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HAS » Topics » We rely on external financing, including our credit facilities and accounts receivable securitization facility, to help fund our operations. If we were unable to obtain or service such financing, or if the restrictions imposed by such financing were too bThis excerpt taken from the HAS 10-K filed Feb 24, 2010. We
rely on external financing, including our credit facilities and
accounts receivable securitization facility, to help fund our
operations. If we were unable to obtain or service such
financing, or if the restrictions imposed by such financing were
too burdensome, our business would be harmed.
Due to the seasonal nature of our business, in order to meet our
working capital needs, particularly those in the third and
fourth quarters, we rely on our revolving credit facility and
our other credit facilities for working capital. We currently
have a revolving credit agreement that expires in 2011, which
provides for a $300,000 committed revolving credit facility
which provides the Company the ability to request increases in
the committed facility in additional increments of $50,000,
subject to lender agreement, up to a total of $500,000. The
credit agreement contains certain restrictive covenants setting
forth leverage and coverage requirements, and certain other
limitations typical of an investment grade facility. These
restrictive covenants may limit our future actions, and
financial, operating and strategic flexibility. In addition, our
financial covenants were set at the time we entered into our
credit facility. Our performance and financial condition may not
meet our original expectations, causing us to fail to meet such
financial covenants. Non-compliance with our debt covenants
could result in us being unable to utilize borrowings under our
revolving credit facility and other bank lines, a circumstance
which potentially could occur when operating shortfalls would
most require supplementary borrowings to enable us to continue
to fund our operations.
As an additional source of working capital and liquidity, we
currently have a $250,000 accounts receivable securitization
program. Under this program, we sell on an ongoing basis,
substantially all of our domestic U.S. dollar denominated
trade accounts receivable to a bankruptcy remote special purpose
entity. Under this facility, the special purpose entity is able
to sell, on a revolving basis, undivided ownership interests in
the eligible receivables to bank conduits. During the term of
the facility, we must maintain certain performance ratios. If we
fail to maintain these ratios, we could be prevented from
accessing this cost-effective source of working capital and
short-term financing. Additionally, changes in financial
reporting, regulatory or other requirements which went into
effect in 2010 or may occur in the future may significantly
increase the cost of our accounts receivable securitization
facility, which could make use of such a facility uneconomical.
We believe that our cash flow from operations, together with our
cash on hand and access to existing credit facilities and our
accounts receivable securitization facility, are adequate for
current and planned needs in 2010. However, our actual
experience may differ from these expectations. Factors that may
lead to a difference include, but are not limited to, the
matters discussed herein, as well as future events that might
have the effect of reducing our available cash balance, such as
unexpected material operating losses or increased capital or
other expenditures, as well as increases in inventory or
accounts receivable that are ineligible for sale under our
securitization facility, regulatory or accounting changes which
make accounts receivable securitization facilities more
expensive or otherwise less desirable as sources of working
capital funding, or other future events that may reduce or
eliminate the availability of external financial resources.
Not only may our individual financial performance impact our
ability to access sources of external financing, but significant
disruptions to credit markets in general may also harm our
ability to obtain financing.
Table of Contents
Although we believe the risk of nonperformance by the
counterparties to our financial facilities is not significant,
in times of severe economic downturn
and/or
distress in the credit markets, it is possible that one or more
sources of external financing may be unable or unwilling to
provide funding to us. In such a situation, it may be that we
would be unable to access funding under our existing credit
facilities, and it might not be possible to find alternative
sources of funding.
We also may choose to finance our capital needs, from time to
time, through the issuance of debt securities. Our ability to
issue such securities on satisfactory terms, if at all, will
depend on the state of our business and financial condition, any
ratings issued by major credit rating agencies, market interest
rates, and the overall condition of the financial and credit
markets at the time of the offering. The condition of the credit
markets and prevailing interest rates have fluctuated
significantly in the past and are likely to fluctuate in the
future. Variations in these factors could make it difficult for
us to sell debt securities or require us to offer higher
interest rates in order to sell new debt securities. The failure
to receive financing on desirable terms, or at all, could damage
our ability to support our future operations or capital needs or
engage in other business activities.
