DALLAS, July 5, 2013 /PRNewswire/ -- The Hallwood
Group Incorporated (NYSE MKT: HWG), a Delaware corporation (the "Company"), provides
an update regarding its liquidity situation. As previously
disclosed, on May 13, 2013, the
promissory note associated with the loan provided by Hallwood
Family (BVI), L.P. (the "HFL Loan") was amended, pursuant to a
Second Amendment to Promissory Note, to convert it to a revolving
credit facility to provide additional liquidity to the
Company. The maturity date of the promissory note continues
to be June 30, 2015.
In late May 2013, the Company
received an approximate $4,300,000
refund from the IRS of 2010 federal taxes. The proceeds of
these funds were used to pay $4,000,000 towards principal and interest
outstanding on the HFL Loan, with the balance retained for the
Company's expenses and cash needs, Accordingly, as of
June 30, 2013, the outstanding
balance of the HFL Loan was $5,411,000 as compared to $9,047,000 as of March
31, 2013.
Subject to the terms and conditions of the HFL Loan, as amended,
upon written request, the Company may borrow and receive advances
of amounts requested by the Company (including amounts previously
repaid) not to exceed either of:
(a) The amount in each calendar quarter equal to the amount
budgeted by the Company to fund general and administrative costs
for that calendar quarter; or
(b) An amount that would result in the aggregate principal
amount of the HFL Loan to exceed $10,000,000.
The Company's general and administrative costs are estimated to
be approximately $1,100,000,
$940,000, and $986,000 in the second, third and fourth quarters
of 2013, respectively. These general and administrative costs are
estimated based on historic recurring costs of the Company and the
actual amount of general and administrative costs of the Company
for these periods could differ significantly as a result of
unforeseen and/or other non-recurring costs.
As of June 30, 2013, the Company
had $695,000 of credit availability
under the HFL Loan for general and administrative costs for the
second quarter, and all of the availability for the third and
fourth quarters of 2013 of $940,000
and $986,000,
respectively.
The above only constitutes a summary of certain material terms
of the Second Amendment to the Promissory Note. For the
complete terms, please read the Second Amendment to the Promissory
Note filed as Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission (the
"SEC") on May 15, 2013.
This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements generally can be identified by the use
of forward-looking terminology, such as "may," "will," "would,"
"expect," "intend," "could," "estimate," "should," "anticipate",
"doubt" "plan" "forecast" or "believe." The Company intends
that all forward-looking statements be subject to the safe harbors
created by these laws. All statements other than statements
of historical information provided herein are forward-looking and
may contain information about financial results, economic
conditions, trends, and known uncertainties. All forward-looking
statements are based on current expectations regarding important
risk factors. Many of these risks and uncertainties are
beyond the Company's ability to control, and, in many cases, the
Company cannot predict all of the risks and uncertainties that
could cause actual results to differ materially from those
expressed in the forward-looking statements. Actual results
could differ materially from those expressed in the forward-looking
statements, and readers should not regard those statements as a
representation by the Company or any other person that the results
expressed in the statements will be achieved. Important risk
factors that could cause results or events to differ from current
expectations are described in the Company's annual report on Form
10-K for the year ended December 31,
2012 under Item 1A –"Risk Factors". These factors are
not intended to be an all-encompassing list of risks and
uncertainties that may affect the operations, performance,
development and results of the Company's business. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The
Company undertakes no obligation to release publicly the results of
any revisions to these forward-looking statements which may be made
to reflect events or circumstances after the date hereof, including
without limitation, changes in its business strategy or planned
capital expenditures, growth plans, or to reflect the occurrence of
unanticipated events, although other risks and uncertainties may be
described, from time to time, in the Company's periodic filings
with the SEC.
SOURCE The Hallwood Group Incorporated
