Southwall Technologies Secures New Bank Loan and Equity Financing Agreement Led by Needham & Company

Southwall Technologies Inc. (Nasdaq:SWTX), a global developer, manufacturer and marketer of thin-film coatings for the electronic display, automotive glass and architectural markets, today announced that on Dec. 18, 2003, it secured an agreement for a new bank loan guarantee and equity financing package of up to $7.5 million from Needham & Company, Inc., its affiliates and Dolphin Asset Management.

"As noted in our news release on third-quarter 2003 results, we recognize the urgent need to reduce our spending and raise additional cash," said Thomas G. Hood, Southwall's president and chief executive officer. "We believe that this agreement, led by Needham, in conjunction with significant internal changes already in progress, will enable Southwall to achieve quarterly cash break-even in 2004 and begin generating positive cash flow from operations as soon as possible after that. We expect that the Needham led financing will give us the additional time we need to achieve production qualification for the exciting design-ins we have been actively working in the electronic display market."

If all of the transactions contemplated by the agreement between Southwall and the Needham led group are completed, Southwall will receive up to $3,000,000 in new borrowings from Pacific Business Funding(1) (which are to be guaranteed by Needham) and up to $4,500,000 in cash in exchange for 4,500,000 shares of a newly issued convertible preferred stock. As part of the guarantee and equity purchases, if any, the investors will also receive warrants to purchase common stock. If Needham and its affiliated entities were to exercise all such warrants and convert all such shares of preferred stock, while maintaining its current position of approximately 1,481,000 shares of common stock, then the firm and its affiliated entities would own approximately 6,865,000 shares of Southwall common stock, or about 31% of the total shares outstanding. Dolphin currently does not own any shares of common stock but upon exercise of its warrants would own approximately 2,692,000 shares of Southwall common stock, or about 12% of the total shares outstanding.

Under the terms of the agreement, Needham will issue the guarantees of Southwall's bank line of credit facility in two separate pieces of $2.25 million and $750,000, respectively, and Needham and Dolphin will purchase the equity in two separate tranches of $1.5 million and $3.0 million, respectively, following the extensions of credit under the new facility. The new borrowings and the purchase of each equity tranche would be subject to Southwall's satisfaction, in Needham's reasonable discretion, of certain conditions. These conditions would include, among other things, the receipt of concessions from creditors and landlords, completion of certain restructuring actions and the achievement of cash flow break-even at quarterly revenue levels below those of third quarter 2003. There is no assurance, however, that any of these conditions will be satisfied.

The board has appointed George Boyadjieff to succeed Joseph B. Reagan as Southwall chairman effective on Dec. 18, 2003. Dr. Reagan will remain on the board. Mr. Boyadjieff is the chairman emeritus and recently retired chief executive officer of Varco International, Inc. (NYSE:VRC), a diversified oilfield equipment manufacturer and service provider with over $1.3 billion in fiscal 2002 revenues.

For a complete description of the Needham bank guarantee and equity financing package, please refer to Southwall's Form 8-K, to be filed with the Securities and Exchange Commission on or about Dec. 22, 2003, which will include as exhibits the investment agreement and loan documents. The descriptions of those documents in this press release are qualified in their entirety by reference to the actual documents.

600450 Southwall Technologies Secures New Bank Loan and Equity Financing Agreement Led by Needham & Company
Date: 6 January 2004

See more news about:

Others also read

Local quality glass producer Emirates Glass Limited has won contracts to supply 68,000 square metres of its high quality EmiCool glass to five major projects in Dubai.
When did the wine industry start using glass bottles, and how did they settle on their current size of 750ml? For the answer to these questions, you have to go back in time - back thousands of years to when wine was first cultivated and enjoyed.
KUB Malaysia Bhd has accepted an offer from Nippon Sheet Glass Co Ltd (NSG) to acquire its 15% stake in Malaysian Sheet Glass Bhd (MSG) for RM32.6 million in cash, or RM2.68 per share.
China's largest automobile glass maker Fuyao Glass Industry Group Co, Ltd, won its case against the dumping ruling of the US Department of Commerce (DOC).
Co-Ventures in Glass Containers (CVIGC, Ltd.) of Tampa, Florida, USA and Micro-Tek Canada, Inc. Of Toronto, Canada are excited to announce the beginning of a long term joint venture to combine their extensive experiences and resources to offer the Glass Container Industry globally a best value alternative for all their outsourcing needs in manufacturing, operations and technical assistance agreements, specifically targeted to the smaller manufacturers who have found the larger service companies to be cost and profit prohibitive.The principals of the two companies have found a global need for smaller glass companies who require excellent technical resources to properly compete within the industry without the high costs of employing their own staffs or outsourcing their requirements to the larger service companies whose own operating costs and overhead are substantial.
Praxair, Inc. (NYSE: PX) today announced that its subsidiary Praxair Canada Inc.'s specialty gases plant in Paris, Ontario, Canada, is one of Praxair's first specialty gases plants in North America to complete the upgrade to ISO 9001:2000, the latest ISO 9000 standard for quality.

Add new comment