ATLANTA, May 14, 2015 /PRNewswire/ -- EarthLink
Holdings Corp. (NASDAQ: ELNK) announced today that it has delivered
a notice of redemption for $70,000,000 aggregate principal amount of its
outstanding 8 7/8% Senior Notes due 2019 (CUSIP No. U2678F AA8)
(the "Notes"). The redemption will occur on June 15, 2015 and holders of the Notes to be
redeemed will receive a redemption price equal to 104.438% of the
principal amount of such Notes, plus accrued and unpaid interest
to, but excluding, the redemption date. To facilitate
the redemption, EarthLink intends to use approximately $20 million of cash and draw down approximately
$55 million under its senior secured
revolving credit facility, leaving approximately $80 million of liquidity available in the
$135 million credit facility. These
new borrowings under the credit facility will have an interest rate
of LIBOR plus 3.50%, which is lower than the interest rate for the
Notes. At current LIBOR rates, EarthLink's annualized debt
service costs following these actions are expected to be more than
$6 million lower than they were at
the beginning of 2015. EarthLink expects to record a loss on
extinguishment of debt of approximately $5.6
million in its second quarter financial results in
connection with the redemption consisting of the premium paid for
the redemption and a non-cash charge for the write-off of
unamortized discount on debt and debt issuance costs. Deutsche Bank
Trust Company Americas, the trustee under the indenture governing
the Notes, is sending a notice of redemption to all currently
registered holders of the Notes.
"EarthLink continues to strengthen its financial foundation,
thanks to the hard work and focus of our team," said Louis Alterman, EarthLink's Chief Financial
Officer. Alterman added, "Our improving cash flow profile
puts us in a position to reduce high-yield debt. This change to our
capital structure will further improve our cash flow profile as we
position the company for growth in the future."
This press release is for informational purposes only and does
not constitute a notice of redemption with respect to or an offer
to purchase or sell (or a solicitation of an offer to purchase or
sell) any securities.
About EarthLink
EarthLink (EarthLink Holdings Corp., NASDAQ: ELNK) provides managed
network, security and cloud solutions for multi-location
businesses. We help thousands of specialty retailers, restaurants,
financial institutions, healthcare providers, professional service
firms and local governments deliver a reliable and engaging
customer experience in their stores and branch offices. We do so by
building and managing MPLS WAN networks, by providing virtualized
infrastructure, security, hosted voice, secure WiFi and compliance
solutions, and by offering exceptional customer care. We operate a
nationwide network spanning more than 28,000 fiber route miles,
with 90 metro fiber rings and secure data centers that provide
ubiquitous data and voice IP service coverage. Our EarthLink
Carrier™ division sells facilities-based wholesale
telecommunications to other providers and our award-winning
Internet services connect hundreds of thousands of residential
customers across the U.S. For more, visit www.earthlink.com and
follow @earthlink, LinkedIn and Google+.
Cautionary Information Regarding Forward-Looking
Statements
This press release includes "forward-looking"
statements (rather than historical facts) that are subject to risks
and uncertainties that could cause actual results to differ
materially from those described. Although we believe that the
expectations expressed in these forward-looking statements are
reasonable, we cannot promise that our expectations will turn out
to be correct. Our actual results could be materially different
from and worse than our expectations. With respect to such
forward-looking statements, we seek the protections afforded by the
Private Securities Litigation Reform Act of 1995. These risks
include, without limitation: (1) that we may not be able to execute
our strategy to successfully transition to a leading managed
network, security and cloud services provider, which could
adversely affect our results of operations and cash flows; (2) that
we may not be able to grow revenues from our growth products and
services to offset declining revenues from our traditional products
and services, which could adversely affect our results of
operations and cash flows; (3) that failure to achieve operating
efficiencies would adversely affect our results of operations and
cash flows; (4) that we may have to undertake further restructuring
plans that would require additional charges; (5) that is we are
unable to adapt to changes in technology and customer demands, we
may not remain competitive, and our revenues and operating results
could suffer; (6) that we may be unable to successfully divest
non-strategic products, which could adversely affect our results of
operations(7) that we may be unable to successfully make or
integrate acquisitions, which could adversely affect our results of
operations; (8) that we face significant competition in the
communications and managed services industry that could reduce our
profitability; (9) that failure to retain existing customers could
adversely affect our results of operations and cash flows; (10)
