Coleman Cable reduces debt by $71.3 million in fourth quarter

By Jennifer Lanning Drey

Portland, Ore., March 13 - Coleman Cable, Inc.'s cash generation and lower inventory levels in the fourth quarter allowed the company to reduce total debt by $71.3 million during the period, Richard Burger, chief financial officer of Coleman, said Friday during the company's quarterly earnings conference call.

Fourth-quarter operating cash flow showed a $44.9 million improvement over the fourth quarter of 2007.

In February, the company repaid the remaining $30 million balance on its revolving credit facility, bringing liquidity available under the facility combined with cash on hand to approximately $100 million.

"We believe we are well positioned under our revolving credit facility and cash on hand, and we have no long-term debt repayments until 2012," Burger said.

During the question-and-answer portion of the call, the CFO said Coleman has had discussions with its lenders regarding potentially amending its bank indenture to free the company from current restrictions on buying back bonds. However, to date, all of the discussions have involved an amendment fee, and the company has not reached a satisfactory conclusion on what it would be willing to pay to achieve an amendment, he said.

Sales decline

During the fourth quarter, challenging economic conditions coupled with a severe decline in demand and the price of copper reduced both the company's sales and EBITDA, Burger said.

For the period, Coleman reported net sales of $182.2 million, compared with net sales of $254.3 million in the same quarter of 2007.

In response to the economic challenges, Coleman continues to adjust capacity to reduce costs to match the lower demand levels. The company has reduced its work force by nearly 40% in the past 13 months.

Coleman is a Waukegan, Ill., manufacturer and innovator of electrical and electronic wire and cable products for the security, sound, telecommunications, and electrical, commercial, industrial and automotive industries

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