Sunbeam 2004 Annual Report Download - page 27

Management’s Discussion and Analysis of Financial Condition and Results of Operations
(cont’d)
During 2003, we repaid seller debt financing, incurred in connection with the Tilia Acquisition, in
the principal amount of $10 million.
In January 2003, we filed a shelf registration statement, which was declared effective by the
Securities and Exchange Commission on January 31, 2003. This shelf registration statement was
intended to facilitate our access to growth capital for future acquisitions and allowed us to sell over time
up to $150 million of common stock, preferred stock, warrants, debt securities, or any combination of
these securities in one or more separate offerings in amounts, at prices and on terms to be determined
at the time of the sale. The equity offering completed in September 2003 and the $30 million of Notes
issued in May 2003, were covered by our shelf registration statement and, in the aggregate, constituted
the issuance of approximately $150 million in registered securities. Accordingly, no further issuances will
be made under this registration statement.
During 2003, we incurred costs in connection with the issuance of the Notes and the Amended
Credit Agreement of approximately $5.9 million.
2002 Activity
In April 2002, in connection with the Tilia Acquisition we made an offering of $150 million of Notes
to qualified institutional buyers in a private placement pursuant to Rule 144A under the Securities Act of
1933, as amended. The Notes were issued at a discount such that we received approximately $147.7
million in net proceeds. The Notes are scheduled to mature on May 1, 2012, however, on or after May 1,
2007, we can redeem all or part of the Notes at any time at a redemption price ranging from 100% to
104.875% of the principal amount, plus accrued and unpaid interest and liquidated damages, if any.
Prior to May 1, 2005, we may redeem up to 35% of the aggregate principal amount of the Notes with the
net cash proceeds from certain public equity offerings at a redemption price of 109.75% of the principal
amount, plus accrued and unpaid interest and liquidated damages, if any. Interest on the Notes accrues
at the rate of 9.75% per annum and is payable semi-annually in arrears on May 1 and November 1, with
the first payment having occurred on November 1, 2002. The April 2002 Indenture governing the Notes
also contains certain restrictions on the conduct of our business.
Prior to the Amended Credit Agreement, we entered into a credit agreement in connection with
the Tilia Acquisition (“Old Credit Agreement”). The Old Credit Agreement was scheduled to mature on
April 24, 2007. The revolving credit facility and the term loan facility bore interest at a rate equal to (i)
the Eurodollar Rate pursuant to an agreed formula or (ii) a Base Rate equal to the higher of (a) the
Bank of America prime rate and (b) the federal funds rate plus .50%, plus, in each case, an applicable
margin ranging from 2.00% to 2.75% for Eurodollar Rate loans and from .75% to 1.5% for Base Rate
loans. The Old Credit Agreement contained restrictions on the conduct of our business similar to the
Amended Credit Agreement. The Old Credit Agreement was replaced by the Amended Credit
Agreement.
Until it was replaced by the Old Credit Agreement on April 24, 2002, our senior credit facility, as
amended provided for a revolving credit facility of $40 million and a term loan which amortized
periodically as required by the terms of the agreement. Interest on borrowings under the term loan and
the revolving credit facilities were based upon fixed increments over adjusted LIBOR or the agent bank’s
alternate borrowing rate as defined in the agreement. The agreement also required the payment of
commitment fees on the unused balance. During the first quarter of 2002, approximately $38 million of
tax refunds we received were used to repay a portion of the outstanding amounts under this credit
agreement.
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