NEWS OUT:
December 21, 1998 08:45
National Media Continues Refinancing; Eliminates Long-Term Debt
Company Announces New $20 Million Credit Facility With Foothill Capital Corporation
Dramatic 120 Day Turnaround
LOS ANGELES, Dec. 21 /PRNewswire/ -- National Media Corporation (NYSE: NM) today announced it has repaid the $10 million demand note payable to ValueVision International, Inc. (Nasdaq: VVTV). The repayment of the note, eight million dollars of which came from working capital and two million dollars of which came from the exercise price of the ValueVision warrants, was National Media's only remaining outstanding long-term indebtedness. Accordingly, the Company is now free of any long-term debt. Additionally, the repayment eliminates the potential for ValueVision to convert the note to equity which would have significantly diluted the number of outstanding shares.
National Media also announced that it has secured a new, 3-year $20 million credit facility from Foothill Capital Corporation. The new credit facility bears interest at prime plus one-quarter percent or, at the option of National Media, at LIBOR plus three percent. Foothill Capital Corporation is a subsidiary of Wells Fargo Bank N.A.
The repayment of the ValueVision note and securing of the new credit facility signify a dramatic turnaround, and continues the refinancing of National Media, which commenced on August 11, 1998 with the signing of a letter of intent with an investor group led by Stephen C. Lehman. The $30 million investment included the purchase of $10 million of the Company's Series D Preferred Stock from the original holders and repayment of all of the Company's obligations to its senior lender, with the balance funding the Company's working capital. ValueVision would have been entitled, under the terms of its note, to convert the underlying debt into approximately 9.4 million shares of National Media common stock based on a conversion price of $1.07 per share. The repayment of the note eliminates the possibility of this action.
Stephen C. Lehman, Chairman and Chief Executive Officer, stated, "We are very proud of National Media's continued turnaround and progress made to date. When our investor group first met with the Company, it was saddled with debt and had a market "cap" of under $50 million. After a few short months under the direction of our new management team, we have paid off National Media's long-term debt and the Company today has a current market "cap" of about one- quarter of a billion dollars."
Mr. Lehman continued, "We continue to fulfill our promise to National Media's shareholders that we would expand into E-commerce by leveraging our existing infrastructure rather than incurring additional debt. Moreover, we have repaid the Company's outstanding long-term debt within our scheduled timetable. We continue to target expense reductions as we focus on expanding our revenues in order to return the Company to profitability. I am delighted to note that we are one of the very few companies in the E-commerce and E-tailing universe which has virtually no debt other than trade payables and is closing in on profitability."
Dan Yukelson, Executive Vice President and Chief Financial Officer, said, "Our new $20 million credit facility with Foothill will give us the flexibility to act quickly in maximizing the growth of our infomercial business and E-commerce initiatives."
In an unrelated announcement, the Company disclosed that Stuart D. Buchalter, a member of its Board of Directors, will shortly exercise his vested stock options. Mr. Buchalter stated, "I believe in the vision, direction, and abilities of this management team. Accordingly, I intend to exercise my options not with the intention of immediately selling the stock, but in order to place myself in the same position as other shareholders for whom the Board and the National Media employees work."
Mr. Lehman further stated, "Stuart's action is consistent with the belief of our new management team. We have personally invested more than $5 million in National Media. That investment not only expressed our confidence in the future of National Media, but also aligned the interests of our management team squarely with those of our outside shareholders."
In another announcement, the Company stated that it would be filing with the Securities and Exchange Commission a registration statement for shares of common stock issuable upon conversion of its newly issued Series E Preferred Stock, certain warrants and options issued in connection with the Lehman investment, as well as a registration statement related to shares of common stock issuable upon exercise of options which may be granted pursuant to the Company's Stock Option Plan, all of which have been previously approved by the Company's shareholders.
National Media Corporation is the world's largest publicly held direct response television company and is an innovative leader in the growing world of electronic commerce. The Company broadcasts more than 3,000 half-hours of programming each week, reaches nearly 100 percent of television homes in the United States, and brings its programming to more than 370 million television households in more than 70 countries worldwide.
This press release contains forward-looking statement regarding potential future events and developments affecting the business of the Company. The Company wishes to take advantage of certain "safe harbor" provisions regarding forward-looking statements. Examples of forward-looking statements include, but are not limited to, (i) projections of revenues, income or loss, profitability, earnings or loss per share and other financial indicators, (ii) statements of plans or objectives of the Company's management or Board of Directors and (iii) other statements about the Company or the direct response or e-commerce industries.
The Company's ability to predict projected results or the effect of certain events on the Company's results of operations is inherently uncertain. Therefore the Company wishes to caution each reader of this release to carefully consider certain factors, including competition for customers, media pricing and access, market conditions regarding buyers and sellers of media, the potential effect of litigation involving the Company, the risks of doing business in the U.S. and the international marketplace, issues related to entering new markets, the inherent difficulty in identifying successful products, locating efficient suppliers of such products and bringing such products to market in a timely fashion, the competitive and uncertain nature of the electronic commerce industry, and other factors, each of which could affect the ability of the Company to achieve its projected results and may cause actual results to differ materially from those expressed herein. For a description of additional risks and uncertainties, please refer to the Company's filings with the Securities and Exchange Commission; including the Company's Annual report and Quarterly Reports.
To request previous press releases on National Media Corporation please contact, PR Newswire at (800) 758-5804 Ext. 604644.
SOURCE National Media Corporation
/CONTACT: Bruce D. Goodman of National Media Corporation, 818-461-6510,
bruce.goodman@quantumtv.com/
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