Vistaprint 2009 Annual Report Download - page 88

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VISTAPRINT LIMITED
(predecessor to Vistaprint N.V.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2009, 2008 and 2007
(in thousands, except share and per share data)
bank. The borrowings were used to finance the construction of the Company’s production facility
located in Venlo, the Netherlands. The Company had $5,384 and $6,413 outstanding under the Credit
Agreement as of June 30, 2009 and 2008, respectively. The loan is secured by a mortgage on the land
and building and is payable in quarterly installments beginning on October 1, 2004 through 2024 of 63
euro ($88 and $99 at June 30, 2009 and 2008, respectively). On April 1, 2006, the Company elected a
fixed rate option and the interest rate was fixed at 5.20% through April 1, 2016 at which time the rate
will be reset.
In November 2004, VistaPrint B.V. amended the Credit Agreement to include an additional 1,200
euro loan. The borrowings were used to finance a new printing press at the Venlo production facility.
This resulted in the Company having an additional $494 and $868 outstanding under the Credit
Agreement as of June 30, 2009 and 2008, respectively. This additional loan is secured by the printing
press and is payable in quarterly installments beginning on April 1, 2005 through 2011 of 50 euro ($71
and $79 at June 30, 2009 and 2008, respectively). On April 1, 2006, the Company elected a fixed rate
option and the interest rate was fixed at 5.10% over the remaining term of the loan.
In June 2009, VistaPrint B.V. further amended the Credit Agreement to accommodate the
changes to the Company’s legal structure due to the Change of Domicile. Following this amendment,
the Credit Agreement with ABN AMRO requires the Company to cause VistaPrint B.V. to maintain
tangible net worth at a minimum of 40% of VistaPrint B.V.’s adjusted balance sheet and to maintain a
total debt to EBITDA ratio of no more than 2.5. In addition, the Credit Agreement restricts VistaPrint
B.V.’s ability to incur additional indebtedness. VistaPrint B.V. was in compliance with all loan covenants
at June 30, 2009 and 2008. 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 equipment purchases and the construction of a production facility
located near Windsor, Ontario, Canada. At June 30, 2009 and 2008, the Company had $6,380 and
$7,640 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, with the remaining balance of $5,960 to be paid during
November 2009. 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 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, with the remaining balance of $4,667 to be paid during December 2010. 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, 2009 and 2008, the
Company had $6,556 and $7,889 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
82