Sunbeam 2001 Annual Report Download - page 21

associated with the net operating loss carry-
back be used to prepay term debt.
In December 2001, the Company applied
the $21.0 million of proceeds from the sale of
the thermoformed assets to the outstanding
term loan balance. In January 2002, the Com-
pany applied $15.0 million of proceeds from
the income tax refund related to the thermo-
formed sale to further pay down the term loan.
The term loan, as amended and reflecting
the payments mentioned above, requires quar-
terly payments of principal of $3.1 million
through the first quarter of 2003, with quar-
terly payments of $11.2 million for the remain-
der of the term (through March 31, 2004).
Interest on the term loan is based upon fixed
increments over the adjusted London Inter-
bank Offered Rate or the agent bank’s alternate
borrowing rate as defined in the agreement.
The Company’s weighted average interest rate
on the term loan outstanding borrowings at
December 31, 2001 was 4.3%, exclusive of the
effects of the interest rate swap (see below). As
of December 31, 2001 and 2000, the outstand-
ing balances of the term loan were $75.5 mil-
lion and $120.0 million, respectively.
Because the interest rates applicable to the
term loan are based on floating rates identified
by reference to market rates, the fair market
value of the long-term debt as of December 31,
2001 and 2000 approximates its carrying value.
Interest on borrowings under the revolv-
ing credit facility are based upon fixed incre-
ments over the adjusted London Interbank Of-
fered Rate or the agent bank’s alternate
borrowing rate as defined in the agreement.
The agreement also requires the payment of
commitment fees on the unused balance. As of
December 31, 2001, $9.4 million of borrowings
were outstanding under this agreement with a
weighted average interest rate of 4.7%. As of
December 31, 2000, $16.0 million of borrow-
ings were outstanding with a weighted average
interest rate of 8.1%.
In February 2001, the Company entered
into an agreement with its lenders to amend
certain provisions of its term loan and revolv-
ing credit facilities. The amendment reduced
the revolving credit facility to $50.0 million,
provided for the Company’s accounts receiv-
able and inventory to be pledged as collateral,
and modified certain financial covenants.
The Company financed the 1999 acquisi-
tion of Triangle Plastics with a $250.0 million
credit facility consisting of a six-year $150.0 mil-
lion term loan and a $100.0 million revolving
credit facility with all borrowings scheduled to
mature on March 31, 2005. The agreement
contains certain guarantees and financial cov-
enants including minimum net worth require-
ments, minimum fixed charge coverage ratios
and maximum financial leverage ratios.
As part of the financing in 1999, the Com-
pany paid off $25.7 million of existing debt.
The Company incurred a $1.7 million pretax
($1.0 million after-tax) prepayment charge in
connection with the payoff. The charge is re-
ported as an extraordinary loss on the Consoli-
dated Statements of Operations.
In May 1999, the Company entered into a
three-year interest rate swap with an initial
notional value of $90.0 million. The swap ef-
fectively fixed the interest rate on approxi-
mately 60% of the Company’s term debt at a
maximum rate of 7.98% for the three-year pe-
riod. Adjusted for the application of proceeds
from the sale of thermoformed assets and from
the related income tax refund, the swap now
covers 100% of the Company’s term debt. The
fair market value of the swap as of Decem-
ber 31, 2001 and 2000 was approximately
$(524,000) and $45,000, respectively.
As of December 31, 2001, maturities on
long-term debt over the next five years, were
$19.1 million in 2002, $43.5 million in 2003,
$12.9 million in 2004, and none for 2005 and
2006. Maturities on long-term debt over the
next five years, as adjusted to reflect the appli-
cation of the $15 million of proceeds from the
income tax refund as mentioned above, are
$27.4 million in 2002, $36.8 million in 2003,
$11.2 million in 2004, and none for 2005 and
2006.
Interest paid on the Company’s borrow-
ings during the years ended December 31, 2001,
2000 and 1999 was $9.5 million, $11.4 million
and $8.3 million, respectively.
7. Special Charges (Credits) and
Reorganization Expenses
The Company incurred net special charges
(credits) and reorganization expenses of
Alltrista
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