Argyle lands $3m

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Sunday, March 1, 2009

SAN ANTONIO--With the current economic climate in mind, company officials at integrator and product manufacturer Argyle Security are gratified to have an additional $3 million equity investment and more favorable debt structure thanks to moves made in January.

The investment comes from Mezzanine Management, which invested $15 million in April 2008 as well.

“What this financing enabled us to do,” said Argyle CFO Don Neville, “is leverage the balance sheet by paying down the debt with the Private Bank, our primary senior lender. And it enabled us to have some favorable relaxation of our financial covenants.”

Further, the company restructured debt with another lender so that it comes due in January 2011 instead of January 2010.

However, said Sam Youngblood, president of Argyle Security USA, the economy hasn’t yet impacted Argyle’s bottom line. “So far, we haven’t seen a decline,” he said. “I think that’s because of the vertical markets that we’re in. We focus on prisons, jails, police stations, courthouses, hospitals, petrochemical, ports, transportation, and other infrastructure portions of the economy, and in those markets we haven’t seen a decline in spending. Our forecasts are ones where we think the market can keep up with what we’ve seen in the past. We’re not seeing that there’s huge growth out there right now, but there are certain verticals that will have growth in them for this next year. We’re focused on those markets where we know there’s money and money needs to be spent.”

For example, he said, facilities with on-site chemicals governed by CFATS regulations, or states with prison overcrowding issues where new facilities will have to be built.