Universal Automotive Industries (NASDAQ:UVSL)
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Universal Automotive Retains The Parkland Group to Assist the
Company With Operations and Liquidity Challenges
ALSIP, Ill., Feb. 22 /PRNewswire-FirstCall/ -- Universal Automotive
Industries, Inc. (NASDAQ:UVSL) today announced that it has hired The Parkland
Group to advise the Company in exploring its business and strategic
alternatives to address the Company's severe liquidity challenges and return
the Company to profitability.
The Parkland Group, based in Cleveland, Ohio is a turnaround specialist
focusing on mid-sized manufacturing and distribution companies. The Parkland
Group has demonstrated a track record of stabilizing business while developing
strategic plans for long-term financial strength.
The Parkland Group will assist the Company in addressing the immediate
liquidity challenges, together with identifying additional operational savings.
The Company is currently exploring opportunities to improve its revenue and
return the company to profitability. The Company is undertaking other actions,
including restructuring of leases and operations, with a concurrent focus on
the disposition of assets and the reduction of the workforce.
Discussion with Lender
On December 22, 2004, the Company amended its loan agreement with its principal
lender, Congress Financial Corporation, to require among other things, the
establishment of certain revised minimum sales and EBITDA covenants. The
amendment required the Company to increase its minimum excess availability from
$1,000,000 to $2,000,000 by no later than January 31, 2005 and to pay over to
Congress no less than $3,000,000 of net proceeds from certain approved equity
and/or subordinated debt financings. The Company has not achieved certain of
the EBITDA covenants or the minimum excess availability covenant, and did not
close on any additional debt or equity financings by January 31, 2005.
Congress has continued to fund the Company under the credit facility, and the
Company intends to seek waivers of the covenant violations, and to reset
covenants to reflect current levels of activity. In addition, it continues to
pursue other potential financing avenues. The Company's ability to obtain
financing to assist with its liquidity issues and provide the Company the
access to capital to execute its strategic plans is limited.
This news release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934 as amended, which are intended to be
covered by safe harbors created thereby. Such forward-looking statements,
including the risks referenced in the Company's filings with the Securities &
Exchange Commission, the risk that the Company will not be able to obtain
additional or necessary modifications to support its operations, the risk that
creditors will not continue to extend credit to the Company or take other
actions with respect to past due sums, the risk that funding availability may
adversely impair fill rates and ongoing customer relations and other factors
that may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or
achievements, may vary from the actual results achieved by the Company.
For more information, contact:
Robert W. Zimmer
Universal Automotive Industries, Inc.
708-293-4050 ext. 227
Dodi Handy
Elite Financial Communications Group, LLC
407-580-1080
DATASOURCE: Universal Automotive Industries, Inc.
CONTACT: Robert W. Zimmer, Universal Automotive Industries, Inc.,
+1-708-293-4050, ext. 227; or Dodi Handy, Elite Financial Communications
Group, LLC, +1-407-580-1080, for Universal Automotive Industries, Inc.
Web site: http://www.autospecialty.com/