Nutrisystem 2015 Annual Report Download - page 56

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Rate for the relevant term. The applicable margin is subject to adjustment based on the Company’s consolidated
fixed charge coverage ratio and ranges from 0.00-0.50% per year for base rate loans and from 1.25-1.75% per
year for LIBOR rate loans. The Company will also pay an unused line fee. The unused line fee is 0.25% of the
total available credit. The Company incurred no interest expense during 2015, 2014 and 2013. During 2015, 2014
and 2013, the Company incurred $118, $135 and $140 in an unused line fee, respectively, under the Credit
Facility and prior financing arrangements. Interest payments and unused line fees are classified within interest
expense, net in the accompanying consolidated statements of operations.
The Credit Facility contains financial and other covenants including a minimum consolidated fixed charge
coverage ratio, if there are outstanding borrowings and limitations on, among other things, liens, indebtedness,
certain acquisitions, consolidations and sales of assets. As of December 31, 2015, the Company was in
compliance with all covenants contained in the Credit Facility.
At December 31, 2015, the Company had $23 of unamortized debt issuance costs associated with the Credit
Facility that are being amortized over its remaining term.
8. COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company leases its corporate headquarters and certain equipment. These leases generally have initial terms
of one to 12 years and have renewal options for additional periods. Certain of the leases also contain escalation
clauses based upon increases in costs related to the properties. Lease obligations, with initial or remaining terms
of one or more years, consist of the following at December 31, 2015:
2016 ..................................................................... $ 2,719
2017 ..................................................................... 2,747
2018 ..................................................................... 2,792
2019 ..................................................................... 2,844
2020 ..................................................................... 2,903
Thereafter ................................................................. 4,716
$18,721
Total rent expense for 2015, 2014 and 2013 was $2,304, $2,237 and $2,261, respectively.
Litigation
The Company is involved in various claims and routine litigation matters. In the opinion of management, after
consultation with legal counsel, the outcomes of such matters are not anticipated to have a material adverse effect
on the Company’s consolidated financial position, results of operations or cash flows in future years.
Contractual Commitments
The Company has entered into agreements with various food suppliers. These agreements may provide for
annual pricing, annual purchase obligations, exclusivity in the production of certain products, as well as rebates if
certain volume thresholds are exceeded, with terms of five years or less. The Company has total purchase
obligations of $43,582 as of December 31, 2015. The Company anticipates it will meet all annual purchase
obligations outstanding at December 31, 2015.
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