Attached files
| file | filename |
|---|---|
| 8-K - FORM 8K - Network Communications, Inc. | form8k.htm |
| EX-10.29 - FORBEARANCE AGREEMENT - Network Communications, Inc. | ex10.htm |
FOR
IMMEDIATE RELEASE
June
3, 2010
NETWORK
COMMUNICATIONS, INC. (NCI) ENTERS INTO RESTRUCTURING DISCUSSIONS WITH DEBT
HOLDERS
Company
elects not to make bond interest payment,
negotiates
agreement with its lenders for continued
Use
of cash as discussions continue
Lawrenceville,
GA, June 3, 2010 – Network Communications, Inc. (the “Company” or “NCI”), a
leading local media company serving the housing market, announced today that it
is actively working with its stakeholders to restructure its balance
sheet.
The
Company elected not to make the June 1 interest payment on its 10¾% Senior Notes
due 2013 as negotiations with stakeholders continue. As a result of
missing this payment, the Company’s senior secured lenders accelerated all
amounts outstanding under the Company’s revolving and term loan credit
agreements, which in turn triggered an event of default under the Senior Notes
indenture. The Company obtained an agreement from its secured lenders
permitting it to have continued access to and use of its cash as restructuring
negotiations progress. The Company expects to have sufficient cash on
hand to fund normal course operations through this process.
“Over the
past 24 months, our business performance at NCI has been negatively affected by
the ongoing slump in the housing market and the economy in
general. Our Company continues to maintain historically strong
operating margins and cash flow generation, leading positions in many of our
markets and promising new and innovative products,” said Chairman & CEO Dan
McCarthy. “Unfortunately, the decline in operations has left us with
more debt than we can reasonably service in the current business
climate. The Board of Directors is supportive of a comprehensive
balance sheet restructuring to address this issue and put the Company in a
position to be able to take advantage of business opportunities that we believe
lie ahead.”
NCI
expects to maintain current staffing levels during the restructuring process and
intends to fund its ongoing business with cash on hand and cash from continuing
operations. The Company has engaged Kirkland & Ellis LLP as legal
advisor and Houlihan Lokey as financial advisor to assist the Company with its
restructuring. “We look forward to continuing our discussions with
our stakeholders to achieve a successful balance sheet restructuring, which, if
consummated, will position the Company for future growth," said
McCarthy.
About
Network Communications, Inc.
Network
Communications, Inc. is a leading local media company providing lead generation,
advertising and internet marketing services to the housing industry. The
company's leading brands are Apartment Finder, The Real Estate Book, DigitalSherpa, Unique Homes, New England Home and Atlanta Homes &
Lifestyles. NCI has market representation in more than
500 local markets around the United States. The company’s strategy
focuses on providing high-quality and measurable marketing solutions to local
clients by leveraging its proprietary prospect-focused distribution and content
management infrastructure. NCI distributes more than 9.4 million local
print catalogs of apartments for rent and homes for sale every month through
more than 300,000 distribution points; NCI’s websites are leading Internet
destinations for consumers looking for homes to rent or buy, with an average of
2.0 million unique users every month; and it provides internet marketing
services using social media tools to its customers.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS:
Statements
in this release and any exhibits hereto which are not purely historical facts,
including statements about forecasted financial projections or other statements
about anticipations, beliefs, expectations, hopes, intentions or strategies for
the future, may be forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Readers are cautioned not to place undue
reliance on forward-looking statements. All forward-looking statements are based
upon information available to the Company on the date this release was
submitted. The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. Any forward-looking statements involve risks and
uncertainties that could cause actual events or results to differ materially
from the events or results described in the forward-looking statements,
including, but not limited to, risks and uncertainties related
to: the Company’s revenue being dependent on the residential market
for existing and new home sales; significant increases in paper, ink, printing
plates or fuel costs; and other changes or events which impact the residential
and commercial real estate markets or alter the manner in which
consumers access housing related information; the availability and access, in
general, of funds to meet interest payment obligations under our debt and to
fund our operations and necessary capital expenditures, either through cash on
hand, cash flows from operating activities, further borrowings or other sources;
our ability to comply with all covenants in our indenture and credit facility,
any violation of which, if not cured in a timely manner, could trigger a default
of our other obligations under cross-default provisions; our ability to repay
debt prior to or when it becomes due and/or successfully access the capital or
credit markets to refinance that debt through new issuances, exchange offers or
otherwise, including restructuring our balance sheet and leverage position; and
the outcome of our discussions with our bank group. More information
on potential risks and uncertainties is available in the Company’s recent
Quarterly Reports on Form 10-Q and Annual Report on Form 10-K for the year ended
March 29, 2009 (SEC File No. 333-134701).
CONTACTS:
Gerard
Parker, CFO, NCI, 770-962-7220 ext 24234, e-mail: gparker@nci.com;
Tami
McCarthy, TMG Public Relations, 212-300-6430, e-mail:
tami@tmgpr.com