Contact Information: Investor Relations Jay Pfeiffer Pfeiffer High Investor Relations, Inc. 303.393.7044 Press Relations Sarah Hurp Marketing Communications Manager Evolving Systems +44 1225 478060
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
| Source: EVOLVING SYSTEMS
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.