Avid® (NASDAQ: AVID), a leading technology provider that powers the
media and entertainment industry, announced today that it has
entered into a new five-year $180 million term loan and $70 million
revolving credit facility with JPMorgan Chase Bank, N.A. and a
syndicate of banks. The proceeds from the new term loan, plus
available cash on hand, were used to repay outstanding borrowings
of $201 million under the Company’s existing credit facility with
Cerberus Business Finance, LLC, which was then terminated. The new
revolving credit facility, which was undrawn at closing, can be
used for working capital, other general corporate purposes and for
other permitted uses.
Jeff Rosica, Chief Executive Officer and President, said, “The
continued growth of Avid’s software subscriptions and our improving
business performance and Free Cash Flow profile in recent periods
have enabled us to put in place a cost-effective capital structure.
With the completion of the refinancing, we believe we are well
positioned to execute on our strategy and continue improving our
profitability and Free Cash Flow generation.”
"We are pleased with the successful execution of our new credit
facility," said Ken Gayron, Executive Vice President and Chief
Financial Officer. "We have capitalized on the recent successes in
our business to significantly reduce our cost of debt, further
strengthening our balance sheet, extending our maturities and
providing additional financial flexibility and liquidity. We
experienced very strong demand for this transaction, demonstrating
the confidence that our lenders have in Avid’s current and
long-term outlook. The new facility further improves our capital
structure, building upon the retirement of our convertible notes in
June 2020, and reduces our outstanding debt by $21 million. In
addition, it provides a significant reduction from our prior
interest rate and, with the initial effective interest rate of
3.25%, we expect our annual interest expense to be approximately
$10 million lower in 2021 than in 2020."
The new term loan has an initial interest rate of LIBOR plus an
applicable margin of 3.00%, with a 0.25% LIBOR floor. The
applicable margin on the term loan and the revolving credit
facility ranges from 2.00% to 3.25%, depending on leverage. The
credit agreement contains two financial covenants: (i) a
requirement to maintain a total net leverage ratio, as defined in
the credit agreement, of no more than 4.00 to 1.00 through June 30,
2021, with step downs thereafter, and (ii) a requirement to
maintain a fixed charge covenant ratio, as defined in the credit
agreement, of no less than 1.20 to 1.00. Both the term loan and the
revolving credit facility mature on January 5, 2026.
JPMorgan Chase Bank, N.A., Citizens Bank, N.A., PNC Capital
Markets LLC, Silicon Valley Bank, and Truist Securities, Inc.
served as the Joint Bookrunners and Joint Lead Arrangers for the
new credit facility with JPMorgan Chase Bank, N.A. serving as
Administrative Agent, and Citizens Bank N.A., PNC Bank, National
Association, Silicon Valley Bank, and Truist Bank serving as
Co-Syndication Agents.
Forward-Looking Statements
Certain information provided in this press release includes
forward-looking statements within the meaning of the Securities Act
of 1933 and the Securities Exchange Act of 1934, which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Examples of forward-looking
statements include statements regarding our future financial
performance or position, results of operations, business strategy,
plans and objectives of management for future operations, and other
statements that are not historical fact. You can identify
forward-looking statements by their use of forward-looking words
such as “may”, “will”, “anticipate”, “expect”, “believe”,
“estimate”, “intend”, “plan”, “should”, “seek”, or other comparable
terms.
Readers of this press release should understand that these
forward-looking statements are not guarantees of performance or
results. Forward-looking statements provide our current
expectations and beliefs concerning future events and are subject
to risks, uncertainties, and factors relating to our business and
operations, all of which are difficult to predict and could cause
our actual results to differ materially from the expectations
expressed in or implied by such forward-looking statements.
These risks, uncertainties, and factors include, but are not
limited to: risks related to the impact of the coronavirus
(COVID-19) outbreak on our business, suppliers, consumers,
customers and employees; our liquidity; our ability to execute our
strategic plan including our cost saving strategies, and to meet
customer needs; our ability to retain and hire key personnel; our
ability to produce innovative products in response to changing
market demand, particularly in the media industry; our ability to
successfully accomplish our product development plans; competitive
factors; history of losses; fluctuations in our revenue based on,
among other things, our performance and risks in particular
geographies or markets; our higher indebtedness and ability to
service it and meet the obligations thereunder; restrictions in our
credit facilities; our move to a subscription model and related
effect on our revenues and ability to predict future revenues;
fluctuations in subscription and maintenance renewal rates;
elongated sales cycles; fluctuations in foreign currency exchange
rates; seasonal factors; adverse changes in economic conditions;
variances in our revenue backlog and the realization thereof; risks
related to the availability and prices of raw materials, including
any negative effects caused by inflation, weather conditions, or
health pandemics; disruptions or inefficiencies in our supply chain
and/or operations, including from the COVID-19 outbreak; the costs,
disruption, and diversion of management's attention due to the
COVID-19 outbreak; the possibility of legal proceedings adverse to
our Company; and other risks described in our reports filed from
time to time with the U.S. Securities and Exchange Commission.
Moreover, the business may be adversely affected by future
legislative, regulatory or other changes, including tax law
changes, as well as other economic, business and/or competitive
factors. The risks included above are not exhaustive. We caution
readers not to place undue reliance on any forward-looking
statements includes in this press release which speak only as to
the date of this press release. We undertake no responsibility to
update or revise any forward-looking statements, except as required
by law.
About Avid
Avid delivers the most open and efficient media platform,
connecting content creation with collaboration, asset protection,
distribution, and consumption. Avid’s preeminent customer community
uses Avid’s comprehensive tools and workflow solutions to create,
distribute and monetize the most watched, loved and listened to
media in the world—from prestigious and award-winning feature films
to popular television shows, news programs and televised sporting
events, and celebrated music recordings and live concerts. With the
most flexible deployment and pricing options, Avid’s
industry-leading solutions include Media Composer®, Pro Tools®,
Avid NEXIS®, MediaCentral®, iNEWS®, AirSpeed®, Sibelius®, Avid
VENUE™, Avid FastServe®™, Maestro™, and PlayMaker™. For more
information about Avid solutions and services, visit
www.avid.com, connect with Avid on Facebook, Instagram,
Twitter, YouTube, LinkedIn, or subscribe to Avid Blogs.
© 2021 Avid Technology, Inc. All rights reserved. Avid, the Avid
logo, Avid NEXIS, Avid FastServe, AirSpeed, iNews, Maestro,
MediaCentral, Media Composer, NewsCutter, PlayMaker, Pro Tools,
Avid VENUE, and Sibelius are trademarks or registered trademarks of
Avid Technology, Inc. or its subsidiaries in the United States
and/or other countries. All other trademarks are the property of
their respective owners. Product features, specifications, system
requirements and availability are subject to change without
notice.
Contacts
Investor contact: |
PR contact: |
Whit Rappole |
Jim Sheehan |
Avid |
Avid |
ir@avid.com |
jim.sheehan@avid.com |
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