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| WMANQ.OB > SEC Filings for WMANQ.OB > Form 8-K on 20-Aug-2008 | All Recent SEC Filings |
20-Aug-2008
Entry into a Material Definitive Agreement
On August 15, 2008, Wellman, Inc. (the "Company") and certain of its
subsidiaries (collectively, the "Debtors") entered into the ninth amendment of
its senior secured super-priority Debtor in possession credit agreement dated
February 26, 2008 (the "Credit Agreement") among the Company and certain of its
domestic subsidiaries, as borrowers, Deutsche Bank Securities Inc., as sole lead
arranger and bookrunner, Deutsche Bank Trust Company Americas, as administrative
agent and collateral agent, and the lenders that from time to time become party
thereto. Under the default provision in Section 9.1(i)(xvi) of the Credit
Agreement as amended, it would have been an event of default if the Company had
not obtained approval of its disclosure statement by August 15, 2008, obtained
an order confirming the Plan by September 26, 2008 and emerged from bankruptcy
prior to October 6, 2008. The letter agreement amended the Credit Agreement so
that these deadlines are August 29, 2008, October 10, 2008 and October 20, 2008,
respectively.
In addition, the Credit Agreement contains certain financial covenants and
other covenants. One of these covenants is that we must maintain a Minimum
EBITDA, which is measured based on the cumulative monthly EBITDA starting with
the month of March 2008. EBITDA, as defined under the Credit Agreement, is
calculated by adding Earnings (Loss) from continuing operations, income tax
expense (benefit), interest expense, non-cash charges, and non-recurring fees,
cash charges, and other cash expenses made or incurred in connection with
entering into the Credit Agreement. We were not in compliance with the minimum
cumulative EBITDA requirement for the months ending June 30th and July 31st
2008. The Administrative Agent, on behalf of the Majority Lenders, consented to
waive compliance with the minimum EBITDA requirement set forth in Section 8.1(a)
of the Credit Agreement for the period from August 15, 2008 through August 29,
2008.
Item 2.02. -Results of Operations and Financial Condition.
The information set forth in Item 7.01 below is incorporated by reference in this Item 2.02 as if fully set forth herein. Item 7.01. Regulation FD Disclosure.
On August 20, 2008, Wellman, Inc. (the "Company") and certain of its
subsidiaries (collectively, the "Debtors") filed their unaudited consolidated
Monthly Operating Statements for the month ended July 31, 2008 (the "Monthly
Operating Statements"), with the United States Bankruptcy Court for the Southern
District of New York (the "U.S. Bankruptcy Court") in the matter of In re
Wellman, Inc., et al., Case No. 08-10595 (SMB). Exhibit 99.1 to this Current
Report on Form 8-K contains the unaudited consolidated Monthly Operating
Statements as filed with the United States Bankruptcy Court.
The Monthly Operating Statements are limited in scope, cover a limited time
period, and have been prepared solely for the purpose of complying with the
monthly reporting requirements of the U.S. Bankruptcy Court. The financial
information in the
Monthly Operating Statements is in a format required by the U.S. Bankruptcy
Court and the Company's Debtor-in-Possession credit agreement, is preliminary
and unaudited and does not purport to show the financial statements of any of
the Debtors in accordance with accounting principles generally accepted in the
United States of America ("GAAP"). Therefore, the Monthly Operating Statements
may exclude items required by GAAP, such as certain reclassifications,
eliminations, accruals, valuations and disclosure items. The Company cautions
readers not to place undue reliance upon the Monthly Operating Statements. There
can be no assurance that such information is complete and the Monthly Operating
Statements may be subject to revision. The Monthly Operating Statements should
be read in conjunction with the Consolidated Financial Statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2007.
These Monthly Operating Statements have been derived from the books and
records of the Company. They, however, have not been subjected to procedures
that would typically be applied to financial information presented in accordance
with GAAP and, upon the application of such procedures, the Company believes
that they could be subject to changes, and these changes could be material. The
information furnished in the Monthly Operating Statements includes certain
normal recurring adjustments but may not include all of the adjustments that
would typically be made for quarterly financial statements in accordance with
GAAP. In addition, certain information and footnote disclosures normally
included in financial statements prepared in accordance with GAAP have been
condensed or omitted.
Access to documents filed with the U.S. Bankruptcy Court and other general
information about the Chapter 11 cases is available at www.kccllc.net/wellman.
The content of the foregoing website is not a part of this Report.
Limitation on Incorporation by Reference
The Monthly Operating Statements are being furnished for information purposes
only and are not deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") or otherwise subject to
the liabilities of that section and shall not be deemed incorporated by
reference in any filing under the Securities Act of 1933, as amended (the
"Securities Act"). Registration statements or other documents filed with the SEC
shall not incorporate the Monthly Operating Statements or any other information
set forth in this Report by reference, except as otherwise expressly stated in
such filing. This Report will not be deemed an admission to the materiality of
any information that is required to be disclosed solely by Regulation FD.
Forward-Looking Statements
In addition to historical information, this Report contains forward-looking
statements within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act. Words such as "believe," "intend", "expect,"
"anticipate," "plan," "may," "will," and similar expressions are intended to
identify forward-looking statements. Such statements include, among others,
those concerning the Company's expected financial performance, as well as all
assumptions, expectations, predictions, intentions or beliefs about future
events. These Statements are made as of the date of this Report based upon
current expectations, and we undertake no obligation to update this information,
whether as a result of new information, future developments or otherwise. These
forward-looking statements involve certain risks and uncertainties, including,
but not limited to: our substantial liquidity needs and liquidity pressure; our
substantial indebtedness and its impact on our financial health and operations;
risks associated with our indebtedness containing floating interest rate
provisions and its effect on our financial health if rates rise significantly;
our ability to obtain additional financing in the future; risks associated with
claims not discharged in the Chapter 11 cases and their effect on our results of
operations and profitability; risks associated with the transfers of our equity,
or issuances of equity in connection with our reorganization and our ability to
utilize our federal income tax net operating loss carry-forwards in the future;
our dependence on our management and employees; the adverse effect of
competition on our performance; reduced raw material margins; availability and
cost of raw materials; reduced sales volumes; increase in costs; volumes of
textile imports; prices and volumes of polyester staple fiber and PET resin
imports; the financial condition of our customers; change in tax risks;
environmental risks; natural disasters; regulatory changes; U.S., European,
Asian and global economic conditions; work stoppages; levels of production
capacity and profitable operations of assets; prices of competing products; acts
of terrorism; and maintaining the operations of our existing production
facilities. Actual results may differ materially from those expressed herein.
Results of operations in any past period should not be considered indicative of
results to be expected in future periods. Fluctuations in operating results may
result in fluctuations in the price of our common stock.
Item 9.01. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
99.1 Wellman, Inc.'s Unaudited Monthly Operating Statements for the month
ended July 31, 2008.
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