SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 15, 1998
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ICON Fitness Corporation
IHF Holdings, Inc.
ICON Health & Fitness, Inc.
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(Exact Name of Registrant as Specified in its Charter)
333-18475 87-0566936
33-87930-01 87-0531209
Delaware 33-87930 87-0531206
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
1500 South 1000 West
Logan, Utah 84321
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(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code 435-750-5000
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On or about July 15, 1998 ICON Health & Fitness, Inc. amended its credit
agreement with General Electric Capital Corporation to:
1) Amend the borrowing base by increasing the categories of eligible
accounts receivable and inventory and also provided for a $5 million advance in
addition to the above increases. This amendment did not increase the total
permitted borrowings of $310 million;
2) Amend the financial covenants for the 12 month periods ending May 31,
1998, August 31, 1998, November 30, 1998 and February 28, 1999; and
3) Amend other items including changes to applicable margins through the
expiration of the credit agreement, covenants regarding Year 2000 compliance and
corrective actions, and additional representation and reporting requirements.
The amendment did not change the maturity of the revolving line of credit from
November 15, 1999.
For the year ended May 31, 1998, ICON Health & Fitness, Inc. had net sales of
$749.3 million, income from operations of $23.9 million, net loss of $9.5
million and EBITDA of $41.4 million. The following table includes unaudited
financial information for the year ended May 31, 1998.
For the Year Ended May 31,
(dollars in millions)(unaudited)
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ICON Health IHF ICON
& Fitness, Holdings, Fitness
Inc. Inc. Corporation
1998 1998 1998
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Operating Data:
Net sales $749.3 $749.3 $749.3
Cost of sales 536.0 536.0 536.0
Gross profit 213.3 213.3 213.3
Operating expenses 189.4 189.4 189.4
Income from operations 23.9 23.9 23.9
Net Income/(loss) (9.5) (19.2) (27.6)
For the Year Ended May 31,
(dollars in millions)(unaudited)
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ICON Health IHF ICON
& Fitness, Holdings, Fitness
Inc. Inc. Corporation
1998 1998 1998
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Balance Sheet Data (at 5/31/98):
Cash $ 3.9 $ 3.9 $ 3.9
Working capital 152.9 152.9 152.9
Total assets 363.1 378.1 387.9
Total indebtedness 274.5 366.5 466.8
Stockholders' deficit (20.3) (97.3) (187.8)
Other Data:
Depreciation and amortization 21.7 35.5 48.2
Capital expenditures 11.8 11.8 11.8
EBITDA (1) 41.4 41.4 41.4
Cash flow from operations 47.6 47.6 47.6
Cash flow from investing
activities 6.4 6.4 6.4
Cash flow from financing
activities (55.7) (55.7) (55.7)
(1) "EBITDA" is defined herein as income before provisions for (benefit from)
income taxes, depreciation, amortization and interest expense. EBITDA is
presented because the Registrant believes it is frequently used by security
analysts in the evaluation of companies. However, EBITDA should not be
considered as an alternative to net income as a measure of operating results or
to cash flows as a measure of liquidity in accordance with generally accepted
accounting principles.
Item 7 Exhibits
(c) Exhibits
10.1B Amended and Restated Credit Agreement dated as of July 15, 1998 among
ICON Health & Fitness, Inc., the lenders named therein, and General
Electric Capital Corporation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ICON Fitness Corporation
IHF Holdings, Inc.
ICON Health & Fitness, Inc.
Date: August 19, 1998 By: /s/ S. Fred Beck
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Name: S. Fred Beck
Title: Chief Financial Officer