Exhibit 99.2
[LOGO - XXXX INDUSTRIES, INC.]
WORLD HEADQUARTERS
0000 X. Xxxxx Xx.
Xxxxxx, XX 00000 XXX
Ph: 000-000-0000
FAX: 000-000-0000
FOR FURTHER INFORMATION:
Xxxx Xxxxxxxxx
Treasurer
(000) 000-0000
xxxx.xxxxxxxxx@xxxxxxx.xxx
XXXX SIGNS AMENDMENT TO CREDIT AND FORBEARANCE AGREEMENTS
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COMPANY TO EXPLORE STRATEGIC ALTERNATIVES,
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INCLUDING POSSIBLE SALE OF THE COMPANY
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July 1, 2002, Peoria, IL -- XXXX Industries, Inc. (Nasdaq: XXXX), a global
provider of infrastructure equipment for the telecommunications industry,
announced today that it has entered into an amendment to its credit and
forbearance agreements with its bank lenders. The amendment to the credit
agreement decreases the maximum revolving loan commitment from $25 million
to $23 million and modifies the definition of the borrowing base to provide
XXXX up to $1,500,000 of additional borrowing capacity. Under the amendment
to the forbearance agreement, the bank lenders have agreed to extend until
August 31, 2002 the period during which they will forbear from enforcing
any remedies under the credit agreement arising from XXXX'x breach of all
of the financial covenants contained in the credit agreement. If these
financial covenants and related provisions of the credit agreement are not
amended by August 31, 2002, and the bank lenders do not waive any defaults
by that date, the bank lenders will be able to exercise any and all
remedies they may have in the event of a default.
XXXX also announced today that it has engaged Xxxxx X. Xxxxxxx Company
Limited ("Solomon") to assist the Company in exploring strategic
alternatives for the Company, including a possible sale, merger, other
business combination or restructuring involving the Company.
In addition, XXXX said today that it has substantially completed its
previously-announced program of testing and repairing internal flange poles
that it has fabricated and sold since 1999. In April of this year XXXX
learned that one of its customers had an internal flange pole that
collapsed. As a result, XXXX notified the U.S. Consumer Product Safety
Commission and implemented a comprehensive testing program to help ensure
that the internal flange poles conform to XXXX'x quality standards. Based
upon the testing and repair work done to date, XXXX currently believes that
the total cost of addressing the problem will be approximately $3 million,
all of which will be incurred in fiscal year 2002.
XXXX Industries, Inc. is a leading manufacturer and installer of
telecommunications infrastructure equipment for the wireless and fiber
optic industries. Its products are used in cellular, PCS, fiber optic
networks for the Internet, radio and television broadcast markets. The
company's products include towers, equipment enclosures, cabinets, poles
and antennae mounts, as well as design and construction services. XXXX has
manufacturing locations in Peoria, Ill.; Frankfort, Ind.; and Bessemer,
Ala.
Statements in this press release include "forward-looking statements"
within the meaning of the Securities Exchange Act of 1934, the Private
Securities Litigation Reform Act of 1995 and other related laws, and
include, but are not limited to, those statements relating to sales and
earning expectations, expected demand and other statements of outlook. The
actual results and effects could differ materially from those currently
anticipated in our forward-looking statements. Factors and risks that could
cause such differences include, but are not limited to: wireless and fiber
optic communications industry capital spending; the ability of our
customers to secure adequate financing; elections by customers to terminate
or delay previously placed orders; the effects of competition, particularly
on pricing and margins; our implementation of our growth objectives in
foreign markets; our indebtedness, which could restrict our operations,
making us more vulnerable to adverse economic conditions and making it more
difficult for us to implement our business strategy; our failure to cure,
or obtain amendments or waivers with respect to, existing defaults under
our credit agreement; our Commonwealth of Pennsylvania construction project
staying on its currently anticipated schedule; and regulatory changes
affecting our industry. The cautionary statement contained in Exhibit 99.1
to XXXX'x Form 10-K is incorporated herein by reference. Our
forward-looking statements are given as of the date of this release and we
are not undertaking any duty or obligation to update these statements
publicly as a result of new information, future events or otherwise.
