Classmates.com 2005 Annual Report Download - page 95

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Estimated future amortization expense at December 31, 2005 is as follows (in thousands):
Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
Line of Credit
In December 2003, United Online obtained a one-year $25 million unsecured revolving line of credit from a bank that was to expire in
December 2004. This facility was available for general corporate purposes and the interest rates on borrowings were based on current market
rates. The line of credit contained covenants pertaining to the maintenance of a minimum quick ratio, minimum cash balances with the lender
and minimum profitability levels. The line of credit provided additional working capital to support the Company’s growth and overall business
strategy.
In November 2004, the Company borrowed $10.3 million from the line of credit and repaid the amount on the same business day. No
interest expense was incurred related to the borrowing. The line of credit was canceled in December 2004 in connection with the signing of the
term loan agreement under which the Company borrowed $100 million.
Term Loan and Interest Rate Cap
In December 2004, the Company borrowed $100 million through a term loan facility dated December 3, 2004. A small portion of the
proceeds of the term loan facility were used to purchase shares tendered pursuant to the Company’s tender offer and pay related fees and
expenses. The funds are available for general corporate purposes, stock repurchases and acquisitions, subject to certain limitations.
The term loan matures in four years and amortizes in an annual amount of $23.3 million in years one, two and three and $30 million in year
four, payable in quarterly installments. Any voluntarily prepayments made by the Company will reduce, on a pro-rata basis, the remaining
outstanding amortization payments. The Company has the option to maintain the term loan as either base rate loans or Eurodollar loans, but at no
time shall there be outstanding more than four Eurodollar loans. Interest on the loans outstanding under the term loan facility will be payable, at
the Company’s option, at (a) a base rate equal to the higher of (i) the prime rate plus a margin of 2% and (ii) 0.50% in excess of the overnight
federal funds rate plus a
F- 26
Year Ending
December 31,
2006
$
15,922
2007
10,268
2008
7,211
2009
6,395
2010
4,862
Thereafter
14,680
Total
$
59,338
December 31,
2005
2004
Employee compensation and related expenses
$
20,353
$
11,459
Income taxes payable
9,769
1,119
Subscriber referral fees
4,281
4,281
Other
1,846
1,461
Total
$
36,249
$
18,320