Telxon Announces Plans to Manage its Cisco Systems Holdings
CINCINNATI, March 23 /PRNewswire/ -- Telxon Corporation (Nasdaq: TLXN), a
world leader in delivering quality, innovative solutions for mobile
information and wireless communications systems, announced today its near-term
plans related to the management of the shares of Cisco Systems (Nasdaq: CSCO)
it received in exchange for its holdings in Aironet Wireless Communications,
Inc., as the result of the recently completed merger between Cisco and
Aironet.
Woody M. McGee, Telxon's vice president and CFO, said, "After reviewing a
number of options available to us, we decided to liquidate a portion of our
Cisco holdings sufficient to enable us to eliminate our existing bank debt,
finish bringing our accounts payable to within standard terms, pay any taxes
associated with the Cisco/Aironet transaction and establish cash reserves to
meet the future working capital requirements of our business. In addition, we
have entered into an investment management technique called a collar, arranged
by Deutsche Banc Alex.Brown, to manage the risk and tax exposure associated
with our retained Cisco holdings."
In connection with the collar, Telxon also announced today that it has
entered into an agreement, arranged through Deutsche Banc Alex.Brown, to
provide the company with an open line of credit exceeding $235 million based
on its Cisco holdings. The line of credit, which carries a borrowing rate of
Libor plus thirty basis points, has no fees associated with it.
McGee concluded, "As we previously stated, we are excited about the
prospect of eliminating our existing bank debt and the associated costs. We
expect to save approximately $14.5 million annually by reducing our interest
charges and bank fees and eliminating royalty payments to Aironet. These cost
savings, coupled with the company's enhanced liquidity, provide us a great
deal of financial flexibility to continue fine-tuning our business operations.
We now have the latitude to fully implement our strategic plan to position
Telxon for growth on a global basis and return the company to profitability."
Telxon Corporation is a leading global designer and manufacturer of
wireless networks for mobile computing solutions and information systems. The
company integrates advanced mobile computing and wireless data communication
technology with a wide array of peripherals, application-specific software and
global customer services for its customers in more than 60 countries around
the world. Telxon's global web site address is: www.telxon.com .
Other than the historical events reported above, this news release
constitutes forward-looking statements that are inherently subject to risks
and uncertainties which could cause Telxon's actual or restated results or
other future events pertaining to the company to differ materially from the
forward-looking statements. The important factors affecting the realization
of those results or the occurrence of those events include, without
limitation, the company's ability to gain and maintain market acceptance of
its products, the levels of customer acceptance of and demand for those
products, the ability of the company's executive management to successfully
structure, staff and deploy its sales, administrative, manufacturing and other
operations to cost-effectively address the needs of existing and prospective
customers, and the continued adequacy of the company's internal and external
sources of working capital, as well as general and industry-specific economic
conditions, competitive pressures and rapid technological change. Reference
should be made to the discussion of these and other factors affecting Telxon's
business and results as included from time to time in the company's filings
with the Securities and Exchange Commission.
SOURCE Telxon Corporation
-0- 03/23/2000
/CONTACT: Alex L. Csiszar, VP, Investor and Public Relations of Telxon
Corporation, 330-664-2961, or 800-800-8001, or investor@telxon.com/
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 847150/
/Web site: telxon.com
(TLXN CSCO)
CO: Telxon Corporation; Cisco Systems; Aironet Wireless Communications, Inc.
ST: Ohio
IN: CPR
SU:
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