Henry Schein 2003 Annual Report Download - page 49

HENRY SCHEIN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In thousands, except share and per share data)
Note 7–Business Acquisitions and Divestiture (Continued)
During the year ended December 28, 2002, we purchased additional interests in three consolidated subsidiaries in Europe. These
purchases were not considered material either individually or in the aggregate.
During the year ended December 29, 2001, we completed the acquisition of two healthcare distribution businesses, which included the
purchase of the remaining 50% interest of an affiliate. Neither of these purchases was considered material either individually or in the
aggregate. The two transactions were accounted for under the purchase method of accounting and have been included in the
consolidated financial statements from their respective acquisition dates.
Note 8–Debt
Bank Credit Lines
We have a Revolving Credit Facility of $200.0 million that is a committed line scheduled to terminate in May 2006. The interest rate is
based on LIBOR, or prime, as defined in the agreement, which were 1.1% and 4.0% at December 27, 2003. The agreement provides,
among other things, that we maintain certain interest coverage and maximum leverage ratios, and contains restrictions relating to annual
dividends in excess of $25.0 million, guarantees of subsidiary debt, investments in subsidiaries, mergers and acquisitions, liens, certain
changes in ownership and employee and shareholder loans. There were no borrowings under this credit facility as of December 27, 2003.
As of December 27, 2003, certain of our subsidiaries had available various short-term bank credit lines totaling approximately $32.6 million
expiring through October 2004. Borrowings of $6.1 million under these credit lines, bear interest at rates ranging from 2.8% to 6.5%, and
were collateralized by accounts receivable, inventory and property and equipment with an aggregate net book value of $73.9 million at
December 27, 2003.
In connection with our pending acquisition of demedis and EDH for approximately 255 million euros, as discussed in Note 7, we will be
paying approximately 220 million euros at closing. The remaining purchase price will be paid from existing cash resources and/or the
proceeds of (i) a bridge loan and/or (ii) the issuance or sale in a public or private placement of equity interests or notes, debentures or
other debt securities (or another debt financing) with a maturity in excess of one year (in any case, a "Permanent Financing"). We have
obtained commitments for a $150.0 million bridge loan facility scheduled to mature on the six-month anniversary of the closing of the
acquisition. The bridge loan will be unsecured, and will bear interest, at our option, at LIBOR plus 0.925% or the prime rate. We intend
to refinance the bridge loan by means of a Permanent Financing or, if a Permanent Financing can be arranged prior to the consummation
of the Acquisition, we will pay the purchase price with the proceeds of such Permanent Financing. The acquisition is subject to standard
closing conditions and regulatory approvals and is expected to close mid-year 2004.
Long-term debt
Long-term debt consisted of the following:
As of As of
December 27, December 28,
2003 2002
Senior Notes $230,741 $230,000
Notes payable to banks, interest rates ranging from 3.9% to 9.0%,
payable in quarterly installments ranging from $5 to $102
through 2019 12,494 11,667
Various uncollateralized loans payable with interest, in varying
installments through 2006 4,780 1,509
Capital lease obligations (see Note 13) 2,338 2,047
Total 250,353 245,223
Less current maturities (3,253) (2,662)
Total long-term debt $247,100 $242,561
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