LodgeNet posts $103.8 million 2012 operating loss; eyes March exit

By Caroline Salls

Pittsburgh, March 26 - LodgeNet Interactive Corp. reported a $103.8 million operating loss for the year ended Dec. 31 on $364.69 million in revenue, according to a 10-K filed Tuesday with the Securities and Exchange Commission.

In comparison, the company posted $28.46 million of operating income for 2011 on $421.26 million in revenue.

The net loss for 2012 was $134.29 million, widening significantly from a $631,000 net loss in 2011.

LodgeNet had $15.37 million in cash and cash equivalents at Dec. 31, up from $14.02 million at Dec. 31, 2011.

Emergence timing

According to the 10-K, the company expects all of the conditions to effectiveness of its plan of reorganization to be completed by the end of March.

The plan was confirmed on March 7 by the U.S. Bankruptcy Court for the Southern District of New York.

A syndicate of investors led by Colony Capital, LLC has agreed to provide $60 million of new capital in exchange for 100% of the reorganized company's common stock.

Under the plan, the holders of LodgeNet's secured debt will receive an amended and restated credit agreement providing a new five-year term loan for the existing $346.4 million secured credit facility, plus the amount of unpaid interest accrued before bankruptcy and post-bankruptcy through the earlier of the closing date and 90 days after the bankruptcy filing date. The interest will be paid at the non-default rate.

Interest on the new credit agreement will be 6¾%. Principal payments are expected to be 1% each year, payable in equal quarterly installments.

Exit financing

In addition the company said it will enter into an up to $20 million 4.5-year revolving credit exit facility, including a $5 million sublimit for letters of credit.

LodgeNet said revolver advances will be limited to the lesser of the sum of up to 85% of eligible accounts receivable, plus an amount equal to the lesser of $5 million and 75% of the appraised fair market value of the company's eligible owned real estate; or $20 million, minus reserves the lender may establish in good faith.

Interest on the revolver will be either Base rate plus 125 basis points or one-month, two-month or three-month Libor plus 225 bps, at the company's option.

LodgeNet is a Sioux Falls, S.D.-based provider of interactive media and connectivity services to hospitality and health care businesses. The company filed for bankruptcy on Jan. 27 under Chapter 11 case number 13-10238.

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