[LEINER HEALTH PRODUCTS]
LEINER HEALTH PRODUCTS COMPLETES CREDIT AGREEMENT AMENDMENT FOR
ENHANCED FINANCING FLEXIBILITY
Completes PFI Acquisition
Contacts: Rob Reynolds Jody Burfening/Harriet Fried
Chief Financial Officer Lippert/Heilshorn & Assoc.
310-952-1511 212-838-3777
Carson, CA -- September 26, 2005 -- Leiner Health Products Inc. today announced
it has obtained consent from its secured lenders to amend its Credit Agreement.
The amendment will enhance the company's flexibility to manage the business and
support the acquisition of assets from Pharmaceutical Formulations, Inc.
("PFI").
Leiner also announced the completion of its transaction to purchase
substantially all of the assets related to PFI's solid dose pharmaceutical
products business for $23 million in cash. The purchase price was funded with
$13 million in new equity from Leiner's equity sponsors and $10 million drawn on
Leiner's revolving credit facility. The acquisition excludes PFI's manufacturing
facilities and its branded fiber business, Konsyl Pharmaceuticals, Inc.
The Credit Agreement amendment revises required minimum Consolidated
Indebtedness to Credit Agreement EBITDA Leverage Ratio and Credit Agreement
EBITDA to Consolidated Interest Expense Ratio, commencing with the second
quarter of fiscal 2006, ended September 24, and extending throughout the term of
the Credit Agreement.
"We are pleased with the support and confidence our lenders have shown us in
granting the amendment which will provide additional flexibility as we continue
to navigate the transitions in product landscape," said Robert Kaminski, Chief
Executive Officer. "We are especially excited that the acquisition of PFI assets
gives us the opportunity to be a leader in pain management products across both
the VMS and OTC categories as 40 million Americans turn 50 over the next 20
years. The acquisition also allows us to enhance our contract manufacturing
capabilities and expands our OTC product offering and customer base."
The amendment and acquisition are more fully described in the Form 8-K report
that Leiner will file tomorrow with the Securities and Exchange Commission.
About Leiner Health
Founded in 1973, Leiner Health Products, headquartered in
Carson, Calif., is America's leading manufacturer of store brand vitamins,
minerals, and nutritional supplements and its second largest supplier of
over-the-counter pharmaceuticals in the food, drug, mass merchant and warehouse
club (FDMC) retail market, as measured by retail sales. Leiner provides nearly
40 FDMC retailers with over 3,000 products to help its customers create and
market high quality store brands at low prices. It also is the largest supplier
of vitamins, minerals and nutritional supplements to the US military. Leiner
markets its own brand of vitamins under YourLife(R) and sells over-the-counter
pharmaceuticals under the Pharmacist's Formula(R) name. Last year, Leiner
produced 27 billion doses that help offer consumers high quality, affordable
choices to improve their health and wellness.
Forward-looking Statement
This press release contains "forward-looking
statements" that are subject to risks and uncertainties. These statements often
include words such as "may," "will," "should," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential" or "continue," the negative of
such terms or similar expressions. These statements are only predictions. In
addition to risks and uncertainties noted in this press release, there are risks
and uncertainties that could cause the company's actual operating results to
differ materially from those anticipated by some of the statements made. Such
risks and uncertainties include: (i) slow or negative growth in the vitamin,
mineral, supplement or over-the-counter pharmaceutical industry; (ii) adverse
publicity regarding the consumption of vitamins, minerals, supplements or
over-the-counter pharmaceuticals; (iii) increased competition; (iv) increased
costs; (v) our inability to obtain the requested amendments from the senior
lenders under a New Credit Facility at favorable terms, or at all; (vi)
increases in the cost of borrowings and/or unavailability of additional debt or
equity capital; (vii) changes in general worldwide economic and political
conditions in the markets in which the company may compete from time to time;
(viii) the inability of the company to gain and/or hold market share of its
customers; (ix) exposure to and expenses of defending and resolving product
liability claims and other litigation; (x) the ability of the company to
successfully implement its business strategy; (xi) the inability of the company
to manage its operations efficiently; (xii) consumer acceptance of the company's
products; (xiii) introduction of new federal, state, local or foreign
legislation or regulation or adverse determinations by regulators; (xiv) the mix
of the company's products and the profit margins thereon; and (xv) the
availability and pricing of raw materials. The company expressly disclaims any
obligation to update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.