As of December 27, 2009, we had $1,134,723 of total
principal amount of indebtedness outstanding. If we are unable
to generate sufficient available cash flow to service our
outstanding debt we would need to refinance such debt or face
default. There is no guarantee that we would be able to
refinance debt on favorable terms, or at all. This total
indebtedness includes $249,828 in aggregate principal amount of
2.75% senior convertible debentures that we issued in 2001.
On December 1, 2011 and December 1, 2016, and upon the
occurrence of certain fundamental corporate changes, holders of
the 2.75% senior convertible debentures may require us to
purchase their debentures. At that time, the purchase price may
be paid in cash, shares of common stock or a combination of the
two, at our discretion, provided that we will pay accrued and
unpaid interest in cash. We may not have sufficient cash at that
time to make the required repurchases and may be required to
settle in shares of common stock.
As a
manufacturer of consumer products and a large multinational
corporation, we are subject to various government regulations
and may be subject to additional regulations in the future,
violation of which could subject us to sanctions or otherwise
harm our business. In addition, we could be the subject of
future product liability suits or product recalls, which could
harm our business.
As a manufacturer of consumer products, we are subject to
significant government regulations, including, in the United
States, under The Consumer Products Safety Act, The Federal
Hazardous Substances Act, and The Flammable Fabrics Act, as well
as under product safety and consumer protection statutes in our
international markets. In addition, certain of our products are
subject to regulation by the Food and Drug Administration or
similar international authorities. While we take all the steps
we believe are necessary to comply with these acts, there can be
no assurance that we will be in compliance in the future.
Failure to comply could result in sanctions which could have a
negative impact on our business, financial condition and results
of operations. We may also be subject to involuntary product
recalls or may voluntarily conduct a product recall. While costs
associated with product recalls have generally not been material
to our business, the costs associated with future product
recalls individually and in the aggregate in any given fiscal
year, could be significant. In addition, any product recall,
regardless of direct costs of the recall, may harm consumer
perceptions of our products and have a negative impact on our
future revenues and results of operations.
Governments and regulatory agencies in the markets where we
manufacture and sell products may enact additional regulations
relating to product safety and consumer protection in the
future, and may also increase the penalties for failure to
comply with product safety and consumer protection regulations.
In addition, one or more of our customers might require changes
in our products, such as the non-use of certain materials, in
the future. Complying with any such additional regulations or
requirements could impose increased costs on our business.
Similarly, increased penalties for non-compliance could subject
us to greater expense in the event any of our products were
found to not comply with such regulations. Such increased costs
or penalties could harm our business.
Table of Contents
In addition to government regulation, products that have been or
may be developed by us may expose us to potential liability from
personal injury or property damage claims by the users of such
products. There can be no assurance that a claim will not be
brought against us in the future. Any successful claim could
significantly harm our business, financial condition and results
of operations.
As a large, multinational corporation, we are subject to a host
of governmental regulations throughout the world, including
antitrust, customs and tax requirements, anti-boycott
regulations, environmental regulations and the Foreign Corrupt
Practices Act. Complying with these regulations imposes costs on
us which can reduce our profitability and our failure to
successfully comply with any such legal requirements could
subject us to monetary liabilities and other sanctions that
could further harm our business and financial condition.
This excerpt taken from the HAS 10-K filed Feb 25, 2009. We
rely on external financing, including our credit facilities and
accounts receivable securitization facility, to help fund our
operations. If we were unable to obtain or service such
financing, or if the restrictions imposed by such financing were
too burdensome, our business would be harmed.
