Ailing IRT Reports Loss, $11 Million in New Financing
The financial hemorrhaging at IRT Corp. continued over the first quarter ended June 30 as the radiation technology company reported a $2.1-million loss on significantly lower revenue of $7.7 million.
IRT also said it had received $11 million in new debt financing this week but, as part of the deal, gave a stock warrant to one of the lenders, Citicorp, to buy 550,000 IRT shares at $5 each, which, if exercised, would make the bank the owner of 12% of the company.
IRT’s loss contrasts with a profit of $389,000 on revenue of $11.4 million for the same three-month period last year. IRT posted a net loss of $576,000 for fiscal 1987 ended March 31 and a loss of $4.4 million for fiscal 1986.
In a prepared statement, IRT Chairman Clifford Brokaw blamed “delays in customer project scheduling” and costs related to IRT’s closing of its Atlanta manufacturing facility for the loss. IRT makes automated inspection equipment for manufacturers and sells nuclear survivability services to defense companies.
The company’s highly sophisticated inspection systems, which use robotic vision, have in the past been plagued by delivery delays and cost overruns.
The new financing consists of a $6-million line of credit from Sanwa Bank that replaces an $8-million credit line. Also, the company got a $5-million loan from Citicorp at 13.25% interest, payable in quarterly installments. The company will not begin to pay down the loan principal until 1991.
Citicorp’s warrant to buy IRT shares is exercisable at any time from now to 1997. IRT stock closed off $.25 at $3.625 per share in American Stock Exchange trading Thursday.
Four IRT directors made a $2-million equity investment in the company in November, buying nearly 364,000 shares at $5.50 each. IRT said at the time that the investment was not a requirement of IRT lenders, although the company had apparently come close to falling out of compliance with loan covenants.
