Einstein Bros 2013 Annual Report Download - page 55

10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312514073832/d629623d10k.htm[9/11/2014 10:05:27 AM]
Sales, use and property tax expense
2,324
2,391
Insurance reserves 3,380 3,028
Dividends payable 2,852 2,493
Deferred gift card revenue 2,749 4,197
Accrued expenses and other current liabilities 4,881 4,738
Total accrued expenses and other current liabilities $ 28,104 $ 25,773
8. LONG-TERM DEBT
On December 6, 2012, the Company entered into an amended and restated senior credit facility with Bank of America and a syndicate of
institutional lenders, which was further amended on June 27, 2013 (the “Senior Credit Facility”).
The Senior Credit Facility has a commitment of up to $175.0 million, including a term loan of up to $100.0 million (the “Term Loan”) and a
revolving credit facility of up to $75.0 million (the “Revolving Facility”). Borrowings under the Senior Credit Facility bear interest at a rate equal
to an applicable margin plus, at the Company’ s option, either a variable base rate or a Eurodollar rate (which is calculated based off of London
InterBank Offered Rates (“LIBOR”)). The applicable margin for Eurodollar rate loans ranges from 1.75% to 3.25% and for base rate loans ranges
from 0.75% to 2.25%, depending on the level of the Company’ s consolidated leverage ratio (as defined in the Senior Credit Facility). Upon the
occurrence of a payment event of default which is continuing, all amounts due under the Senior Credit Facility will bear interest at 2.0% above the
interest rate otherwise applicable.
The Senior Credit Facility matures on June 6, 2018 (the “Maturity Date”). Commencing March 31, 2013, quarterly payments on the term
loan, ranging in value between $1.25 million and $2.50 million over the term of the Senior Credit Facility, are due on the last day of each calendar
quarter, with any remaining amounts due and payable upon maturity. The Term Loan also requires mandatory prepayments of:
• 100% of net cash proceeds of asset sales and insurance and condemnation proceeds above a threshold and subject to the ability to
reinvest under certain circumstances; and
• 100% of net cash proceeds of any debt issued by the Company, subject to certain exceptions.
The Senior Credit Facility contains a number of negative covenants that will limit the Company from taking certain actions. The Company is
also required to maintain:
• a minimum consolidated fixed charge coverage ratio ranging from 1.30x to 1.35x; and
• a maximum consolidated leverage ratio ranging from 2.75x to 3.50x.
The Senior Credit Facility limits annual capital expenditures to $32.0 million, but allows, subject to certain conditions, for a percentage of
any unused portion of the capital expenditure limit to be carried forward into the following year.
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Table of Contents
EINSTEIN NOAH RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The Senior Credit Facility contains customary events of default. In addition, the Senior Credit Facility provides for (i) an incremental term
loan (the “Incremental Term Loan”) and (ii) an increase in the Revolving Facility (the “Revolving Facility Increase” and together with the
Incremental Term Loan, the “Incremental Facilities”) of up to $50 million to be used by the Company, if needed, solely for the purpose of making
acquisitions permitted under the Senior Credit Facility. If the Company chooses to draw down the Incremental Facilities, the outstanding amount of
the Incremental Facilities must be repaid in equal quarterly installments on the last day of each calendar quarter, with any remaining amounts due
and payable on the Maturity Date. Borrowings under the Incremental Facilities, if any, will bear interest at the same rate schedule as other
borrowings under the Senior Credit Facility. Availability of the Incremental Facilities is subject to customary borrowing conditions, including
absence of any default or material adverse change, and to a requirement of advanced successful syndication of the Incremental Facilities.
As of December 31, 2013, the Company had $6.7 million in letters of credit outstanding which reduces the letter of credit availability under
its Senior Credit Facility to $13.3 million. The letters of credit expire on various dates during 2014, are generally automatically renewable for one
additional year and are payable upon demand in the event that the Company fails to pay the underlying obligation. Letters of credit reduce the
Company’ s availability under its Revolving Facility. The Company’ s availability under its Revolving Facility was $56.3 million as of
December 31, 2013.
The Company may make dividends and repurchases of its common stock using excess cash flow (as defined in the Senior Credit Facility).
The Company may prepay amounts outstanding under the Senior Credit Facility and may terminate commitments in whole at any time