Vistaprint 2007 Annual Report Download - page 82

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VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2007, 2006 and 2005
(in thousands, except share and per share data)
restricts VistaPrint B.V.’s ability to incur additional indebtedness. VistaPrint B.V. was in compliance
with all loan covenants at June 30, 2007 and 2006. There are no restrictions on VistaPrint B.V.’s ability
to pay dividends.
In November 2004, VistaPrint North American Services Corp., the Company’s Canadian
production subsidiary, entered into an $11,000 credit agreement with Comerica Bank—Canada. The
borrowings were used to finance new printing equipment purchases and the construction of a printing
facility located near Windsor, Ontario, Canada. At June 30, 2007 and 2006, the Company had $8,900
and $10,160 outstanding under this credit agreement, respectively. The loan is secured by a guaranty
from VistaPrint Limited and two of its subsidiaries and is payable in monthly installments beginning
November 1, 2005 through 2009 plus interest. On December 1, 2005, the interest rates for the
equipment term loan and the construction loan were fixed at 6.47% and 6.37%, respectively, over the
remaining terms of the loan.
In December 2005, VistaPrint North American Services Corp. amended its existing credit
agreement with Comerica Bank to include an additional $10,000 equipment term loan. The borrowings
have been used to finance new printing equipment purchases for the Windsor printing facility. The loan
is secured by guarantees from VistaPrint Limited and two of its subsidiaries and is payable in monthly
installments beginning on December 1, 2006 and continuing through December 2010, plus interest. As
of June 30, 2007, the interest rates on the various borrowings to date under this term loan had been
fixed over the remaining terms of the loan at rates ranging from 7.82% to 8.50%. At June 30, 2007 and
2006, the Company had $9,222 and $8,370 outstanding under this term loan, respectively.
The credit agreement with Comerica Bank includes covenants that require the Company to,
under certain circumstances, maintain a consolidated ratio of funded debt to cash flow at a maximum
of 2.50 to 1.00 and VistaPrint North American Services Corp. to maintain a minimum debt service
coverage ratio of 1.40 to 1.00 unless the Company maintains at least $30 million in unrestricted cash
and cash equivalents. Debt service coverage ratio is defined as the ratio of cash flow to the sum of
required principal payments plus cash interest paid. As of June 30, 2007, the minimum debt service
coverage covenant did not apply because the Company maintained at least $30.0 million in
unrestricted cash and cash equivalents. The Company and VistaPrint North American Services Corp.
were in compliance with all loan covenants at June 30, 2007.
Payments due on long-term debt during each of the five fiscal years subsequent to June 30,
2007, are as follows:
2008................................................................ $ 3,202
2009................................................................ 3,202
2010................................................................ 8,323
2011................................................................ 5,764
2012................................................................ 338
Thereafter........................................................... 4,145
$24,974
78