ALDILA SIGNS NEW $7,000,000 LINE OF CREDIT
Jun 15, 2012
OTC Disclosure News Service
Poway, CA –
Scott M. Bier, Vice President, CFO
Sylvia J. Castle, Investor Relations
Aldila, Inc. (858) 513-1801
FOR IMMEDIATE RELEASE
ALDILA SIGNS NEW $7,000,000 LINE OF CREDIT
Poway, CA, June 15, 2012 – ALDILA, INC. (OTCQX:ALDA) (PINKSHEETS:ALDA) announced today Aldila, Inc. (“Aldila”) and its primary operating subsidiary, Aldila Golf Corporation (“AGC”) entered into a material definitive agreement when a Credit and Security Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association became effective on Friday, June 8, 2012. This Credit Agreement replaces the previous loan arrangement between Aldila and Wells Fargo.
The Credit Agreement establishes a revolving line of credit that will allow AGC to borrow up to $7,000,000 (“Maximum Credit Amount”) from time to time for working capital requirements. The line of credit is asset-based and borrowings are against eligible domestic and international accounts receivable and against eligible domestic raw material and finished goods inventory. Advances under the line of credit will bear interest at a rate of 4.0% above the three-month LIBOR rate with a minimum monthly interest of $10,000 per month. AGC will pay Wells Fargo an initial origination fee of $70,000, payable one-half upon signing the Credit Agreement and the other half on the first anniversary of signing (or the early termination of the Credit Agreement). AGC will also pay a monthly unused line fee of 0.3% of the daily average of the unused portion of the total line of credit. Neither Aldila nor AGC are permitted to use the line of credit to pay dividends or to purchase their stock. The line of credit is secured by all of AGC’s accounts receivable and other rights of payment, general intangibles, inventory, and equipment. The early termination of the Credit Agreement will result in all outstanding advances becoming immediately due and payable, and a termination fee calculated as follows: (i) before the first anniversary, 2.0% of the Maximum Credit Amount, (ii) between the first and second anniversary, 0.5% of the Maximum Credit Amount, and (iii) after the second anniversary there is no termination fee.
AGC’s obligations to Wells Fargo are guaranteed by Aldila, which has also granted a security interest in all of its accounts receivable and other rights of payment, general intangibles, inventory, and equipment.
The foregoing description of the Credit Agreement and related documents is not complete and is qualified in its entirety by reference to the complete text of the Credit Agreement and related documents which will be filed on the OTC News and Disclosure Service, available at www.OTCQX.com.
This press release contains forward-looking statements based on our expectations as of the date of this press release. These statements necessarily reflect assumptions that we make in evaluating our expectations as to the future. Forward-looking statements are necessarily subject to risks and uncertainties. Our actual future performance and results could differ from that contained in or suggested by these forward-looking statements as a result of a variety of factors. Our filings with the OTC Disclosure and News Service and the Securities and Exchange Commission (for filings prior to move to OTCQX U.S. Premier) present a detailed discussion of the principal risks and uncertainties related to our future operations, in particular our Annual Report for the year ended December 31, 2011, under “The nature of issuer’s business” in Part C, Item VIII, and “Management’s Discussion and Analysis or Plan of Operation” in Part C, Item XVI and Quarterly Reports and Current Reports, all of which can be obtained on the OTCQX U.S. Premier website, which can be found at www.otcqx.com.
The forward-looking statements in this press release are particularly subject to the risks that:
- consumer discretionary spending will be flat or decline, which could have a material impact on our business;
- our product offerings, including the NV®, VS Proto™, DVS®, VooDoo® and RIP® shaft lines and product offerings outside the golf industry, will not achieve or maintain success with consumers or customers;
- we will not maintain or increase our market share at our principal customers;
- demand for clubs manufactured by our principal customers will decline, thereby affecting their demand for our shafts;
- demand for composite materials by our principal customers will decline or fail to continue to grow;
- the market for graphite shafts will continue to be extremely competitive, affecting selling prices and profitability;
- our international operations will be adversely affected by political instability, currency fluctuations, export/import regulations or other risks typical of multi-national operations, particularly those in less developed countries;
- the Company will not be able to acquire adequate supplies of carbon fiber at reasonable market prices;
- acts of terrorism, natural disasters, or disease pandemics interfere with our manufacturing operations or our ability to ship our finished products.
For additional information about Aldila, Inc., please go to the Company’s website at www.aldila.com.
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