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Teletouch Enters into New Credit Facility



  Teletouch Enters into New Credit Facility

Business Wire

FORT WORTH, Texas -- February 12, 2013

Teletouch Communications, Inc. (OTCBB: TLLE), a leading U.S. cellular services
provider and consumer electronics distributor, today announced that after
market close on Friday, February 8, 2013, it entered into a new, two-year, $6
million senior secured asset-based revolving credit facility, with a starting
interest rate of 14% per annum (the “Revolver”), such facility also providing
for an additional multiple use, short term loan facility of up to $2 million
per loan for special order inventory purchase transactions (the “Term Loans”)
(together, the “DCP Credit Facility”) with DCP Teletouch Lender, LLC, a
special purpose entity created by New York-based, Downtown Capital Partners,
LLC (the “Lender”). The Revolver contemplates interest rate reductions of 1%
per quarter (to a minimum of no less than 11%) in the event the Company
achieves certain minimum quarterly EBITDA targets. The Term Loans component of
the DCP Loan Facility is designed to satisfy out-of-cycle customer orders to
facilitate inventory purchases at times and prices favorable to the Borrower.
The Term Loans are not a committed credit facility and the financial terms,
including interest rates and fees of each of any such Term Loans will be
determined on a case-by-case basis and remain entirely within the discretion
of the Lender. The DCP Credit Facility may be extended by one additional year
at the Company’s sole election, providing for an up to three year total term.
Teletouch is using the initial funds drawn from the facility to replace and
pay-down its original loans and indebtedness with Thermo Credit LLC (the
“Thermo Facility”); pay closing costs associated with the financing; and, use
the remainder for general corporate and working capital purposes. New York
City-based, Bryant Park Capital, Inc. acted as exclusive financial advisor to
Teletouch for the transaction.

As prior reported, the Thermo Facility was originally set to mature in January
2013. However, at the start of 2012, Thermo Credit informed the Company that
it was not in compliance with its own borrowing base facility with Capital One
Bank, N.A., and could no longer lend additional monies or fulfill any further
revolving credit obligations to the Company. Subsequently, the parties entered
into various negotiations and agreements, whereby the maturity of the Thermo
Facility was reset to August 2012, while the Company worked to replace the
Thermo Facility altogether (see the Company’s related filings on EDGAR for
more complete information). As a party to this new transaction, Thermo and the
Company entered into Amendment No. 6 (to the original Thermo loan agreement),
pursuant to which Teletouch agreed to apply at the closing of the DCP Credit
Facility, $4.0 million from the proceeds of the financing described above,
thereby reducing the current balance on the prior Thermo Facility from $7.148
million to a current new principal balance of $3.148 million, as evidenced by
a new three-year Subordinated Promissory Note (see today’s 8-K filing for
further information).

“Although the process has been extremely challenging, the new $6 million
asset-based revolving loan facility, combined with the potential of the
additional $2 million-per-transaction stand-by term loan facility, positions
the Company well to take advantage of the various components of its emerging
wholesale distribution business,” stated T. A. "Kip" Hyde, Jr., President,
Chief Operating Officer and Director of Teletouch. “Just as important, firmly
resolving the ongoing credit matters with Thermo Credit now allows our
management team to focus on growing the business, especially with the greater
flexibility and additional credit lines that our new lender provides.
Completing this new credit facility was a team effort, and we look forward to
growing the business together.”

EARNINGS CONFERENCE CALL – TODAY @ 4:15 p.m. EST

Investor Dial-In (Toll Free): 866-901-2585 or 404-835-7099

Participants are advised to dial in approximately 10-15 minutes before the
conference call is scheduled to begin. Callers will be asked to provide their
first and last names, email address and company and/or financial institution
name, as applicable. After information is given to the operator, participants
will be placed on music-hold prior to the start of the call, then all added to
the call at start.

About Teletouch Communications

For over 48 years, Teletouch has offered a comprehensive suite of wireless
telecommunications solutions, including cellular, two-way radio, GPS-telemetry
and wireless messaging. Today, Teletouch is a leading Authorized Service
Provider and billing agent of AT&T (NYSE: T) products and services to
consumers, businesses and government agencies, operating a chain of retail and
authorized agent stores in North and Central Texas under its “Hawk
Electronics” brand, in conjunction with its direct sales force, call center
operations and various retail eCommerce websites, including:
www.hawkelectronics.com, www.hawkwireless.com and www.hawkexpress.com.

Through its wholly owned subsidiary, Progressive Concepts, Inc., Teletouch
operates a national distribution business, PCI Wholesale, primarily serving
Tier 1 (AT&T, T-Mobile, Verizon, Sprint) cellular carrier agents, Tier 2, Tier
3 and rural carriers, as well as auto dealers and smaller consumer electronics
retailers, with product sales and support available through
www.pciwholesale.com and www.pcidropship.com, among other B2B oriented
websites.

Teletouch's common stock is traded Over-The-Counter under stock symbol: TLLE.
Additional information about the Teletouch family of companies can be found at
www.teletouch.com.

All statements from Teletouch Communications, Inc. in this news release that
are not based on historical fact are "forward-looking statements" within the
meaning of the PSLRA of 1995 and the provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. While the Company’s management has based any
forward-looking statements contained herein on its current expectations, the
information on which such expectations were based may change. These
forward-looking statements rely on a number of assumptions concerning future
events and are subject to a number of risks, uncertainties, and other factors,
many of which are outside of our control, that could cause actual results to
materially differ from such statements. Such risks, uncertainties, and other
factors include, but are not necessarily limited to, those set forth under the
caption “Risk Factors” in the Company’s most recent Form 10-K and 10-Q
filings, and amendments thereto, as well as other public filings with the SEC
since such date. The Company operates in a rapidly changing and competitive
environment, and new risks may arise. Accordingly, investors should not place
any reliance on forward-looking statements as a prediction of actual results.
The Company disclaims any intention to, and undertakes no obligation to,
update or revise any forward-looking statement.

Contact:

Investors & Analysts Contact:
Teletouch Communications, Inc.
Amy Gossett, 800-232-3888
Investor Relations
investors@teletouch.com
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