Einstein Bros 2003 Annual Report Download - page 54

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http://www.sec.gov/Archives/edgar/data/949373/000104746904009609/a2132006z10-k.htm[9/11/2014 10:13:55 AM]
2003
2002
(amounts in thousands)
Security deposits $ 1,337 $ 265
Debt issuance costs 7,802 566
Other 31 695
$ 9,170 $ 1,526
F-22
6. Debt
Debt consists of the following:
December 30,
2003
December 31,
2002
(amounts in thousands)
$160 Million Facility(a) $ 160,000 $ —
$140 Million Facility, net of unamortized discount of $0 and $1,916(b) — 138,084
Bridge loan(c) — 4,443
Greenlight obligation(d) — 10,000
Revolving credit note payable to an affiliate(e) — 6,000
AmSouth Revolver(f) 1,000 —
Promissory note payable Chesapeake Bagel Bakery acquisition(g) 825 1,500
Note payable to New Jersey Economic Development Authority(h) 1,400 1,680
Other(i) — 176
163,225 161,883
Less-Current portion of debt 2,105 150,872
$ 161,120 $ 11,011
(a) On July 8, 2003, we issued the $160.0 Million Facility to replace our $140 Million Facility. Interest only payments are due semi-annually
in January and July. The $160 Million Facility was offered by us and guaranteed, fully and unconditionally, jointly and severally, by all
present and all future subsidiaries of ours other than the Non-Restricted Subsidiaries (as defined in the Indenture governing the notes) and is
collateralized by substantially all of our assets. As of December 30, 2003, we no longer have any active Non-Restricted Subsidiaries.
Pursuant to an Intercreditor Agreement, this debt is subordinate to the AmSouth Revolver. We are a holding company that conducts
substantially all of our business operations through our subsidiaries. We are dependent upon distributions or other inter-company transfers
from our subsidiaries to make payments on the notes and service our other obligations. There are no significant restrictions on our ability to
obtain funds from our subsidiaries by dividend or loan. The Registration Rights Agreement associated with the $160 Million Facility
required us to a) file an exchange offer with the SEC within 90 days of the closing date, b) effect the exchange offer within 150 days of the
closing date and c) commence that exchange offer within 30 days of its effective date. We have fulfilled each of these requirements. We
used the net proceeds of the offering, among other things, to pay off the $140 Million Facility.
The $160 Million Facility contains certain covenants, which, among others, include certain financial covenants such as limitations on
capital expenditures and minimum EBITDA as defined in the Indenture. These covenants are measured on a rolling twelve-month period
and fiscal quarter basis, respectively. This debt contains usual and customary default provisions. As of the fiscal year ended December 30,
2003, we are in compliance with all such financial covenants.
Debt issuance costs are being amortized using the effective interest method over the term of the $160 Million Facility. Interest expense of
$631,000, $0 and $0 related to issuance costs has been recorded for the years ended December 30, 2003, December 31, 2002 and January 1,
2002.