WeightWatchers 2003 Annual Report Download - page 71

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
6. Long-Term Debt
The components of long-term debt are as follows:
January 3, 2004 December 28, 2002
Effective Effective
Balance rate Balance rate
EURO 100.0 million 13% Senior Subordinated Notes due
2009 ........................................ $10,564 13.00% $104,380 13.00%
US $150.0 million 13% Senior Subordinated Notes due 2009 . 5,130 13.00% 150,000 13.00%
Term Loan A due 2005 ............................ 24,340 3.04% 44,834 3.76%
Term Loan B due 2009 ............................. 380,937 3.56% 97,618 4.46%
Transferable Loan Certificate due 2009 ................. 48,903 3.85% 57,848 4.40%
469,874 454,680
Less Current Portion .............................. 15,554 18,361
$454,320 $436,319
Credit Facility
The Company’s Credit Agreement as amended on January 16, 2001, December 21, 2001, April 1,
2003, and August 21, 2003 (the ‘‘Credit Facility’’) consists of Term Loans, a Revolver, and a
transferable loan certificate (‘‘TLC’’).
On April 1, 2003, in connection with the acquisition of certain of the assets of the WW Group, the
Company borrowed $85,000 under a new Term Loan D pursuant to the Credit Facility, as amended on
that date. This loan was repaid and replaced as part of the August 21, 2003 refinancing, as explained
below.
On August 21, 2003, in conjunction with the tender offer (as described below), the Company
refinanced its Credit Facility as follows: Term Loans B and D and the TLC in the aggregate amount of
$204,674 were repaid and replaced with a new Term Loan B in the amount of $382,851 and a new TLC
in the amount of $49,149. Term Loan A in the amount of $29,956 remained in place along with a
Revolver with available borrowings up to $45,000.
Borrowings under the Credit Facility, as amended, are paid quarterly and bear interest at a rate
equal to LIBOR plus (a) in the case of Term Loan A and the Revolver, 1.75% or, at the Company’s
option, the alternate base rate, as defined, plus 0.75% and, (b) in the case of Term Loan B and the
TLC, 2.25% or, at the Company’s option, the alternate base rate plus 1.25%. At January 3, 2004 and
December 28, 2002, the interest rates were 2.93% and 3.15%, respectively for Term Loan A, 3.43% and
4.31%, respectively for Term Loan B, and 3.44% and 4.32%, respectively for the TLC. In addition to
paying interest on outstanding principal under the Credit Facility, the Company is also required to pay
a commitment fee to the lenders under the Revolver with respect to the unused commitments at a rate
equal to 0.50% per year. All assets of the Company collateralize the Credit Facility.
The Credit Facility contains covenants that restrict the Company’s ability to incur additional
indebtedness, pay dividends on and redeem capital stock, make other restricted payments, including
investments, sell its assets and enter into consolidations, mergers and transfers of all or substantially all
of its assets. The Credit Facility also requires the Company to maintain specified financial ratios and
satisfy financial condition tests.
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