Vistaprint 2008 Annual Report Download - page 82

VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2008, 2007 and 2006
(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, 2008 and 2007. 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, 2008 and 2007, the Company had $7,640
and $8,900 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 of $105
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 production facility near Windsor,
Ontario. The loan is secured by guarantees from VistaPrint Limited and two of its subsidiaries and is
payable in monthly installments of $111 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, 2008 and 2007, the Company had $7,889 and $9,222 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, 2008, 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, 2008.
Payments due on long-term debt, excluding interest related payments, during each of the five
fiscal years subsequent to June 30, 2008, are as follows:
2009................................................................ $ 3,304
2010................................................................ 8,424
2011................................................................ 5,854
2012................................................................ 394
2013................................................................ 394
Thereafter........................................................... 4,441
$22,811
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