Supercuts 2003 Annual Report Download - page 67

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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
63
The Company has guaranteed that stock issued in certain acquisitions will reach a certain market price. If the stock should not reach this
price during the agreed-upon time frame (typically three years from the date of acquisition), the Company is obligated to issue additional
shares to the sellers. Once the agreed-upon stock price is met or exceeded for a period of five consecutive days, the contingency is met and
the Company is no longer liable. Based on the June 30, 2003 market price, the Company would be required to provide an additional 139,248
shares related to these acquisition contingencies if the agreed-upon time frames were all assumed to have expired June 30, 2003. These
contingently issuable shares have been included in the calculation of diluted earnings per share for the year ended June 30, 2003.
4.
FINANCING ARRANGEMENTS:
The Company
’
s long
-
term debt as of June 30, 2003 and 2002 consists of the following:
(Dollars in thousands)
Interest rate % Amounts outstanding
Maturity
Dates
2003
2002
2003
2002
Senior term notes
2004
-
2013
4.69
-
8.39
6.55
-
8.39
$
269,478
$
237,711
Revolving credit facilities
2007
2.34
-
5.06
2.68
-
8.23
22,775
55,000
Equipment and leasehold notes payable
2004
-
2008
9.21
-
11.56
7.57
-
11.56
7,726
4,047
Other notes payable
2004
-
2009
5.00
-
11.50
5.00
-
10.00
1,778
2,258
301,757
299,016
Less current portion
(21,123
)
(7,221
)
Long
-
term portion
$
280,634
$
291,795
During the second quarter of fiscal year 2003, the Company extended its revolving credit facility through November of fiscal year 2006. The
facility bears interest at the prime rate or LIBOR plus 112.5 to 137.5 basis points. The prime rate at June 30, 2003 and 2002 was 4.00 and
4.75 percent, respectively. The three-month LIBOR rate at June 30, 2003 and 2002 was 1.11 and 1.86 percent, respectively. The revolving
credit facility requires a quarterly fee related to the unused portion of the facility at 27.5 to 32.5 basis points. The LIBOR credit spread and
unused fee are based on the Company’s debt-to-EBITDA ratio at the end of each fiscal quarter. The facility is used for short-term financing
of new salon and acquisition growth as well as to finance the general working capital requirements of the Company.
In the third quarter of fiscal year 2003, the Company renewed one of its private placement debt facilities, thereby extending its terms
through October 1, 2005 and increasing its related borrowing capacity from $125.0 to $246.0 million. No other significant changes were
made to either of the facilities
’
terms.
In June 2003, the Company borrowed $30.0 million under a 4.69 percent senior term note due June 2013 to repay existing debt from the
Company
’
s revolving credit facility.