Business Context and Reporting Period
This Form 8-K is a current report filed by Dex Media, Inc. (the "Company") on December 29, 2015. The report discloses two material events: the entry into a Third Amendment to a Forbearance Agreement regarding its credit facilities and the receipt of a delisting notice from The Nasdaq Stock Market LLC. The Company operates in the local media and yellow page directory publishing sector.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, or total debt. However, it confirms the Company is in non-compliance with certain covenants under its senior secured credit facilities and senior subordinated notes. The Company is subject to a Forbearance Agreement with lenders including JPMorgan Chase Bank, N.A., and Deutsche Bank Trust Company Americas.
Material Changes and Events
- Delisting Notice: On December 29, 2015, Nasdaq determined the Company's securities would be delisted from the Nasdaq Global Select Market due to failure to meet the $15 million minimum market value of publicly held shares standard (Listing Rule 5450(b)(3)(C)).
- Trading Suspension: Unless an appeal is requested, trading of the Company's common stock is scheduled to be suspended at the opening of business on January 7, 2016.
- Forbearance Extension: The Company entered into a Third Amendment to its Forbearance Agreement on January 4, 2016, extending the forbearance period from January 4, 2016, to January 18, 2016. This extension is subject to automatic renewal if Sufficient Lenders do not provide written notice of termination by the expiration date.
Outlook, Risks, and Management Commentary
Outlook: The Company currently does not intend to appeal the Nasdaq delisting determination and expects its securities to be quoted on the OTC Bulletin Board or "Pink Sheets" following delisting.
Risks and Contingencies: The filing highlights significant risks including:
- Non-compliance with debt covenants and the risk of termination of the Forbearance Agreement.
- Limited access to capital markets and increased borrowing costs due to a leveraged capital structure.
- Material weaknesses in internal control over financial reporting.
- Declining use of print yellow page directories and reduced advertising spending by clients.
- Uncertainty regarding the long-term viability of the business and the ability to refinance existing indebtedness.
Investor Verification Checklist
- Verify the current status of the Forbearance Agreement and whether the January 18, 2016, expiration date has been extended or terminated.
- Confirm the current trading venue for the Company's stock (OTC Bulletin Board or Pink Sheets) following the Nasdaq delisting.
- Review the most recent 10-K or 10-Q filings for specific financial data regarding debt levels, covenant compliance details, and liquidity positions not included in this 8-K.
- Assess the progress of the Company's business transformation program and its impact on revenue stabilization.
- Monitor for any updates regarding the material weaknesses in internal controls over financial reporting.