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Harland Clarke Holdings Corp. Announces Amendment of Senior Secured Credit Facilities

 

 

Harland Clarke Holdings Corp.

 

Harland Clarke Holdings Corp. Announces Amendment of Senior Secured Credit Facilities
 

SAN ANTONIO (July 22, 2014)   Harland Clarke Holdings Corp. (the “Company”) announced today that it plans to enter into an amendment to the credit agreement governing its existing senior secured credit facilities in connection with the payment of a special $200 million dividend to the Company’s indirect parent entity, MacAndrews & Forbes Holdings Inc. (“M&F”).

In connection with the amendment, the Company has provided certain preliminary financial information with respect to the second quarter ended June 30, 2014. For the three months ended June 30, 2014, the Company currently expects to achieve a total adjusted revenue range of $849-$856 million, as compared to $810 million of adjusted revenue on a pro forma basis for the three months ended June 30, 2013. In addition, the Company expects to achieve an adjusted EBITDA range of $176-$180 million for the three months ended June 30, 2014, as compared to adjusted EBITDA of $161 million on a pro forma basis for the three months ended June 30, 2013. The pro forma results for the three months ended June 30, 2013 and ranges for the three months ended June 30, 2014 exclude GlobalScholar and Spectrum K12.

The amendment would, among other things, permit the payment of the special dividend and would be conditioned on, among other customary conditions, the issuance of $200 million in aggregate principal amount of 9.250% senior unsecured notes due 2021 (the “Add-on Notes”). The Add-on Notes will constitute an additional offering of the 9.250% senior unsecured notes of the Company that were previously issued in an aggregate principal amount of $540 million on February 4, 2014. The Company intends to use the net proceeds from the sale of the Add-on Notes, as well as cash on hand, to pay the special dividend.

The Add-on Notes will be guaranteed on a senior unsecured basis by each of our current and future subsidiaries that are guarantors or co-obligors under our senior secured credit facilities, and a number of such subsidiaries also will be co-issuers of the Add-on Notes.

The Add-on Notes and related guarantees have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction, and may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements. This offering will be made only to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons in accordance with Regulation S under the Securities Act.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

This press release includes certain preliminary estimates of the results of operations that we expect to report for our quarter ended June 30, 2014. We have not yet closed our books for our second quarter. Our independent registered accounting firm has not completed its review of our results for our second quarter. Our actual results may differ from these estimates due to the completion of our financial closing procedures, final adjustments and other developments that may arise between now and the time the financial results for our second quarter are finalized. Accordingly, you are advised not to place undue reliance on these preliminary estimates. This press release also includes Adjusted EBITDA and other financial measures not compliant with generally accepted accounting principles in the United States (“GAAP”). The non‐GAAP measures included herein may not be directly comparable to similar measures used by other companies in the Company’s industry, as other companies may define such measures differently. The non‐GAAP measures included herein are not measurements of financial performance under GAAP, and should not be considered as alternatives to, and should only be considered together with, the Company’s financial results in accordance with GAAP. Neither M&F nor the Company consider these non‐GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial results.

About Harland Clarke Holdings Corp.
Harland Clarke Holdings Corp. is comprised of companies focused on optimizing customer relationships through multiple channels. Its major business units, Harland Clarke, Scantron and Valassis, are recognized as leading providers of marketing services, transaction solutions, educations services, and intelligent media delivery that create millions of customer touch points annually for their clients. Harland Clarke Holdings Corp. is a wholly owned subsidiary of MacAndrews & Forbes Holdings Inc. For more information about each company please visit www.harlandclarkeholdings.com.

Contact:
Harland Clarke Holdings Corp.
Peter A. Fera, Jr.
Chief Financial Officer