Digital River, Inc. (NASDAQ: DRIV), a leading global provider of Commerce-as-a-Service solutions, today announced that the company, in a privately-negotiated transaction, repurchased $150 million in aggregate principal amount of its 2.0% Convertible Senior Notes due 2030 for $153.75 million in cash, excluding accrued interest. Following the closing of this repurchase, approximately $145.75 million in aggregate principal amount of Notes remain outstanding. The company expects to record a one-time pre-tax charge in the first quarter of fiscal 2014 of approximately $5.2 million related to settlement of the Notes and acceleration of the recognition of deferred financing costs associated with the repurchased Notes. Excluding the one-time charge, pre-tax savings related to interest and amortization of deferred financing costs on the repurchased Notes will be approximately $0.3 million and $2.9 million for first quarter 2014 and full year 2014, respectively. “Given the upcoming put date of our Notes and the yield available on short-term investments, we were delighted to take advantage of the opportunity to increase shareholder value through our capital allocation strategy,” said Stefan Schulz, Digital River’s chief financial officer. As a result of the transaction, management has updated the EPS guidance that was previously provided on Feb. 5, 2014, to the following: GAAP EPS guidance:
- First quarter 2014 GAAP EPS, ranging from a net loss of $0.31 to a net loss of $0.25 per share; and
- Full year 2014 GAAP EPS, ranging from a net loss of $0.59 to a net loss of $0.45 per share.
- First quarter 2014 non-GAAP EPS, ranging from $0.08 to $0.12 per diluted share, using a 21 percent tax rate; and
- Full year 2014 non-GAAP EPS, ranging from $0.41 to $0.51 per diluted share, using a 21 percent tax rate.