Due to the seasonal nature of our business, in order to meet our
working capital needs, particularly those in the third and
fourth quarters, we rely on our revolving credit facility and
our other credit facilities for working capital. We currently
have a revolving credit agreement that expires in 2011, which
provides for a $300,000 committed revolving credit facility
which provides the Company the ability to request increases in
the committed facility in additional increments of $50,000,
subject to lender agreement, up to a total of $500,000. The
credit agreement contains certain restrictive covenants setting
forth leverage and coverage requirements, and certain other
limitations typical of an investment grade facility. These
restrictive covenants may limit our future actions, and
financial, operating and strategic flexibility. In addition, our
financial covenants were set at the time we entered into our
credit facility. Our performance and financial condition may not
meet our original expectations, causing us to fail to meet such
financial covenants. Non-compliance with our debt covenants
could result in us being unable to utilize borrowings under our
revolving credit facility and other bank lines, a circumstance
which potentially could occur when operating shortfalls would
most require supplementary borrowings to enable us to continue
to fund our operations.
As an additional source of working capital and liquidity, we
currently have a $250,000 accounts receivable securitization
program, which is increased to $300,000 for the period from
fiscal October through fiscal January. Under this program, we
sell on an ongoing basis, substantially all of our domestic
U.S. dollar denominated trade accounts receivable to a
bankruptcy remote special purpose entity. Under this facility,
the special purpose entity is able to sell, on a revolving
basis, undivided ownership interests in the eligible receivables
to bank conduits. During the term of the facility, we must
maintain certain performance ratios. If we fail to maintain
these ratios, we could be prevented from accessing this
cost-effective source of working capital and short-term
financing.
We believe that our cash flow from operations, together with our
cash on hand and access to existing credit facilities and our
accounts receivable securitization facility, are adequate for
current and planned needs
Table of Contents
in 2009. However, our actual experience may differ from these
expectations. Factors that may lead to a difference include, but
are not limited to, the matters discussed herein, as well as
future events that might have the effect of reducing our
available cash balance, such as unexpected material operating
losses or increased capital or other expenditures, as well as
increases in inventory or accounts receivable that are
ineligible for sale under our securitization facility, or future
events that may reduce or eliminate the availability of external
financial resources.
Not only may our individual financial performance impact our
ability to access sources of external financing, but significant
disruptions to credit markets in general may also harm our
ability to obtain financing. Although we believe the risk of
nonperformance by the counterparties to our financial facilities
is not significant, in times of severe economic downturn
and/or
distress in the credit markets, it is possible that one or more
sources of external financing may be unable or unwilling to
provide funding to us. In such a situation, it may be that we
would be unable to access funding under our existing credit
facilities, and it might not be possible to find alternative
sources of funding.
We also may choose to finance our capital needs, from time to
time, through the issuance of debt securities. Our ability to
issue such securities on satisfactory terms, if at all, will
depend on the state of our business and financial condition, any
ratings issued by major credit rating agencies, market interest
rates, and the overall condition of the financial and credit
markets at the time of the offering. The condition of the credit
markets and prevailing interest rates have fluctuated
significantly in the past and are likely to fluctuate in the
future. Variations in these factors could make it difficult for
us to sell debt securities or require us to offer higher
interest rates in order to sell new debt securities. The failure
to receive financing on desirable terms, or at all, could damage
our ability to support our future operations or capital needs or
engage in other business activities.
As of December 28, 2008, we had $709,723 of total principal
amount of indebtedness outstanding. If we are unable to generate
sufficient available cash flow to service our outstanding debt
we would need to refinance such debt or face default. There is
no guarantee that we would be able to refinance debt on
favorable terms, or at all. This total indebtedness includes
$249,828 in aggregate principal amount of 2.75% senior
convertible debentures that we issued in 2001. On
December 1, 2011 and December 1, 2016, and upon the
occurrence of certain fundamental corporate changes, holders of
the 2.75% senior convertible debentures may require us to
purchase their debentures. At that time, the purchase price may
be paid in cash, shares of common stock or a combination of the
two, at our discretion, provided that we will pay accrued and
unpaid interest in cash. We may not have sufficient cash at that
time to make the required repurchases and may be required to
settle in shares of common stock.
