Cybex International, Inc. has consummated its previously announced financing with GMAC Commercial Finance. This new facility provides a five-year term loan of $13,000,000 at a floating interest rate (currently approximately 6.5%). The proceeds from the financing were used to retire the Hilco $11,000,000 credit facility, which had borne interest at 15.5%, and a separate $1,600,000 term loan from CIT Group/Business Credit.
Following the new financing, CIT Group/Business Credit remains Cybex's working capital and a term loan lender. The CIT facility, in conjunction with the consummation of the GMAC financing, was modified to among other things extend the facility one year to July 16, 2007 and increase a term loan by $2,000,000 while reducing the term loan interest rate.
The new GMAC facility and the modified CIT facility will provide annualized interest savings of approximately $1,000,000 and increased liquidity to Cybex. In the third quarter 2004, however, interest savings will be offset by the immediate expensing of the balance of financing costs of approximately $340,000 associated with the Hilco credit facility.
Art Hicks, Chief Financial Officer of Cybex, stated “These credit facilities will give us greater liquidity and financial flexibility to continue to grow our business while significantly reducing our cost of capital and interest expense.”
