SOURCE: EVOLVING SYSTEMS

February 26, 2008 06:00 ET

Evolving Systems Completes Debt Refinancing With $10 Million in New Facilities at More Favorable Interest Rates and Covenants

461,758 Shares of Series B Convertible Preferred Stock Converted by Holders to 1,385,274 Shares of Common Stock

ENGLEWOOD, CO--(Marketwire - February 26, 2008) - Evolving Systems, Inc. (NASDAQ: EVOL), a leading provider of software solutions and services to the wireless, wireline and IP carrier market, today announced it has completed a debt refinancing that will lower the Company's average cash interest rate and improve financial flexibility.

The new $10 million financing, which carries more favorable covenants than the prior financing, is comprised of a $4.0 million, two-year term loan bearing a fixed interest rate of 8.25% and a $6.0 million, three-year revolving credit facility bearing interest at Prime plus 0.5%. Both interest rates are lower than the interest rates on the previous loans that were originated in 2005.

The new $4.0 million term loan was used to repay the prior term loan balance of approximately $3.8 million. The new $6.0 million revolving credit facility replaces the prior $4.5 million revolver. The new revolver has no mandatory borrowings, which allows the Company to better manage its interest expense. Cash from the Company's balance sheet was used to repay the outstanding revolver balance of $2.0 million with an additional $1.0 million applied to early repayment on the Company's 14% subordinated notes, which had an accretive balance of approximately $6.1 million, including $1.3 million in accrued interest.

The refinancing will lower the Company's 2008 principal amortization by approximately $200,000. In addition, it will result in interest savings of approximately $200,000 in 2008 and more than $250,000 in 2009. The Company will record a one-time write-off of debt issuance costs associated with the retired senior debt of approximately $300,000.

"This refinancing strengthens our balance sheet and our ability to improve future bottom line results through significant interest savings," said Brian Ervine, chief financial officer. "In addition, it increases our options to selectively pay down our higher interest subordinated debt while at the same time providing us with the necessary capital to fund future growth initiatives."

On February 25, 2008, holders of 461,758 shares of the Company's Series B Convertible Preferred Stock converted their preferred shares into 1,385,274 shares of common stock. This conversion eliminated most of the remaining preferred stock balance and the Company expects to convert to common stock the small remaining preferred stock balance prior to March 31, 2008.

About Evolving Systems

Evolving Systems, Inc. (NASDAQ: EVOL) is a provider of software and services to more than 50 network operators in over 40 countries worldwide. Its portfolio includes market-leading products for Activation, Number Portability, Number Inventory and Mediation. Founded in 1985, the Company has headquarters in Englewood, Colorado, with offices in the United States, United Kingdom, Germany, India and Malaysia. Further information is available on the web at www.evolving.com.

CAUTIONARY STATEMENT

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, based on current expectations, estimates and projections that are subject to risk. Specifically, statements about the Company's expectations for lower interest expense, lower debt amortization and improved financial flexibility, write-off of debt issuance costs, expectations to convert the remaining preferred stock balance to common stock, growth expectations and future profitability are forward-looking statements. These statements are based on our expectations and are naturally subject to uncertainty and changes in circumstances. Readers should not place undue reliance on these forward-looking statements, and the Company may not undertake to update these statements. Actual results could vary materially from these expectations. For a more extensive discussion of Evolving Systems' business, and important factors that could cause actual results to differ materially from those contained in the forward-looking statements, please refer to the Company's Form 10-K filed with the SEC on March 15, 2007, as well as subsequently filed Forms 10-Q, 8-K and press releases.

Contact Information

  • Investor Relations

    Jay Pfeiffer
    Pfeiffer High Investor Relations, Inc.
    303.393.7044
    Email Contact

    Press Relations

    Sarah Hurp
    Marketing Communications Manager
    Evolving Systems
    +44 1225 478060
    Email Contact