.com
Cautionary Note Regarding Forward-Looking Statements
(Safe Harbor Statement):This Press Release contains
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements include, but are not limited
to, any statements relating to: our plans and strategies for our
business; projections of future financial or operational
performance; the timing and outcome of pending or anticipated
applications for regulatory approvals; factors that may affect the
dairy and beef industries and future demand for our products; the
scope and timing of ongoing and future product development work and
commercialization of our products; future costs of product
development efforts; the estimated prevalence rate of subclinical
mastitis; the expected efficacy of new products; estimates about
the market size for our products; future market share of and
revenue generated by current products and products still in
development; our ability to increase production output and reduce
costs of goods sold associated with our new product,
Tri-Shield First Defense®; the
future adequacy of our own manufacturing facilities or those of
third parties with which we have contractual relationships to meet
demand for our products on a timely basis; the anticipated costs of
(or time to complete) planned expansions of our manufacturing
facilities and the adequacy of our funds available for these
projects; the continuing availability to us on reasonable terms of
third-party providers of critical products or services; the
robustness of our manufacturing processes and related technical
issues; estimates about our production capacity, efficiency and
yield; the future adequacy of our working capital and the
availability and cost of third-party financing; future regulatory
requirements relating to our products; future expense ratios and
margins; future compliance with bank debt covenants; future cost of
our variable interest rate exposure on most of our bank debt; costs
associated with sustaining compliance with current Good
Manufacturing Practice (cGMP) regulations in our current operations
and attaining such compliance for the facility to produce the Nisin
Drug Substance; implementation of international trade tariffs that
could reduce the export of dairy products, which could in turn
weaken the price received by our customers for their products; our
effectiveness in competing against competitors within both our
existing and our anticipated product markets; the
cost-effectiveness of additional sales and marketing expenditures
and resources; anticipated changes in our manufacturing
capabilities and efficiencies; the value of our net deferred tax
assets; projections about depreciation expense and its impact on
income for book and tax return purposes; anticipated market
conditions; and any other statements that are not historical facts.
Forward-looking statements can be identified by the use of words
such as “expects”, “may”, “anticipates”, “aims”, “intends”,
“would”, “could”, “should”, “will”, “plans”, “believes”,
“estimates”, “targets”, “projects”, “forecasts”, “seeks” and
similar words and expressions. In addition, there can be no
assurance that future developments affecting us will be those that
we anticipate. Such statements involve risks and uncertainties,
including, but not limited to, those risks and uncertainties
relating to difficulties or delays in development, testing,
regulatory approval, production and marketing of our products
(including the First Defense® product line and
Re-Tain™), competition within our anticipated
product markets, customer acceptance of our new and existing
products, product performance, alignment between our manufacturing
resources and product demand, our reliance upon third parties for
financial support, products and services, changes in laws and
regulations, decision making and delays by regulatory authorities,
currency values and fluctuations and other risks detailed from time
to time in filings we make with the SEC, including our Quarterly
Reports on Form 10-Q, our Annual Reports on Form 10-K and our
Current Reports on Form 8-K. Such statements involve risks and
uncertainties and are based on our current expectations, but actual
results may differ materially due to various factors, including the
risk factors summarized above.
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