Alliance HealthCare Services, Inc. (NYSE:AIQ) (the “Company” or “Alliance”), a leading national provider of outpatient diagnostic imaging and radiation therapy services, announced an amendment to its Credit Agreement dated December 1, 2009.
The amendment, which we executed on September 27, 2011, modified the financial covenants to provide Alliance with greater flexibility. Under the amended Credit Agreement, Alliance is required to maintain (i) a maximum ratio of consolidated total debt to consolidated adjusted EBITDA of 5.25 to 1.00 through June 30, 2012, 5.00 to 1.00 from July 1, 2012 through June 30, 2013 and 4.00 to 1.00 thereafter, and (ii) a minimum ratio of consolidated adjusted EBITDA to consolidated interest expense of 2.25 to 1.00 through December 31, 2012, 2.50 to 1.00 from January 1, 2013 through December 31, 2014 and 2.75 to 1.00 thereafter. As of June 30, 2011, Alliance’s ratio of consolidated total debt to consolidated adjusted EBITDA was 4.48 to 1.00 and Alliance’s ratio of consolidated adjusted EBITDA to consolidated interest expense was 3.26 to 1.00.
As part of the amendment, the quarterly amortization payments on the term loan facility were increased from $1.15 million to $3.0 million and our annual excess cash flow sweep percentage was increased from 50% to 75%. Additionally, we agreed to a decrease to the availability under our revolving credit facility from $120.0 million to $70.0 million and to an increase in the margins on borrowings under the Credit Agreement. The amendment also makes other changes to the Credit Agreement, including revisions to the calculation of consolidated adjusted EBITDA and revisions to the covenants related to joint ventures, restricted payments and capital expenditures. In connection with the execution of the amendment, we paid down $25.0 million of the borrowings outstanding under the term loan facility and paid a fee to the consenting lenders.
Non-Compliance with NYSE Listing Standards
Alliance announced it was notified on September 28, 2011, by the New York Stock Exchange (NYSE) that it has fallen below the NYSE’s continued listing standard related to total market capitalization. The NYSE requires that the average market capitalization of a company listed under the Valuation and Cash Flow Standard be not less than $75 million over a consecutive 30 trading-day period. As of September 28, 2011, Alliance’s 30 trading-day average market capitalization was approximately $71.4 million.