SFCC Sfbc (MM)

SFBC International, Inc. (NASDAQ:SFCC), a provider of drug development services to branded pharmaceutical, biotechnology and generic drug companies, today announced that it has entered into an agreement with its lenders, which waives all of the Company's defaults related to covenants and certain other terms under its existing Senior Secured Credit Facility ("Credit Facility"). SFBC obtained waivers for these defaults to facilitate the timely filing of the Company's Form 10-K for the period ended December 31, 2005 within the extended deadline of March 31, 2006. Following the filing of its Form 10-K, SFBC expects to continue discussions with its lenders to amend the terms of the Credit Facility to match the Company's current forecasts, growth strategy and capital requirements. Until the Credit Facility is amended, SFBC has agreed with its lenders not to draw down any additional funds from its Credit Facility. As of December 31, 2005 and March 29, 2006, SFBC had $17 million drawn upon this $90 million Credit Facility. As of March 21, 2006, SFBC had approximately $44 million in cash, cash equivalents and marketable securities. Jeffrey P. McMullen, chief executive officer of SFBC International, stated, "Based on our current business outlook, we anticipate that we will generate significant cash flow from operations in 2006 and that we have adequate liquidity to fund our working capital requirements while we amend the Credit Facility. With our cash position and outlook for positive cash flow from operations in 2006, we determined the best course of action was to obtain waivers from our lenders, allowing additional time to negotiate Credit Facility covenants and terms, which more appropriately match our current business objectives. We intend to continue taking appropriate actions to preserve and enhance long-term shareholder value and maintain flexibility." The covenant defaults and the waiver of the covenant defaults for the Credit Facility do not have an effect on the Company's agreement with holders of its 2.25% Convertible Senior Notes, due 2024. About SFBC International, Inc. SFBC International, Inc. is an international drug development services company offering a comprehensive range of clinical development, clinical and bioanalytical laboratory, and consulting services to the branded pharmaceutical, biotechnology and generic drug industries. SFBC has more than 35 offices, facilities and laboratories with approximately 2,500 employees strategically located throughout the world. For more information, visit SFBC's website at http://www.sfbci.com. Forward-Looking Statements The statements made in this press release relating to amending the Credit Facility and 2006 cash flow are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Additionally, words such as "seek," "intend," "believe," "plan," "estimate," "expect," "anticipate" and other similar expressions are forward-looking statements within the meaning of the Act. Some or all of the results anticipated by these forward-looking statements may not occur. Factors that could cause or contribute to such differences include, but are not limited to, whether adverse publicity relating to SFBC's Miami operations causes clients to select competitors, not only for early stage branded clinical trials but also for other aspects of SFBC's business; SFBC's ability to resolve open issues relating to its Miami property including remediation costs, whether a building permit will be issued, whether it can complete its remediation plan on a timely basis and within reasonable cost parameters, whether SFBC will prevail in the pending land lease litigation and whether, depending on the outcome of these issues, it will relocate or close its Miami facility; continued adverse publicity related to actions of the United States Senate Finance Committee; developments with respect to the SEC's inquiry; SFBC's ability to successfully achieve and manage the technical requirements of specialized clinical trial services, while complying with applicable rules and regulations; the Miami subsidiary's continued ability to recruit participants for clinical trials; regulatory changes; changes affecting the clinical research industry; a reduction of outsourcing by pharmaceutical and biotechnology companies; SFBC's ability to compete internationally in attracting clients in order to develop additional business; cancellation of contracts; SFBC's ability to retain and recruit new employees; SFBC's clients' ability to provide the drugs and medical devices used in its clinical trials; the willingness of SFBC's lenders to agree to covenant and other changes to the Credit Facility; SFBC's ability to sell its land in Quebec City, Canada to investors who will finance the construction of SFBC's new Canadian headquarters for Anapharm Inc. and lease the completed facility back to SFBC; and the national and international economic climate as it affects drug development operations. Further information can be found in SFBC's risk factors contained in the Form S-3 filed with the SEC in 2005 and other filings with the Securities and Exchange Commission.