As a
manufacturer of consumer products and a large multinational
corporation, we are subject to various government regulations
and may be subject to additional regulations in the future,
violation of which could subject us to sanctions or otherwise
harm our business. In addition, we could be the subject of
future product liability suits or product recalls, which could
harm our business.
As a manufacturer of consumer products, we are subject to
significant government regulations, including, in the United
States, under The Consumer Products Safety Act, The Federal
Hazardous Substances Act, and The Flammable Fabrics Act, as well
as under product safety and consumer protection statutes in our
international markets. In addition, certain of our products are
subject to regulation by the Food and Drug Administration or
similar international authorities. While we take all the steps
we believe are necessary to comply with these acts, there can be
no assurance that we will be in compliance in the future.
Failure to comply could result in sanctions which could have a
negative impact on our business, financial condition and results
of operations. We may also be subject to involuntary product
recalls or may voluntarily conduct a product recall. While costs
associated with product recalls have generally not been material
to our business, the costs associated with future product
recalls individually and in the aggregate in any given fiscal
year, could be significant. In addition, any product recall,
regardless of direct costs of the recall, may harm consumer
perceptions of our products and have a negative impact on our
future revenues and results of operations.
Table of Contents
Governments and regulatory agencies in the markets where we
manufacture and sell products may enact additional regulations
relating to product safety and consumer protection in the
future, and may also increase the penalties for failure to
comply with product safety and consumer protection regulations.
In addition, one or more of our customers might require changes
in our products, such as the non-use of certain materials, in
the future. Complying with any such additional regulations or
requirements could impose increased costs on our business.
Similarly, increased penalties for non-compliance could subject
us to greater expense in the event any of our products were
found to not comply with such regulations. Such increased costs
or penalties could harm our business.
In addition to government regulation, products that have been or
may be developed by us may expose us to potential liability from
personal injury or property damage claims by the users of such
products. There can be no assurance that a claim will not be
brought against us in the future. Any successful claim could
significantly harm our business, financial condition and results
of operations.
As a large, multinational corporation, we are subject to a host
of governmental regulations throughout the world, including
antitrust, customs and tax requirements, anti-boycott
regulations and the Foreign Corrupt Practices Act. Our failure
to successfully comply with any such legal requirements could
subject us to monetary liabilities and other sanctions that
could harm our business and financial condition.
This excerpt taken from the HAS 10-K filed Feb 27, 2008. We
rely on external financing, including our credit facilities and
accounts receivable securitization facility, to help fund our
operations. If we were unable to obtain or service such
financing, or if the restrictions imposed by such financing were
too burdensome, our business would be harmed.
Due to the seasonal nature of our business, in order to meet our
working capital needs, particularly those in the third and
fourth quarters, we rely on our revolving credit facility and
our other credit facilities for working capital. We currently
have a five-year revolving credit agreement, which provides for
a $300,000 committed revolving credit facility which provides
the Company the ability to request increases in the committed
facility in additional increments of $50,000, up to a total of
$500,000. The credit agreement contains certain restrictive
covenants setting forth leverage and coverage requirements, and
certain other limitations typical of an investment grade
facility. These restrictive covenants may limit our future
actions, and financial, operating and strategic flexibility. In
addition, our financial covenants were set at the time we
entered into our credit facility. Our performance and financial
condition may not meet our original expectations, causing us to
fail to meet such financial covenants. Non-compliance with our
debt covenants could result in us being unable to utilize
borrowings under our revolving credit facility and other bank
lines, a circumstance which potentially could occur when
operating shortfalls would most require supplementary borrowings
to enable us to continue to fund our operations.
