EXHIBIT 99.1
EMRISE
CORPORATION
NEWS
9485 Haven Avenue Suite 100
Rancho Cucamonga, CA 91730
(909) 987-9220 o (909) 987-5186
www.emrise.com
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FOR IMMEDIATE RELEASE
CONTACT: Rory Mackin
John Donovan Hill & Knowlton
Vice President Finance and Administration (212) 885 -0455
(909) 987-9220 ext. 3201 rory.mackin@hillandknowlton.com
EMRISE CORPORATION SECURES COMMITMENT FOR INTERNATIONAL DEBT FINANCING TOTALING
$23,000,000
RANCHO CUCAMONGA, CALIFORNIA, November 8, 2007 - EMRISE CORPORATION (NYSE ARCA:
ERI), a multi-national manufacturer of defense, aerospace and industrial
electronic devices and communications equipment, today announced that it has
secured a commitment for a three-year international debt facility. The facility
totals $23 million. The commitment provides for a $7 million revolving credit
facility and a $6 million term loan. The revolving credit facility and term loan
will be used primarily for working capital purposes. The commitment also
provides for a separate term acquisition facility in the amount of $10 million
to be available exclusively for purposes of acquisitions.
The $6 million term loan will be funded entirely at closing. Based upon EMRISE's
current asset base, the Company expects approximately $6 million of the $7
million revolving credit facility to be available at closing. The financing
transaction is expected to close on or before December 7, 2007. In connection
with the transaction, EMRISE will retire existing debt totaling approximately $6
million with institutional lenders in the U.S., England, France and Japan.
The interest rate on the revolver is at a variable rate of prime plus 1.25%, for
a current rate of 9.5%, subject to a minimum rate of 9.5%. The interest rate on
the term debt is at a variable rate of prime plus 4.25%, for a current rate of
12.5%, subject to a minimum rate of 12.5%. The term debt and the acquisition
facility require interest only payments in the first year, scheduled principal
plus interest payments in years two and three and a final balloon payment at the
end of year three. In connection with the term debt, EMRISE will issue a seven
year warrant to the lender to purchase 2,909,091 shares of EMRISE restricted
common stock, at an exercise price of $1.10 per share.
Complete details of this debt facility will be filed with the Securities and
Exchange Commission on Form 8K.
-more-
Commenting on the credit facility and refinancing, EMRISE Chairman, President
and CEO, Carmine T. Oliva, stated: "Securing a debt facility of this size and
flexibility is a major strategic achievement for EMRISE. This credit facility is
the foundation for our plans to achieve a highly profitable company with a much
larger revenue base. It improves our cash position and provides us with greatly
improved working capital which is necessary to grow our two primary growth
drivers: "In-flight Entertainment and Communications" products and "Edge Network
Timing and Synchronization" products. Having this additional cash available will
allow us to make better long term decisions and will allow us to focus more on
profitability than on short term cash requirements."
Regarding possible use of the $10 million acquisition line of credit, Mr. Oliva
continued: "When complemented with other possible financing arrangements that
are often available on specific transactions, we believe we could leverage this
acquisition credit facility into a purchase price much higher than $10 million.
We have several acquisition targets under consideration and we are working
intently with our investment bankers, to conclude a transaction. However, we
will not conclude a transaction unless we are confident that we can achieve a
high level of synergy with our current operations and above all, the acquisition
is highly accretive of our earnings. Notwithstanding the high bar we have set
for ourselves regarding potential acquisitions, we are confident that with this
financing in place, we will be able to move quickly on the acquisition front."
In conclusion, Mr. Oliva said: "Given the recent severe constricting of debt
markets, it is especially encouraging that our lender has shown such confidence
in EMRISE by making a facility of this size and flexibility available to us. We
also believe, we can look to our lender to help support our future capital
needs."
ABOUT EMRISE CORPORATION
EMRISE Corporation is a multi-national manufacturer of defense, aerospace and
industrial electronic devices and communications equipment. EMRISE's electronic
devices group, which consists of EMRISE Electronics Corporation and its
international subsidiaries, provides power conversion, RF devices as well as
digital and rotary switches to the North American, European and Asian electronic
market. EMRISE's communications equipment group, consisting of CXR Larus
Corporation and its subsidiary CXR Anderson Jacobson, provides network access
and timing and synchronization products to the North American, European and
Asian communications industry. Founded in 1983, EMRISE operates out of
facilities in the United States, England, France and Japan. As of October 31,
2007, EMRISE had approximately 300 employees in its various subsidiaries and
divisions. Website: www.emrise.com. Listed on NYSE Arca under the ticker symbol:
ERI.
-more-
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
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With the exception of historical information, the matters discussed in this
press release, including without limitation, statements regarding the closing of
the new debt financing, future growth of EMRISE Corporation and possible future
funding, the ability of EMRISE Corporation to become highly profitable or to
achieve a much larger revenue base, the ability to grow EMRISE Corporation's two
primary growth drivers, the ability to make decisions based on profit versus
cash, the ability to leverage the acquisition credit facility for a larger
purchase price, the ability to conclude a transaction that will be either
synergistic or accretive to earnings, the ability to move quickly on
acquisitions and the ability or willingness of the lender to support future
capital needs are forward-looking statements that involve a number of risks and
uncertainties. The actual future results of EMRISE CORPORATION could differ from
those statements. Factors that could cause or contribute to such differences
include, but are not limited to the ability of EMRISE Corporation to
successfully complete the new debt financing, the variability of interest rates
in the future, the ability to make all required interest and principal payments
in the future, the possible dilution now or in the future caused by the issuance
of warrants to purchase restricted common stock, the ability of EMRISE
Corporation to identify acceptable acquisition opportunities and once
identified, the ability to successfully close upon such opportunities, the
willingness of the lender to fund future acquisitions and/or future capital
needs, EMRISE CORPORATION's ability to manufacture products to meet expected
demand and existing and future orders; general market and economic conditions;
changes in technology and governmental regulations and policies, competitive
products and services; unforeseen technical issues and those factors contained
in the "Risk Factors" Section of the Company's Form 10-K for the year ended
December 31, 2006 and other Company filings with the Securities and Exchange
Commission.
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