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LodgeNet Presents at B. Riley & Co. 8th Annual Las Vegas Investor Conference
14 March 2007 LodgeNet Entertainment Corporation (Nasdaq: LNET), a world leader in interactive TV and broadband solutions to hotels and healthcare facilities, presented today at the B. Riley & Co. 8th Annual Las Vegas Investor Conference. LodgeNet President & CEO Scott C. Petersen reported on progress regarding several strategic initiatives underway by the Company.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000310/LODGELOGO )
"Our acquisition of StayOnline was successfully closed in early February," said Petersen. "The acquisition is an important step forward in the execution of our corporate strategy to expand our networks and integrate high value solutions for our customers. While we are working through various operational integration matters, we are already seeing considerable market recognition of the unique benefits we bring the industry through an integrated interactive television and broadband solution. For 2007, we are looking for our new HSIA business to generate approximately $15 million in revenue at a neutral to slightly positive Adjusted Operating Cash Flow level."
Petersen continued, "We remain enthusiastic about our pending acquisition of On Command. The acquisition will expand our interactive television network to 1.8 million rooms and enhance our ability to deliver a superior array of new products and services that will benefit both the hotel industry as well as our company. During the Hart-Scott-Rodino approval period, we have been able to do some limited integration planning. We continue to believe that we can generate at least 10% to 12% operating costs synergies, which translates into $12.5 million to $15.0 million of operating cost savings from the combination." Mr. Petersen also indicated that the transaction is currently pending HSR approval. A determination by the Department of Justice of whether to clear the transaction or request additional information is expected by March 15, and the Company will release additional information as it becomes available.
Petersen also noted that the syndication of a $450 million senior secured credit facility, led by Bear, Stearns & Co. Inc. and Credit Suisse Securities (USA) LLC was commenced during the first week of March. $75.0 million of the new facility will refinance the Company's existing senior secured credit facility, which matures in 2008; $325 million of the facility will be available to fund the cash portion of the On Command acquisition price; and $50 million will be structured as a revolving credit facility.
Petersen also reported that the Company is continuing to make solid progress leveraging LodgeNet's interactive television platform into the healthcare market as more hospitals look to provide patients with a hotel-like experience. "We are pleased to announce that four new hospitals will be installed by the end of the first quarter. Those hospitals include Cypress Fairbanks Medical Center in Houston, Texas, Baylor Heart Hospital in Dallas, Houston Northwest Medical Center and Lancaster General Hospital in Lancaster, Pennsylvania." As with the Company's other healthcare clients, the hospitals are purchasing the LodgeNetRX(TM) Interactive Patient Television System, licensing its software, and contracting with LodgeNet for a variety of patient education, entertainment and other interactive patient services. Petersen said that healthcare revenue is expected to more than double in 2007 to between $5 and $6 million.
The Company has posted a copy of the B. Riley conference presentation on its website at: http://www.lodgenet.com .
About LodgeNet
LodgeNet Entertainment Corporation ( http://www.lodgenet.com ) is a world leader in interactive TV and broadband solutions to hotels throughout the United States and Canada as well as select international markets. These services include on-demand movies, on-demand games, music and music videos, subscription sports programming and television on-demand programming, as well as high-speed Internet access, all designed to serve the needs of the lodging industry and the traveling public. LodgeNet provides service to more than one million interactive hotel rooms representing more than 6,000 hotel properties worldwide. In addition, LodgeNet is a leading innovator in the delivery of on-demand patient education, information and entertainment to healthcare facilities. LodgeNet is listed on NASDAQ and trades under the symbol LNET.
Forward-looking statement
Certain statements in this press release constitute "forward-looking statements". When used in this press release, the words "intends," "expects," "anticipates," "estimates," "believes," "goal," "no assurance" and similar expressions, and statements which are made in the future tense or refer to future events or developments, including, without limitation, those related to estimated free cash flow, cash earnings per share, debt ratios and synergies, are intended to identify such forward-looking statements. Such forward- looking statements are subject to risks, uncertainties, and other factors that could cause the actual results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. In addition to the risks and uncertainties discussed herein, such factors include, among others, the following: the effects of economic conditions, including in particular the economic condition of the lodging industry, which can be particularly affected by international crisis, acts or threats of terrorism and public health issues; competition from providers of similar services and from alternative systems for accessing in-room entertainment; competition from HSIA providers; changes in demand for our products and services; programming costs, availability, timeliness, and quality; technological developments by competitors; developmental costs, difficulties, and delays; relationships with clients and property owners; the availability of capital to finance growth, and, in particular, the success of the $450 million syndication on terms favorable to LodgeNet; the impact of government regulations; potential effects of litigation; risks of expansion into new markets; risks related to the security of our data systems; and other factors detailed, from time to time, in our filings with the Securities and Exchange Commission. With respect to any proposed acquisition, we are subject to risks that integration costs will exceed expectations, that synergies we anticipate will not be realized, or will take longer than anticipated to realize, that our management and management systems will encounter difficulties in dealing with a bigger, more diversified enterprise, and that the financial results we expect from the acquisition will not be realized. These forward-looking statements speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward- looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Source: prnewswire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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