As an additional source of working capital and liquidity, we
currently have a $250,000 accounts receivable securitization
program, which is increased to $300,000 for the period from
fiscal October through fiscal January. Under this program, we
sell on an ongoing basis, substantially all of our domestic
U.S. dollar denominated trade accounts receivable to a
bankruptcy remote special purpose entity. Under this facility,
the special purpose entity is able to sell, on a revolving
basis, undivided ownership interests in the eligible receivables
to bank conduits. During the term of the facility, we must
maintain certain performance ratios. If we fail to maintain
these ratios, we could be prevented from accessing this
cost-effective source of working capital and short-term
financing.
We believe that our cash flow from operations, together with our
cash on hand and access to existing credit facilities and our
accounts receivable securitization facility, are adequate for
current and planned needs in 2008. However, our actual
experience may differ from these expectations. Factors that may
lead to a difference include, but are not limited to, the
matters discussed herein, as well as future events that might
have the effect of reducing our available cash balance, such as
unexpected material operating losses or increased capital or
other expenditures, as well as increases in inventory or
accounts receivable that are ineligible for sale under our
securitization facility, or future events that may reduce or
eliminate the availability of external financial resources.
We also may choose to finance our capital needs, from time to
time, through the issuance of debt securities. Our ability to
issue such securities on satisfactory terms, if at all, will
depend on the state of our business and financial condition, any
ratings issued by major credit rating agencies, market interest
rates, and the overall condition of the financial and credit
markets at the time of the offering. The condition of the credit
markets and prevailing interest rates have fluctuated in the
past and are likely to fluctuate in the future. Variations in
these factors could make it difficult for us to sell debt
securities or require us to offer higher interest rates in order
to sell new debt securities. The failure to receive financing on
desirable terms, or at all, could damage our ability to support
our future operations or capital needs or engage in other
business activities.
As of December 30, 2007, we had $844,815 of total principal
amount of indebtedness outstanding, of which $135,092 is due in
July 2008. If we are unable to generate sufficient available
cash flow to service our outstanding debt we would need to
refinance such debt or face default. There is no guarantee that
we would be able to refinance debt on favorable terms, or at
all. This total indebtedness includes $249,828 in aggregate
principal amount of 2.75% senior convertible debentures
that we issued in 2001. On December 1, 2011 and
December 1, 2016, and upon the occurrence of certain
fundamental corporate changes, holders of the 2.75% senior
convertible debentures may require us to purchase their
debentures. At that time, the purchase price may be paid in
cash, shares of common stock or a combination of the two, at our
discretion, provided
Table of Contents
that we will pay accrued and unpaid interest in cash. We may not
have sufficient cash at that time to make the required
repurchases and may be required to settle in shares of common
stock.
This excerpt taken from the HAS 10-K filed Feb 28, 2007. We
rely on external financing, including our credit facilities and
accounts receivable securitization facility, to fund our
operations. If we were unable to obtain or service such
financing, or if the restrictions imposed by such financing were
too burdensome, our business would be harmed.
Due to the seasonal nature of our business, in order to meet our
working capital needs, particularly those in the third and
fourth quarters, we rely on our revolving credit facility and
our other credit facilities for working capital. We currently
have a five-year revolving credit agreement, which provides for
a $300,000 committed revolving credit facility which provides
the Company the ability to request increases in the committed
facility in additional increments of $50,000, up to a total of
$500,000. The credit agreement contains certain restrictive
covenants setting forth leverage and coverage requirements, and
certain other limitations typical of an investment grade
facility. These restrictive covenants may limit our future
actions, and financial, operating and strategic flexibility. In
addition, our financial covenants were set at the time we
entered into our credit facility. Our performance and financial
condition may not meet our original expectations, causing us to
fail to meet such financial covenants. Non-compliance with our
debt covenants could result in us being unable to utilize
borrowings under our revolving credit facility and other bank
lines, a circumstance which potentially could occur when
operating shortfalls would most require supplementary borrowings
to enable us to continue to fund our operations.
