Muzak working to address $437 million of first-quarter 2009 maturities

By Jennifer Lanning Drey

Portland, Ore., Nov. 14 - Muzak Holdings LLC is actively pursuing plans to address $437 million of debt scheduled to mature in the first quarter of 2009, Steve Villa, chief executive officer of Muzak, said Friday during the company's third-quarter earnings conference call.

The company said it also continues to work to complete its proposed merger with DMX Inc., which calls for a third-party buyer that has yet to be found.

"While we remain active in this merger and sale process, we are also taking steps to be in the best position to address our current capital structure," Villa said.

In its earnings release, Muzak noted that the current state of the debt and equity markets may present challenges for any proposed consolidation, combination, refinancing or restructuring.

During the call, which did not include a question-and-answer session, the CEO said he was unable to provide further details on the company's plans to address the maturities.

The first-quarter maturities include $220 million of 10% senior notes due Feb. 15 and $115 million of senior subordinated notes due March 15. Muzak's term loan also matures on Jan. 19, according to its 10-Q filed for with the Securities and Exchange Commission for the third quarter.

The company's cash balance at the end of the third quarter was $27.1 million, while total debt was $462 million.

Muzak posted third-quarter EBITDA of $15.9 million, representing an 8.2% decrease from the $17.3 million of EBITDA posted for the same period in 2007. Revenues were $61.8 million for the third quarter, compared with $62.1 million for the same period in 2007.

Muzak is a Fort Mill, S.C., recorded music company.

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