Orthofix lenders waive financial statement delivery until March 2014

By Marisa Wong

Madison, Wis., Aug. 19 - Orthofix International NV entered into on Aug. 14 a limited waiver to its credit agreement dated Aug. 30, 2010 after failing to file a 10-Q for the quarter ended June 30 on time.

According to an 8-K filed Monday with the Securities and Exchange Commission, lenders under the credit agreement waived requirements that Orthofix deliver quarterly financial statements for the fiscal quarters ended June 30 and ending Sept. 30, along with other related financial covenant certificates, until the earlier of March 31, 2014 or the date that is one day after those financial statements are publicly filed or released.

In addition, the limited waiver provides that the company's restatement of financial statements for any period ended on or before March 31 will not constitute a default or event of default, provided that within one business day after the public release or filing of those restated financial statements, subsidiary Orthofix Holdings, Inc. delivers corrected financial statements and compliance certificates for the restated periods and immediately pays any additional interest and other fees that would have been owed had applicable interest and fees originally been calculated based on the restated financial statements.

Between May and July, Orthofix made payments of roughly $39.5 million to repurchase shares of its common stock under a previously disclosed repurchase program. The filing said the limited waiver provides that these payments will not be treated as a reduction to EBITDA under the credit agreement's fixed charge coverage ratio compliance covenant.

Also, Orthofix Holdings agreed that the aggregate amount of borrowings under the credit agreement is not to exceed $50 million until one business day after delivery of quarterly financial statements for the fiscal quarters ended June 30 and ending Sept. 30 and the related financial covenant certificates and demonstration that Orthofix Holdings was in compliance with the terms of the credit agreement as of the end of each of those two quarters.

Orthofix is a Curaçao-based medical device company.

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