Brad Forst, president and CEO of Simula, Inc. (NYSE:SMU – news), has said that as a result of recent transactions, the company has been able to reduce its long term indebtedness by more than $4 million while significantly improving its liquidity.

As of October 16, 2000, the company had no outstanding balance against its $17 million working capital credit line.

Noting that further improvement in the company’s balance sheet remains a near-term priority, Forst cited four transactions in particular: (1) a post closing reconciliation payment of approximately $1 million following a final accounting with the buyer of the company’s commercial airline seating business, sold earlier this year; (2) as announced on October 13, 2000, receipt of certain cash consideration as part of the settlement of litigation with Autoliv Inc.; (3) renegotiation of indebtedness (previously written down to zero) associated with the sale of the company’s rail and mass transit seating business, pursuant to which the company has received $2 million in cash and a new note for $2 million due August 31, 2004 with quarterly interest installments commencing January 1, 2001; (4) the recent extension of a $5 million term note that was due September 30, 2000, with a new maturity date of October 1, 2001.

These transactions have allowed the company to reduce its working capital credit line to zero and additionally to repurchase — for a cash outlay of approximately $1.6 million — approximately $3.4 million (par value) of its publicly traded 8% Senior Subordinated Convertible Notes due May 1, 2004.

“Using cash to repurchase this debt at a discount from par effectively maximized the interest cost reduction achievable under our current capital structure and loan agreements,” said Forst.

The company has also retired approximately $1 million of other indebtedness under term notes.

“Although we do not anticipate fully utilizing our credit facility, having the credit available is an important step in ensuring that we will not face liquidity constraints in the future,” said Forst.

The company said it anticipated that in the ordinary course of business it would use its working capital line for day-to-day operating needs, further debt reduction and budgeted capital expenditures.

“With several options at our disposal, including technology sales and licensing,” concluded Forst, “we will continue to implement a methodical approach to reducing indebtedness and interest expense, with the goal of enhancing profitability and maximizing value for our shareholders.”

Simula, Inc. is a world leader in designing and manufacturing occupant restraint systems and energy absorption devices engineered to safeguard human lives in a wide range of air, ground and sea transportation vehicles. Additional information on Simula may be found at www.simula.com.