Ultrak secures new $15 million line of credit
LEWISVILLE, Texas-Ultrak Inc. changed creditors and secured a $15 million line of credit from Frost National Bank.
The funds will be used for day-to-day operations for the manufacturer, including increasing the company's marketing efforts.
"We're trying to bring, rather than huge R & D projects, enhancements to our existing products and ramp up our marketing budget," said David Paul, assistant controller at Ultrak.
The new line of credit is more favorable for the company, said Paul. Ultrak was able to secure credit at a lower rate of interest. The company's previous credit line, held with Bank One of Texas, charged 12 percent, while Frost National is charging prime plus .75 percent.
"It frees up money that would have otherwise gone to interest under our old agreement," said Paul.
Some of the credit line will be used to let its network of dealers know about its new product launches, he said.
The company several months ago launched a series of "Dealer days" where Ultrak hosts groups of 25 dealers at its headquarters here for two days of training and product demonstrations.
Three of these sessions have been held in the last year, Paul said; the company plans to do four or five similar sessions in a year.
Another windfall for the company also comes in the form of a $6.5 million tax refund the company received in April. The refund, combined with other steps the company has made over the past several months, such as reducing inventory, improving its collection of accounts receivable, and selling off certain assets, has allowed it to pay off most of its bank debt. It is also enabling the company to restructure its operations to improve its gross profit margins.