In addition, on February 14, 2003, the Company, through its
subsidiary Fisher Scientific Company L.L.C., borrowed $71.5
million of the $175 million available under the Revolving Facility
to refinance amounts outstanding under the revolving credit
portion of the previous credit facility entered into in 1998.
Proceeds from the 8 1/8 percent senior subordinated notes and
the Term Facility were used to refinance the Company’s
9 percent senior subordinated notes due in 2008. In conjunction
with the refinancing of the 9 percent senior subordinated notes,
the Company expects to incur a charge of approximately $45 million
consisting of $27 million of call premiums to be paid in cash
and $18 million of noncash deferred financing fees and other
costs. The Company is anticipating that this refinancing will
reduce interest expense in 2003 by approximately $12 million
to $14 million.
On February 14, 2003, the Company entered into a new $225 million
receivables security facility (“Receivables Securitization”),
which provides for the sale, on a revolving basis, of all of
the accounts receivable of Fisher Scientific Company L.L.C.,
Cole-Parmer Instrument Company, Fisher Clinical Services Inc.,
and Fisher Hamilton L.L.C. to FSI Receivables Company LLC, formerly
named FSI Receivables Corp. (“FSI”), a special purpose,
bankruptcy remote indirect wholly owned subsidiary of the Company.
The following table summarizes maturities for the Company’s
significant financial obligations as of December 31, 2002 (in
millions):
In addition to the contractual obligations noted above, the
Company has outstanding standby letters of credit totaling $27.2
million expiring over the next year.
We expect to satisfy our short-term funding requirements from
free operating cash flow, together with cash and cash equivalents
on hand or available through the new Credit Facility. A change
in demand for the Company’s goods and services, while
unlikely, would reduce free operating cash flow available to
fund our operations. If such a decrease in demand were significant
and free operating cash flow were reduced significantly, we
could utilize the Receivables Securitization facility (see Note
23–Subsequent Events) to the extent that we have qualified
receivables to sell through the facility. We believe that these
funding sources are sufficient to meet our ongoing operating,
capital expenditure and debt service requirements for at least
the next twelve months. Cash requirements for periods beyond
the next twelve months depend on our profitability, our ability
to manage working capital requirements and our growth rate.
We may seek to raise additional funds from public or private
debt or equity financings, or from other sources for general
corporate purposes or for the acquisition of businesses or products.
There can be no assurance that additional funds will be available
at all or that, if available, will be obtained at terms favorable
to us. Additional financing could also be dilutive.
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