As an additional source of working capital and liquidity, we
currently have a $250,000 accounts receivable securitization
program, which is increased to $300,000 from fiscal October
through fiscal January. Under this program, we sell on an
ongoing basis, substantially all of our U.S. dollar
denominated trade accounts receivable to a bankruptcy remote
special purpose entity. Under this facility, the special purpose
entity is able to sell, on a revolving basis, undivided
ownership interests in the eligible receivables to bank
conduits. During the term of the facility, we must maintain
certain performance ratios. If we fail to maintain these ratios,
we could be prevented from accessing this cost-effective source
of working capital and short-term financing.
We believe that our cash flow from operations, together with our
cash on hand and access to existing credit facilities and our
accounts receivable securitization facility, are adequate for
current and planned needs in 2007. However, our actual
experience may differ from these expectations. Factors that may
lead to a difference include, but are not limited to, the
matters discussed herein, as well as future events that might
have the effect of reducing our available cash balance, such as
unexpected material operating losses or increased capital or
other expenditures, as well as increases in inventory or
accounts receivable that are ineligible for sale under our
securitization facility, or future events that may reduce or
eliminate the availability of external financial resources.
We also may choose to finance our capital needs, from time to
time, through the issuance of debt securities. Our ability to
issue such securities on satisfactory terms, if at all, will
depend on the state of our business and financial condition, any
ratings issued by major credit rating agencies, market interest
rates, and the overall condition of the financial and credit
markets at the time of the offering. The condition of the credit
markets and prevailing interest rates have fluctuated in the
past and are likely to fluctuate in the future. Variations in
these factors could make it difficult for us to sell debt
securities or require us to offer higher interest rates in order
to sell new debt securities. The failure to receive financing on
desirable terms, or at all, could damage our ability to support
our future operations or capital needs or engage in other
business activities.
As of December 31, 2006, we had $494,983 of total principal
amount of indebtedness outstanding. If we are unable to generate
sufficient available cash flow to service our outstanding debt
we would need to refinance such debt or face default. There is
no guarantee that we would be able to refinance debt on
favorable terms, or at all. This total indebtedness includes
$249,996 in aggregate principal amount of 2.75% senior
convertible debentures that we issued in 2001. On
December 1, 2011 and December 1, 2016, and upon the
occurrence of certain fundamental corporate changes, holders of
the 2.75% senior convertible debentures may require us to
purchase their debentures. At that time, the purchase price may
be paid in cash, shares of common stock or a combination of the
two, at our discretion, provided that we will pay accrued and
unpaid
Table of Contents
interest in cash. We may not have sufficient cash at that time
to make the required repurchases and may be required to settle
in shares of common stock.
We previously issued warrants that provide the holder with an
option through January 2008 to sell all of these warrants to us
for a price to be paid, at our election, of either $100,000 in
cash or $110,000 in our common stock, such stock being valued at
the time of the exercise of the option. Should we be required to
settle these warrants under this option, we believe that we will
have adequate funds to settle in cash if necessary. However, we
may not have sufficient funds at that time to make the required
payment and may be required to settle the warrants in stock.
This excerpt taken from the HAS 10-K filed Feb 22, 2006. We
rely on external financing, including our credit facilities and
accounts receivable securitization facility, to fund our
operations. If we were unable to obtain or service such
financing, or if the restrictions imposed by such financing were
too burdensome, our business would be harmed.
Due to the seasonal nature of our business, in order to meet our
working capital needs, particularly those in the third and
fourth quarters, we rely on our revolving credit facility and
our other credit facilities for working capital. We currently
have an amended and restated revolving credit agreement, which
provides for a $350,000 revolving credit facility. The credit
agreement contains certain restrictive covenants setting forth
minimum cash flow and coverage requirements, and a number of
other limitations, including restrictions on capital
expenditures, investments, acquisitions, share repurchases,
incurrence of indebtedness and dividend payments. These
restrictive covenants may limit our future actions, and
financial, operating and strategic flexibility. In addition, our
financial covenants were set at the time we entered into our
credit facility. Our performance and financial condition may not
meet our original expectations, causing us to fail to meet such
financial covenants. If we were unable to meet our financial
covenants, or if we failed to comply with other covenants in our
credit facility, we could face significant negative
consequences, including loss of the ability to raise capital
under these facilities to fund our operations.
