WeightWatchers 2002 Annual Report Download - page 67

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
6. Long-Term Debt (Continued)
all existing and future senior indebtedness of the Company, including the Credit Facility. The notes are
guaranteed by certain subsidiaries of the Company.
The Credit Facility and the Notes contain a number of covenants that, among other things, restrict
the Company’s ability to dispose of assets, incur additional indebtedness, or engage in certain
transactions with affiliates and otherwise restrict the Company’s corporate activities. In addition, under
the Credit Facility, the Company is required to comply with specified financial ratios and tests,
including minimum fixed charge coverage and interest coverage ratios and maximum leverage ratios.
The Credit Facility and the Notes also restrict the Company’s ability to pay dividends and redeem the
Notes.
The aggregate amounts of existing long-term debt maturing in each of the next five years and
thereafter are as follows:
2003 ................................................... $18,361
2004 ................................................... 16,055
2005 ................................................... 15,511
2006 ................................................... 1,567
2007 ................................................... 148,806
2008 and thereafter ........................................ 254,380
$454,680
7. Redeemable Preferred Stock
The Company issued one million shares of Series A Preferred Stock to Heinz in conjunction with
the Transaction. On March 1, 2002, the Company redeemed from Heinz all of the Company’s Series A
Preferred Stock for a redemption price of $25,000 plus accrued and unpaid dividends. The redemption
was financed through additional borrowings of $12,000 under the Revolving Credit Facility, which was
repaid by the end of the second quarter 2002, and cash from operations.
8. Treasury Stock
On April 18, 2001, the Company entered into a Put/Call Agreement with Heinz, pursuant to which
Heinz acquired the right and option to sell during the period ending on or before May 15, 2002, and
the Company acquired the right and option to purchase after that date and on or before August 15,
2002, 6,719 shares of the common stock of the Company owned by Heinz. Under this agreement,
during the fiscal year ended December 29, 2001, Heinz sold all of its shares to the Company at fair
value for an aggregate purchase price of $27,132, which was funded with cash from operations. Heinz
no longer holds any common stock of the Company.
9. Earnings Per Share
Basic earnings per share (‘‘EPS’’) computations are calculated utilizing the weighed average
number of common shares outstanding during the periods presented. Diluted EPS includes the
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