Muzak Announces Fiscal Year 2008 Financial Highlights

Muzak Announces Fiscal Year 2008 Financial Highlights

Company is Making Important Operational Progress and Maintaining Outstanding Service Levels

FORT MILL, S.C., May 4 /PRNewswire/ -- Muzak Holdings LLC ("Muzak" or the "Company"), a leading provider of business music services in the United States, today announced financial highlights for the fiscal year ended December 31, 2008.

   --  Total revenue for the twelve months ended December 31, 2008 was $248.9       million, a 0.5% decrease, compared to $250.2 million for the twelve       months ended December 31, 2007.  The 2008 total revenue of $248.9       million is slightly higher than $248.6 million recorded for the twelve       months ended December 31, 2006.     --  EBITDA was $65.0 million for the twelve months ended December 31,       2008, a decrease of $3.7 million, or 5.3%, as compared to $68.7       million in the twelve months ended December 31, 2007, and a 1.4%       increase as compared to the twelve months ended December 31, 2006.        The company's EBITDA in fiscal years 2007 and 2008 excludes       non-recurring expenses directly associated with a proposed merger       transaction/financial restructuring of approximately $2.4 million and       $4.0 million, respectively.   

"When Muzak commenced its chapter 11 case on February 10, 2009, we announced our commitment to maintaining normal operations, further reducing costs, and improving on our already high service levels," said Stephen P. Villa, Chief Executive Officer of Muzak. "I am proud of Muzak for achieving these objectives, and our ability to continue to fund our business with cash on hand and cash generated by our operations. We believe that we are taking the right steps to position the company for long-term success."

Mr. Villa added, "Our continued focus on delivering quality products and service has helped us further solidify key relationships, and resulted in the signing of many new clients. We continue to launch new programs for the benefit of our clients, which demonstrates our commitment to grow the business and expand our offerings. The launch of Visual Solutions, our comprehensive digital signage product line, has been well received by our client base and the marketplace. Muzak is looking forward to a successful 2009, our 75th year in operation."

Cash on hand has increased since the Chapter 11 case was commenced, and as of April 30, 2009, Muzak had a balance in excess of $35 million. The Company continues to believe that this amount will be sufficient to support the business.

Going forward, the Company does not intend to announce its quarterly or full year earnings results.

About Muzak

Muzak creates sensory experiences that reach more than 100 million people daily. Some of the largest brands in business trust Muzak to enhance their brand image. Muzak creates an endless variety of music programming from a catalogue of over 2.6 million songs and produces targeted custom in-store and on-hold messaging. Through its national service and support network, Muzak designs and installs professional sound systems, digital signage, drive-thru systems, commercial television and more. For more information, visit www.muzak.com.

Non-GAAP Measures

In addition to the results presented in accordance with Generally Accepted Accounting Principles (GAAP) throughout this press release, the company has presented non-GAAP financial measures, such as EBITDA. EBITDA is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, net income as a measure of performance, as determined in accordance with generally accepted accounting principles, known as GAAP. The company believes these non-GAAP measures, viewed in addition to but not in lieu of its reported GAAP results, provide useful information to investors because they are an integral part of its internal evaluation of operating performance. In addition, they are measures that the company uses to evaluate management's effectiveness. Muzak's non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies.

Forward-Looking Statements

Certain statements contained in this release include what are commonly referred to as forward-looking statements. Some of these statements can be identified by terms and phrases such as "anticipate", "believe", "intend", "expect", "could", "may", "will" and similar expressions, may include references to assumptions that we believe are reasonable, and relate to our future prospects, developments and business strategies.

Forward-looking statements involve risks and uncertainties, including, but not limited to those related to our substantial leverage and debt service requirements, which began to mature in the First Quarter of our restructuring efforts, the current state of the financial markets, restrictions imposed by the terms of our indebtedness, our history of net losses, our lack of readily available funds to borrow, our dependence on satellite delivery of our products, our dependence on third parties to license music rights, possible disruption posed by new business strategies and initiatives, the impact of natural disasters on our client locations and our support facilities, future capital requirements, the impact of competition and technological change, the availability of cost-effective programming, the impact of legislation and regulation, our dependence on the contributions of key personnel, the ability to control or impact client cancellations specifically in light of the pending debt maturities, potential conflicts posed by the significant ownership stake of our controlling equity holder, risks associated with the effect of general economic conditions and other factors discussed in our filings, reports, and public disclosures.

You must remember that our expectations may not turn out to be correct, even though we believe they are reasonable. In light of the foregoing risks and uncertainties as well as those that have yet to be identified, we cannot and do not guarantee that any future transactions or events will happen as described or that they will happen at all. Any forward-looking statements speak only as of the date on which they were made, and we expressly disclaim any duty whatsoever to update such forward-looking statements.

First Call Analyst:
FCMN Contact:

Source: Muzak Holdings LLC

CONTACT: Dodd Haynes, Chief Financial Officer of Muzak Holdings LLC,
+1-803-396-3000

Web Site: http://www.muzak.com/

---

Profile: International Entertainment