As an additional source of working capital and liquidity, we
currently have a $250,000 accounts receivable securitization
program. Under this program, we sell on an ongoing basis,
substantially all of our U.S. dollar denominated trade
accounts receivable to a bankruptcy remote special purpose
entity. Under this facility, the special purpose entity is able
to sell, on a revolving basis, undivided ownership interests in
the eligible receivables to bank conduits. During the term of
the facility, we must maintain certain performance ratios. If we
fail to maintain these ratios, we could be prevented from
accessing this cost-effective source of working capital and
short-term financing.
We believe that our cash flow from operations, together with our
cash on hand and access to existing credit facilities and our
accounts receivable securitization facility, are adequate for
current and planned needs
Table of Contents
in 2006. However, our actual experience may differ from these
expectations. Factors that may lead to a difference include, but
are not limited to, the matters discussed herein, as well as
future events that might have the effect of reducing our
available cash balance, such as unexpected material operating
losses or increased capital or other expenditures, as well as
increases in inventory or accounts receivable that are
ineligible for sale under our securitization facility, or future
events that may reduce or eliminate the availability of external
financial resources.
We also may choose to finance our capital needs, from time to
time, through the issuance of debt securities. Our ability to
issue such securities on satisfactory terms, if at all, will
depend on the state of our business and financial condition, any
ratings issued by major credit rating agencies, market interest
rates, and the overall condition of the financial and credit
markets at the time of the offering. The condition of the credit
markets and prevailing interest rates have fluctuated in the
past and are likely to fluctuate in the future. Variations in
these factors could make it difficult for us to sell debt
securities or require us to offer higher interest rates in order
to sell new debt securities. The failure to receive financing on
desirable terms, or at all, could damage our ability to support
our future operations or capital needs or engage in other
business activities.
As of December 25, 2005, we had approximately
$527.7 million of total principal amount of indebtedness
outstanding. If we are unable to generate sufficient available
cash flow to service our outstanding debt we would need to
refinance such debt or face default. There is no guarantee that
we would be able to refinance debt on favorable terms, or at
all. This total indebtedness includes $249,996 in aggregate
principal amount of 2.75% senior convertible debentures
that we issued in 2001. On December 1, 2011 and
December 1, 2016, and upon the occurrence of certain
fundamental corporate changes, holders of the 2.75% senior
convertible debentures may require us to purchase their
debentures. At that time, the purchase price may be paid in
cash, shares of common stock or a combination of the two, at our
discretion, provided that we will pay accrued and unpaid
interest in cash. We may not have sufficient cash at that time
to make the required repurchases and may be required to settle
in shares of common stock.
We previously issued warrants that provide the holder with an
option through January 2008 to sell all of these warrants to us
for a price to be paid, at our election, of either $100,000 in
cash or $110,000 in our common stock, such stock being valued at
the time of the exercise of the option. Should we be required to
settle these warrants under this option, we believe that we will
have adequate funds to settle in cash if necessary. However, we
may not have sufficient funds at that time to make the required
payment and may be required to settle the warrants in stock.
