|
On October
15, 1997, the Company entered into a $300 million competitive advance
and multi-currency revolving credit facility (the “Credit Facility”)
provided by a group of 13 banks. The Credit Facility provides for
a term loan of $150 million and a revolving credit facility of $150
million, $50 million of which is available for borrowings in foreign
currencies. The Credit Facility includes customary financial and
other covenants that require the maintenance of certain ratios including
maximum leverage and interest coverage and restricts the Company’s
ability to make certain investments, incur debt and dispose of assets.
The term loan ($ 80 million of which is outstanding at December
31, 2000) is payable over five years, $42.5 million of which is
due in 2001. Borrowings under the Credit Facility are, at the option
of the borrower, at one of several rates including LIBOR plus 20.0
to 87.5 basis points, based upon a defined financial ratio and the
loan type. In addition, the Company has the option to request participating
banks to bid on loan participation at lower rates than those contractually
provided by the Credit Facility. The Credit Facility requires the
Company to pay annual fees of 1/ 10 of 1% to 1/ 3 of 1%, based upon
a defined financial ratio of the total loan commitment. The Credit
Facility will terminate on October 15, 2002.
On May 1, 1998,
the Company issued $100 million of senior unsecured notes (the “Senior
Notes”) at a discount of $0.6 million, bearing a coupon rate
of 7.13% with an effective rate of 7.22%. The Senior Notes will
mature on May 1, 2008, with interest on the Senior Notes to be paid
semi-annually. The Company used the net proceeds from the offering
of approximately $99 million to repay amounts outstanding under
the Company’s Credit Facility.
During June
2000, the Company renewed its revolving line of credit for $15 million.
Borrowings on the line of credit are used to finance short-term
working capital requirements and other short-term general corporate
goals. The line of credit is due to expire on May 31, 2001 and bears
interest at LIBOR plus 75 basis points. Interest accrues monthly
on the outstanding balance. The line of credit contains essentially
the same covenants as the Credit Facility and is prepayable without
penalty.
11.
Interest Rate Hedges
On December
3, 1999, the Company entered into an interest rate swap agreement
with a notional amount of $115 million to fix certain of its variable
rate debt in order to reduce the Company’s exposure to fluctuations
in interest rates. The interest rate differential to be paid or
received on the interest rate swap agreement is accrued as interest
rates change and is recognized as an adjustment to interest expense.
On average at December 31, 1999, the interest rate swap agreement
had a life of two months with a fixed rate of 5.85% and variable
rate of 6.12%, and a fair market valuation of approximately $0.1
million. On March 3, 2000, the interest rate swap agreement was
settled for approximately $0.1 million.
12.
Foreign Operations
The Company
accounts for foreign currency translation in accordance with SFAS
No. 52, “Foreign Currency Translation.” Revenues generated
by foreign operations for the years ended December 31, 2000, 1999
and 1998 were $5.3 million, $6.9 million (exclusive of $2.5 million
of foreign dividends) and $5.8 million (exclusive of $2.1 million
of foreign dividends), respectively. The Company’s foreign
operations had net income (loss) of $( 12.3 million), $1.0 million
and $0.0 million for the years ended December 31, 2000, 1999 and
1998, respectively.
13.
Pension, Profit Sharing, and Incentive Plans
Bonuses accrued
for key executives of the Company under incentive compensation plans
were $1.1 million and $1.0 million at December 31, 2000 and 1999,
respectively.
|
