WeightWatchers 2004 Annual Report Download - page 80

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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)
Due to the early extinguishment of the Term Loans resulting from the January 2004 refinancing,
the Company recognized expenses of $3,254 for the year ended January 1, 2005, which included the
write-off of unamortized debt issuance costs of $2,933 and $321 of fees associated with the transaction.
Senior Subordinated Notes
As part of the Recapitalization, WWI issued $150,000 USD denominated and A100,000 euro
denominated principal amount of 13% Senior Subordinated Notes due 2009 (the ‘‘Notes’’) to qualified
institutional buyers.
In fiscal 2003, WWI successfully completed a tender offer and consent solicitation to purchase
96.6% of its $150,000 USD denominated ($144,900) and 91.6% of its A100,000 euro denominated
(A91,600) Notes. The consideration for the tender offer and consent solicitation was funded from cash
from operations of $57,292 and additional borrowings under the Credit Facility of $227,326 (as
described above). On October 1, 2004, WWI repurchased and retired the remaining balance of its
Notes in the amounts of $5,100 USD denominated and A8,400 euro-denominated. Due to this early
extinguishment of debt, the Company recognized expenses of $1,010 in the fiscal year ended January 1,
2005 related to the tender premiums associated with this redemption, and $47,368 in the fiscal year
ended January 3, 2004, which included tender premiums of $42,619, the write-off of unamortized debt
issuance costs of $4,387 and $362 of fees associated with the transaction.
At January 3, 2004, the euro notes of A8,388 translated into $10,564. The unrealized impact of the
change in foreign exchange rates related to euro denominated debt was reflected in other expense, net.
The Company used interest rate swaps and foreign currency forward contracts in association with its
debt. As of January 3, 2004, 100% of the Company’s euro denominated Notes were effectively hedged
through the use of a cash flow hedge.
Maturities
At January 1, 2005, the aggregate amounts of existing long-term debt maturing in each of the next
five years and thereafter are as follows:
2005 ................................................... $ 3,000
2006 ................................................... 3,000
2007 ................................................... 3,000
2008 ................................................... 3,000
2009 ................................................... 385,781
2010 and thereafter ........................................ 71,344
$469,125
7. Redeemable Preferred Stock
WWI issued 1,000 shares of Series A Preferred Stock to Heinz in conjunction with the
Recapitalization. On March 1, 2002, WWI redeemed from Heinz all of its Series A Preferred Stock for
a redemption price of $25,000 plus accrued and unpaid dividends. The redemption was financed
F-18