that decisions by legislative or regulatory authorities, including
the Federal Communications Commission relieving incumbent carriers
of certain regulatory requirements, and possible further
deregulation in the future, may restrict our ability to provide
services and may increase the costs we incur to provide these
services; (11) that if we are unable to interconnect with AT&T,
Verizon and other incumbent carriers on acceptable terms, our
ability to offer competitively priced local telephone services will
be adversely affected; (12) that our operating performance will
suffer if we are not offered competitive rates for the access
services we need to provide our long distance services; (13) that
we may experience reductions in switched access and reciprocal
compensation revenue; (14) that failure to obtain and maintain
necessary permits and rights-of-way could interfere with our
network infrastructure and operations; (15) that we have
substantial business relationships with several large
telecommunications carriers, and some of our customer agreements
may not continue due to financial difficulty, acquisitions,
non-renewal or other factors, which could adversely affect our
wholesale revenue and results of operations; (16) that we obtain a
majority of our network equipment and software from a limited
number of third-party suppliers; (17) that our commercial and
alliance arrangements may not be renewed or may not generate
expected benefits, which could adversely affect our results of
operations; (18) our consumer business is dependent on the
availability of third-party network service providers; (19) that we
face significant competition in the Internet access industry that
could reduce our profitability; (20) that the continued decline of
our consumer access subscribers will adversely affect our results
of operations; (21) that potential regulation of Internet service
providers could adversely affect our operations; (22) that cyber
security breaches could harm our business; (23) that privacy
concerns relating to our business could damage our reputation and
deter current and potential users from using our services; (24)
that interruption or failure of our network, information systems or
other technologies could impair our ability to provide our
services, which could damage our reputation and harm our operating
results; (25) that our business depends on effective business
support systems and processes; (26) that if we, or other industry
participants, are unable to successfully defend against disputes or
legal actions, we could face substantial liabilities or suffer harm
to our financial and operational prospects; (27) that we may be
accused of infringing upon the intellectual property rights of
third parties, which is costly to defend and could limit our
ability to use certain technologies in the future; (28) that we may
not be able to protect our intellectual property; (29) that we may
be unable to hire and retain sufficient qualified personnel, and
the loss of any of our key executive officers could adversely
affect us; (30) that unfavorable general economic conditions could
harm our business; (31) that government regulations could adversely
affect our business or force us to change our business practices;
(32) that our business may suffer if third parties are unable to
provide services or terminate their relationships with us; (33)
that we may be required to recognize impairment charges on our
goodwill and other intangible assets, which would adversely affect
our results of operations and financial position; (34) that we may
have exposure to greater than anticipated tax liabilities and we
may be limited in the use of our net operating losses and certain
other tax attributes in the future; (35) that our indebtedness
could adversely affect our financial health and limit our ability
to react to changes in our business and industry; (36) that we may
require substantial capital to support business growth, and this
capital may not be available to us on acceptable terms, or at all;
(37) that our debt agreements include restrictive covenants, and
failure to comply with these covenants could trigger acceleration
of payment of outstanding indebtedness; (38) that we may reduce, or
cease payment of, quarterly cash dividends; (39) that our stock
price may be volatile; (40) that provisions of our certificate of
incorporation, bylaws and other elements of our capital structure
could limit our share price and delay a change of control of the
company; and (41) that our bylaws designate the Court of Chancery
of the State of Delaware as the
sole and exclusive forum for certain types of actions and
proceedings that may be initiated by our stockholders, which could
limit our stockholders' flexibility in obtaining a judicial forum
for disputes with us or our directors, officers or employees. These
risks and uncertainties, as well as other risks and uncertainties
that could cause our actual results to differ significantly from
management's expectations, are not intended to represent a complete
list of all risks and uncertainties inherent in our business, and
should be read in conjunction with the more detailed cautionary
statements and risk factors included in our Annual Report on
Form 10-K for the year ended December 31, 2014.
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SOURCE EarthLink Holdings Corp.