This excerpt taken from the HAS 10-K filed Mar 9, 2005. We rely on external financing, including our credit facilities and accounts receivable securitization facility, to fund our operations. If we were unable to obtain or service such financing, or if the restrictions imposed by such financing were too burdensome, our business would be harmed. Due to the seasonal nature of our business, in order to meet our working capital needs, particularly those in the third and fourth quarters, we rely on our revolving credit facility and our other credit facilities for working capital. We currently have an amended and restated revolving credit agreement, which provides for a $350 million revolving credit facility. The amount available for borrowing under this facility will be reduced by $50 million effective March 31, 2005, and by a further $50 million effective November 30, 2005. If we fail to maintain certain financial ratios or if our credit rating drops below BB at Standard & Poor's or Fitch ratings or Ba3 at Moody's ratings, this facility, which is currently unsecured, would become secured by substantially all of our domestic inventory as well as certain of our intangible assets. The credit agreement contains certain restrictive covenants setting forth minimum cash flow and coverage requirements, and a number of other limitations, including restrictions on capital expenditures, investments, acquisitions, share repurchases, incurrence of indebtedness and dividend payments. These restrictive covenants may limit our future actions, and financial, operating and strategic flexibility. In addition, our financial covenants were set at the time we entered into our credit facility. Our performance and financial condition may not meet our original expectations, causing us to fail to meet such financial covenants. If we were unable to meet our financial covenants, or if we failed to comply with other covenants in our credit facility, we could face significant negative consequences. As an additional source of working capital and liquidity, we currently have a $250 million three-year trade accounts receivable securitization program which expires in December 2006. Under this program, we sell on an ongoing basis, substantially all of our U.S. dollar denominated trade accounts receivable to a bankruptcy remote special purpose entity. Under this facility, the special purpose entity is able to sell, on a revolving basis, undivided ownership interests in the eligible receivables to bank conduits. We retain a subordinated interest and servicing rights to those eligible receivables sold under the facility. During the term of the facility, we must maintain certain performance ratios. If we fail to maintain these ratios, we could be prevented from accessing this cost-effective source of working capital and short-term financing. We believe that our cash flow from operations, together with our cash on hand and access to existing credit facilities and our accounts receivable securitization facility, are adequate for current and planned needs in 2005. However, our actual experience may differ from these expectations. 14 Factors that may lead to a difference include, but are not limited to, the matters discussed herein, as well as future events that might have the effect of reducing our available cash balance, such as unexpected material operating losses or increased capital or other expenditures, as well as increases in inventory or accounts receivable that are ineligible for sale under our securitization facility, or future events that may reduce or eliminate the availability of external financial resources. We also may choose to finance our capital needs, from time to time, through the issuance of debt securities. Our ability to issue such securities on satisfactory terms, if at all, will depend on the state of our business and financial condition, any ratings issued by major credit rating agencies, market interest rates, and the overall condition of the financial and credit markets at the time of the offering. The condition of the credit markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future. Variations in these factors could make it difficult for us to sell debt securities or require us to offer higher interest rates in order to sell new debt securities. The failure to receive financing on desirable terms, or at all, could damage our ability to support our future operations or capital needs or engage in other business activities. As of December 26, 2004, we had approximately $622.2 million of total principal amount of indebtedness outstanding. If we are unable to generate sufficient available cash flow to service our outstanding debt we would need to refinance such debt or face default. There is no guarantee that we would be able to refinance debt on favorable terms, or at all. This total indebtedness includes the $250 million in aggregate principal amount of 2.75% senior convertible debentures which we issued in 2001. On December 1, 2005, December 1, 2011 and December 1, 2016, and upon the occurrence of certain fundamental corporate changes, holders of the 2.75% senior convertible debentures may require us to purchase their debentures. At that time, the purchase price may be paid in cash, shares of common stock or a combination of the two, at our discretion, provided that we will pay accrued and unpaid interest in cash. Our current intent is to settle in cash any puts exercised in the future. However, we may not have sufficient funds at that time to make the required repurchases. We previously issued warrants that provide the holder with an option through January 2008 to sell all of these warrants to us for a price to be paid, at our election, of either $100 million in cash or $110 million in our common stock, such stock being valued at the time of the exercise of the option. Should we be required to settle these warrants under this option, we believe that we will have adequate funds to settle in cash if necessary. However, we may not have sufficient funds at that time to make the required payment and may be required to settle the warrants in stock. 15 | EXCERPTS ON THIS PAGE:
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