Rayovac 2002 Annual Report Download - page 49

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Rayovac Corporation and Subsidiaries
(In thousands, except per share amounts)
The non-compete agreement is being amortized on a straight-line basis over 5 years. The proprietary technology assets are being amortized on a straight-
line basis over 15 to 17 years.
The trade name and Latin America segment goodwill are associated with the 1999 acquisition of ROV Limited and were being amortized on a straight-
line basis over 40 years. The North America segment goodwill is associated with the 1998 acquisition of Best Labs and was being amortized on a
straight-line basis over 15 years. The Europe/ROW segment goodwill is associated with the 1998 acquisition of Brisco GmbH in Germany and was
being amortized on a straight-line basis over 15 years.
Pursuant to Statement No. 142, the Company ceased amortizing goodwill on October 1, 2001. Upon initial application of Statement No. 142, the
Company reassessed the useful lives of its intangible assets and deemed only the trade name asset to have an indefinite useful life because it is expected
to generate cash flows indefinitely. Based on this, the Company ceased amortizing the trade name on October 1, 2001.
The amortization expense for 2000, 2001, and 2002 are as follows:
2000 2001 2002
Amortization Expense
Goodwill amortization $1,241 $1,050 $—
Trade name amortization 2,250 2,250 —
Non-compete and proprietary technology 429 173 173
$3,920 $3,473 $173
(6) Debt
Debt consists of the following:
September 30,
2001 2002
Revolving credit facility $213,200 $174,500
Term loan facility 34,365 23,061
Series B Senior Subordinated Notes, due
November 1, 2006, with interest at 101⁄4%
payable semi-annually 239 —
Capitalized lease obligations 1,098 500
Notes and obligations, weighted-average
interest rate of 3.77% at September 30, 2002 9,075 3,810
257,977 201,871
Less current maturities 24,436 13,400
Long-term debt $233,541 $188,471
In 1999, the Company entered into an Amended and Restated Credit Agreement (“Second Restated Agreement”). The Second Restated Agreement pro-
vided for senior bank facilities, including term and revolving credit facilities in an aggregate amount of $325,000. Interest on borrowings was computed,
at the Company’s option, based on the base rate, as defined (“Base Rate”), or the Interbank Offering Rate (“IBOR”). Indebtedness under these amended
facilities was secured by substantially all of the assets of the Company and was guaranteed by certain of our subsidiaries. The Company recorded fees
paid as a result of the amendments as a debt issuance cost which was being amortized over the remaining life of the Second Restated Agreement.
The term facility included in the Second Restated Agreement initially totaled $75,000. The facility provided for quarterly amortization totaling $10,000
in 2000, $15,000 in 2001, 2002 and 2003, and $20,000 in 2004. The term facility also provided for annual prepayments, over and above the normal
amortization. Such payments would be a portion of “Excess Cash Flow” (EBITDA less certain operating expenditures including scheduled principal
payments of long-term debt). The quarterly amortization is reduced prorata for the effect of prepayments made as a result of Excess Cash Flow.