Colt Defense amends financial report for quarter ended June 29, 2014

By Caroline Salls

Pittsburgh, May 29 – Colt Defense, LLC amended its results for the quarter ended June 29, 2014 in response to comments from the Securities and Exchange Commission, according to a 10-Q/A filed Friday with the SEC.

In the amended 10-Q, Colt said it added language related to its current liquidity position and ability to continue as a going concern.

The company said it still has not made the payment due May 15 on its senior notes and is not in compliance with the indenture because of its failure to file financial reports for the year ended Dec. 31 and the quarter ended April 5.

As a result, Colt said there is substantial doubt about its ability to continue as a going concern. The company said its ability to continue as a going concern will depend on its ability to complete asset sales, restructure or refinance existing debt, obtain modifications or waivers of loan covenants or other actions.

If it does not complete its previously announced exchange offer or prepackaged plan for any reason, Colt said it may need to file bankruptcy without the benefit of a pre-approved plan.

On May 26, Colt announced an extension of its exchange offer and solicitation of acceptances to the prepackaged plan to June 2 as it continues its discussions with an informal group of noteholders.

According to the 10-Q/A, the changes to the results for the quarter ended June 29, 2014 include a net loss of $12.59 million for the quarter and $20.54 million for the six months ended June 29, 2014, respectively. The original 10-Q listed $12.59 million of net income for the quarter in question and $12.54 million of net income for the six-month period.

The company said the amended numbers resulted in an increase in cash used in operations and a decrease in cash used in investing activities of $196,000.

As of May 22, the company had $11.1 million of cash and cash equivalents, of which $4.7 million is restricted cash. Colt said it does not have any incremental borrowing capacity under its existing debt agreements.

Colt Defense is a West Hartford, Conn., manufacturer of firearms.

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