SAN DIEGO, July 5, 2007 (PRIME NEWSWIRE) -- WFI (Nasdaq:WFII) today announced that it has sold a $21.6 million note receivable (the "Note") in a transaction arranged by KeyBanc Capital Markets ("KeyBanc"). WFI will receive approximately $19.6 million in net cash proceeds, reflecting a discount from par value of less than five percent and aggregate transaction fees of approximately $1 million, which includes a $750,000 fee to KeyBanc, an affiliate of the Company's lender. The Note is being acquired by a fund affiliated with Silver Point Capital, L.P. The Note was originally received from LCC International as part of WFI's recent divestiture of its U.S. Wireless Engineering business. WFI is not providing any guaranty for LCC's payment obligations. Certain post closing adjustments that, under the terms of the sale of the U.S. Wireless Engineering business were expected to be made to the principal amount of the Note, may instead be made by payments between WFI and LCC International, as applicable.
Including this transaction, WFI will have received to date, approximately $38 million from the sale of its U.S. Wireless Engineering business divested earlier this month. This aggregate amount includes the $19.6 million from the sale of the Note, the initial cash payment from LCC of $17 million, and the collection of approximately $1 million to date in net retained accounts receivables. In addition, in the next few months, WFI expects to receive additional payments from the net retained accounts receivables included as part of the LCC transaction of approximately $6 million. WFI plans to use the proceeds to immediately reduce its debt and position the Company for potential growth opportunities, including opportunistic and strategic acquisitions in the government or security business areas.
"This is obviously an important transaction for WFI," said Eric DeMarco, president and CEO of WFI. "Recently, we have been approached by several nationally-recognized institutions to monetize the LCC Note, and, based on the slight discount to par, we made a strategic decision to take this step to immediately pay down existing bank debt associated with the acquisition of Madison Research Corporation and refine the Company's capital structure. Of potential greater significance, the sale affords WFI the flexibility to quickly execute on any new growth opportunities, including acquisitions, which we believe could be an important competitive differentiator. With the receipt of these funds, WFI can focus on continuing to build a business of designing, building and managing government IT networks, C4ISR systems, and weapon systems maintenance for the federal government, state and local agencies, and other non-DoD businesses."
About WFI
Headquartered in San Diego, CA, WFI is a leading provider of professional services in the areas of defense, technology, security solutions and wireless network deployment. With approximately 2,000 professionals, WFI specializes in IT services, Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR), weapon systems operations and maintenance, security solutions and the deployment and management of 3G, 4G, WiMAX and other wireless broadband communication networks. WFI performs work for a range of federal government agencies, including the U.S. Department of Defense, various state and local agencies, Fortune 1000 enterprise companies and wireless carriers. News and information are available at www.wfinet.com. (code: WFI-mb)
Notice Regarding Forward-Looking Statements
This news release contains certain forward-looking statements including, without limitation, expressed or implied statements concerning the Company's expectations regarding the collection of accounts receivable and future growth opportunities that involve risks and uncertainties. Such statements are only predictions, and the Company's actual results may differ materially. Factors that may cause the Company's results to differ include, but are not limited to: risks associated with collection of accounts receivable; changes in the scope or timing of the Company's projects; changes or cutbacks in spending by the U.S. Department of Defense, which could cause delays or cancellations of key government contracts; slowdowns in telecommunications infrastructure spending in the United States and globally, which could delay network deployment and reduce demand for the Company's services; the timing, rescheduling or cancellation of significant customer contracts and agreements, or consolidation by or the loss of key customers; failure to successfully consummate acquisitions or integrate acquired operations; the rate of adoption of telecom outsourcing by network carriers and equipment suppliers; the rate of growth of adoption of WLAN and wireless security systems by enterprises; and competition in the marketplace which could reduce revenues and profit margins; risks that the stock option review will not be completed in a timely manner; risks that the Company will not be able to file its required reports with the SEC by the deadlines established by the NASDAQ and therefore become subject to delisting; risks that the review and the announcement thereof will cause disruption of the Company's operations and distraction of its management; risks that the review will identify other issues not currently being considered that could delay or alter the results of the review; risks of adverse regulatory action or litigation; risk that the Company's lender will declare a default under the Company's line of credit. The Company undertakes no obligation to update any forward-looking statements. These and other risk factors are more fully discussed in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2006 and in other filings made with the Securities and Exchange Commission.