Sfbc (NASDAQ:SFCC)
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SFBC International, Inc. (NASDAQ:SFCC), a provider of
drug development services to branded pharmaceutical, biotechnology,
generic drug and medical device companies, today issued a response to
Moody's downgrade to SFBC International, Inc.'s (hereinafter referred
to as the "Company" or "SFBC") Corporate Family Rating and Senior
Secured Credit Facility.
"We are disappointed that Moody's took this rating action in light
of the recent progress we have made in addressing certain near-term
issues, primarily associated with our Miami facility," stated Jeffrey
P. McMullen, president and chief executive officer of SFBC
International. "We believe this rating action was unfounded given the
underlying fundamentals of our business, the increase of our cash
position by approximately $8 million since year end, and our
anticipated positive cash flow from operations and free cash flow in
2006. In addition, our capital expenditures in 2006 can be financed in
multiple ways and a portion of them are discretionary to support
future growth and flexibility for the Company."
Mr. McMullen concluded, "We remain focused on enhancing our
financial strength and leadership position in the drug development
services industry and we will do what is necessary to ensure the
future success of our company. We look forward to continue working
with Moody's to help them better understand our company and its
improving prospects."
The change in Moody's ratings has no impact on the cost of debt
under the Company's existing credit facility, which has $17 million
drawn upon it, and does not trigger any defaults under the Company's
credit agreements with its lenders.
About SFBC International, Inc.
SFBC is an international drug development services company
offering a comprehensive range of clinical development, clinical and
bioanalytical laboratory, and consulting services to the branded
pharmaceutical, biotechnology, generic drug and medical device
industries. SFBC has more than 35 offices, facilities and laboratories
with approximately 2,500 employees strategically located throughout
the world. For more information, visit SFBC's website at
http://www.sfbci.com.
Forward-Looking Statements
The statements made in this press release relating to Moody's
downgrade to the Company's Corporate Family Rating and Senior Secured
Credit Facility are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "Act").
Additionally words such as "seek," "intend," "believe," "plan,"
"estimate," "expect," "anticipate" and other similar expressions are
forward-looking statements within the meaning of the Act. Some or all
of the results anticipated by these forward-looking statements may not
occur. Factors that could cause or contribute to such differences
include, but are not limited to, whether adverse publicity relating to
SFBC's Miami operations causes clients to select competitors, not only
for early stage branded clinical trials but also for other aspects of
SFBC's business; SFBC's ability to resolve open issues relating to its
Miami property including remediation costs, whether a building permit
will be issued, whether it can complete its remediation plan on a
timely basis and within reasonable cost parameters, whether SFBC will
prevail in the pending land lease litigation and whether, depending on
the outcome of these issues, it will relocate or close its Miami
facility; continued adverse publicity related to actions of the United
States Senate Finance Committee; developments with respect to the
SEC's inquiry; SFBC's ability to successfully achieve and manage the
technical requirements of specialized clinical trial services, while
complying with applicable rules and regulations; the Miami
subsidiary's continued ability to recruit participants for clinical
trials; regulatory changes; changes affecting the clinical research
industry; a reduction of outsourcing by pharmaceutical and
biotechnology companies; SFBC's ability to compete internationally in
attracting clients in order to develop additional business;
cancellation of contracts; SFBC's ability to retain and recruit new
employees; SFBC's clients' ability to provide the drugs and medical
devices used in its clinical trials; the willingness of SFBC's lenders
to agree to covenant and other changes to the Credit Facility; SFBC's
ability to sell its land in Quebec City, Canada to investors who will
finance the construction of SFBC's new Canadian headquarters for
Anapharm Inc. and lease the completed facility back to SFBC; Moody's
downgrade to SFBC's Corporate Family Rating and Senior Secured Credit
Facility; and the national and international economic climate as it
affects drug development operations. Further information can be found
in SFBC's risk factors contained in the Form 10-K filed with the SEC
in 2006 and other filings with the Securities and Exchange Commission.