Rayovac 2003 Annual Report Download - page 49

Also in connection with the acquisition of Remington, the Company completed a debt offering of $350,000 of 8.5% Senior Subordi-
nated Notes due in 2013. The terms of the notes permit the holders to require the Company to repurchase all or a portion of the
notes in the event of a change of control. In addition, the terms of the notes restrict or limit the ability of the Company and its sub-
sidiaries to, among other things: (i) pay dividends or make other restricted payments, (ii) incur additional indebtedness and issue
preferred stock, (iii) create liens, (iv) incur dividend and other restrictions affecting subsidiaries, (v) enter into mergers, consolida-
tions, or sales of all or substantially all of the assets of the Company, (vi) make asset sales, (vii) enter into transactions with affiliates,
and (viii) issue or sell capital stock of wholly owned subsidiaries of the Company. Payment obligations of the notes are fully and
unconditionally guaranteed on a joint and several basis by all of the Company’s domestic subsidiaries, including ROV Holding, Inc.
The foreign subsidiaries of the Company, which do not guarantee the payment obligations under the notes, are directly and wholly
owned by ROV Holding, Inc.
Also in connection with the acquisition of Remington, the Company assumed $180,000 of 11.0% Senior Series B and D Subordinated
Debentures due in 2006. Effective September 30, 2003, $123,990 of the notes were tendered and redeemed leaving $56,010 outstand-
ing. In connection with the tender process, the Company received consents sufficient to substantially amend the indenture relating
to the notes. The amendments became effective with the Acquisition. The $56,010 of notes outstanding at September 30, 2003, were
called for redemption, effective September 30, 2003, and redeemed effective October 29, 2003, and consequently are reflected as
current obligations in our Consolidated Balance Sheet as of September 30, 2003.
The aggregate scheduled maturities of debt as of September 30, 2003 are as follows:
2004 $ 72,852
2005 17,771
2006 17,486
2007 17,353
2008 67,514
2009 and thereafter 750,416
$943,392
The carrying value of the debt instruments noted above are approximately 99% of their estimated fair value.
Aggregate capitalized lease obligations are payable in installments of $2,381 in 2004, $1,486 in 2005, $1,210 in 2006, $1,077 in 2007,
$1,073 in 2008, and $16,873 thereafter.
(7) SHAREHOLDERS’ EQUITY
On October 1, 2000, the Company granted approximately 277 shares of restricted stock to certain members of management. The
total market value of the restricted shares on date of grant was approximately $4,746 which was recorded as unearned compensation
as a separate component of shareholders’ equity. During 2002, the Company recognized the forfeiture of approximately 24 restricted
shares of stock. The total market value on the date of grant for the forfeited shares was approximately $413 which was recorded as
an adjustment to unearned compensation. Approximately 186 of these shares vested on September 30, 2003 as the recipients were
still employed by the Company. The remaining 67 shares vested one third each year from the date of grant. Unearned compensa-
tion was amortized to expense over the three-year vesting period. As of September 30, 2003, all share restrictions for the October 1,
2000 grant have been removed.
On June 22, 2001, the Company completed a primary offering of 3,500 shares of Common stock. The net proceeds of approximately
$64,200 after deducting the underwriting discounts and offering expenses, were used to repurchase approximately $64,800 principal
amount of 10.25% Series B Senior Subordinated Notes.
Concurrently, the Thomas H. Lee Group and its affiliates sold approximately 4,200 shares and certain Rayovac officers and employees
sold approximately 900 shares in a secondary offering of Common stock. The Company did not receive any proceeds from the sales
of the secondary offering shares but incurred expenses for the offering of approximately $200, which are included in Restructuring
charges in Operating expenses in our Consolidated Statement of Operations.
Notes to Consolidated Financial Statements
Rayovac Corporation and Subsidiaries
(In thousands, except per share amounts)