DZS Secures $29.7 Million in Financing
September 13 2023 - 8:00AM
DZS (Nasdaq: DZSI), a global leader of access, optical and
AI-driven cloud software solutions, today announced it has secured
$29.7 million in loans, including a $24.5 million 3-year term loan
with 29% shareholder DASAN Networks, Inc. (DNI). The 3-year $24.5
million term loan with an annual interest rate of 8% complements
approximately $5.2 million of short-term loans with South Korean
bank financial partners. The cash will be used to pay off DZS’
existing term debt facility and line of credit.
“As a major shareholder of DZS since 2016, we are inspired by
the progress the company has made since the Board of Directors
appointed Charlie Vogt as President and CEO of DZS in August 2020,”
said Mr. Min Woo Nam, CEO of DNI. “The company’s committment to
innovation spanning fixed and mobile networks has generated
exciting interest around the world. DNI is encouraged with the
company’s future prospects and remains committed to support DZS.
DNI expects DZS to convert many of the active trials across North
America and EMEA to new customer logo wins in 2023 and 2024 as well
as implementing a disciplined focus on net operating income and
free cashflow.”
“The new financing from DNI will ease our financial covenants,
lower our interest cost basis and, together with the additional
short-term loans secured or in final process, will fully pay off
our existing loans,” said Charlie Vogt, President and CEO.
“Additionally, we plan to put a new ABL debt facility in place to
fuel our growth as we enter 2024. The past three years have been
transformational as we continue to execute a bold vision and
strategy designed to disrupt the status quo within the broadband
access and AI-driven cloud software market. Our mission has been
laser focused on differentiated innovation and expanding our
footprint in North America, EMEA and India. With technology
advancements, the integration of two software acquisitions and IT
systems, as well as the outsourcing of two legacy manufacturing
facilities complete, we expect to lower our quarterly operating
spend by nearly $10 million by the first quarter of 2024 compared
with the first quarter of 2023, specifically, $24 million in Q1
2024 versus $34 million in Q1 2023.”
Mr. Vogt continued, “We recently attended Fiber Connect, one of
North America’s largest broadband conferences, where we showcased
our new ‘Build America, Buy America’ (BABA)- FiberWay turnkey fiber
broadband solution. FiberWay is comprised of our next generation
access and optical edge systems and complemented by our AI-driven
cloud software platform. Customer and prospective customer
engagement meetings at this year’s Fiber Connect represented a 50%
increase compared with our 2022 Fiber Connect conference.”
DZS has been manufacturing broadband access solutions in the
United States for the past two decades. The proposed ‘Buy America’
waiver for the Broadband Equity, Access and Deployment (BEAD)
program announced on August 22, 2023 has clarified the guidelines
for vendors to participate in the $42.5 billion Federal financial
assistance program for broadband infrastructure. Assuming the
current Limited General Applicability Nonavailability Waiver of the
Buy America Domestic Content Procurement Preference as Applied to
Recipients of BEAD Program stands as proposed, DZS is among a short
list of technology suppliers meeting the requirements for Optical
Line Terminals (OLTs), OLT Line Cards and Optical Network Terminals
(ONTs).
Communications service providers can purchase these products
consisting of the environmentally hardened Velocity fiber access
systems and a wide variety of Helix ONTs directly from DZS or its
reseller channel partners today and be compliant with proposed BABA
funding guidelines. The new award-winning Saber 4400 coherent
optical edge platform, designed for last mile aggregation and
middle mile transport is also being manufactured in the United
States. Service providers can easily combine these solutions and
complement them with the DZS industry-leading AI-driven Cloud
software solutions in FiberWay packages optimized for rapid
deployment in unserved or underserved communities.
To learn more about DZS, visit https://www.dzsi.com.
About DZS
DZS Inc. (Nasdaq: DZSI) is a global leader of access,
optical and AI-driven cloud-controlled software defined
solutions.
DZS, the DZS logo, and all DZS product names are trademarks of
DZS Inc. Other brand and product names are trademarks of their
respective holders. Specifications, products, and/or product names
are all subject to change.
This press release contains forward-looking statements regarding
future events and our future results that are subject to the safe
harbors created under the Private Securities Litigation Reform Act
of 1995. These statements reflect the beliefs and assumptions of
the Company’s management as of the date hereof. Words such as
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“forecast,” “goal,” “intend,” “may,” “plan,” “project,” “seek,”
“should,” “target,” “will,” “would,” variations of such words, and
similar expressions are intended to identify forward-looking
statements. Readers are cautioned that these forward-looking
statements are only predictions and are subject to risks,
uncertainties and assumptions that are difficult to predict. The
Company’s actual results could differ materially and adversely from
those expressed in or contemplated by the forward-looking
statements. Factors that could cause actual results to differ
include, but are not limited to, those risk factors contained in
the Company’s SEC filings available at www.sec.gov, including
without limitation, the Company’s annual report on Form 10-K,
quarterly reports on Form 10-Q and subsequent filings. In addition,
additional or unforeseen affects from the COVID-19 pandemic and the
global economic climate may give rise to or amplify many of these
risks. Readers are cautioned not to place undue reliance on any
forward-looking statements, which speak only as of the date on
which they are made. DZS undertakes no obligation to update or
revise any forward-looking statements for any reason.
For further information see: www.DZSi.com.DZS on
Twitter: https://twitter.com/dzs_innovationDZS on
LinkedIn: https://www.linkedin.com/company/DZSi/
Press Inquiries:Kenny Vesey, Thatcher+Co.Phone:
+1.973.518.3644Email: kvesey@thatcherandco.com
Investor Inquiries:Ted Moreau, Vice President, Investor
RelationsEmail: IR@dzsi.com
Press Inquiries:
Kenny Vesey, Thatcher+Co.
Phone: +1.973.518.3644
Email: kvesey@thatcherandco.com
Investor Inquiries:
Ted Moreau, Vice President, Investor Relations
Email: IR@dzsi.com
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