Linwood, Pennsylvania - Foamex International Inc. said it expects Foamex LP, its chief operating unit, to achieve its desired level of consolidated earnings (EBITDA - earnings before interest, tax, depreciation and amortisation) for 2007.
Foamex needs this earnings level, as defined in Foamex LP's credit agreements, in order to comply with its financial covenants.
Its credit agreements require a minimum consolidated EBITDA at the end of the fourth quarter of 2007 of about $97 million.
The major polyurethane foam group also, "significantly exceeded its targets for debt reduction in 2007," said a 13 Feb statement.
Net debt on 30 Dec 2007 was about $529 million and gross debt was about $534 million. Bob Larney, executive vice president and chief financial officer of Foamex, said in the statement: "I'm pleased with the company's strong ability to generate cash to reduce debt."
The foamer has received commitments for up to $20 million of additional investment from D.E. Shaw Laminar Portfolios llc, Goldman Sachs & Co. and Sigma Capital Management llc. Foamec thinks this cash will help it comply with the financial covenants under its credit agreements during 2008.
"With these commitments, our major shareholders have shown that they are very supportive of the company, and now management can spend more time and effort on our operational and strategic growth plans," said Jack Johnson, president and chief executive officer of Foamex, in the statement.