This excerpt taken from the LTEC 10-K filed Mar 31, 2005.
LOUD Technologies Inc., a Washington corporation incorporated on November 16, 1988 under the name Mackie Designs Inc.; engineers, manufactures and markets professional audio reproduction and recording equipment and software under the brand names Mackie, TAPCO, SIA, EAW and EAW Commercial. We changed our name to LOUD Technologies Inc. on September 15, 2003.
Our primary products include analog mixers, sound reinforcement speakers, professional loudspeaker systems, installed paging and music distribution systems, preamplifiers, power amplifiers, digital audio workstations (DAW) and A/V software control surfaces, digital mixers, i/o devices and acoustic test and measurement software. These products are used in a variety of applications, including home and commercial recording studios, live performances and fixed installations of all sizes.
On February 21, 2003, we finalized an agreement with Sun Mackie, an affiliate of Sun Capital Partners, Inc., a private investment firm, whereby Sun Mackie, purchased approximately 14.4 million shares of our common stock for $10.0 million. Sun Mackie acquired approximately 7.4 million of these shares from certain selling shareholders. It acquired approximately 7.0 million newly issued shares directly from the Company for approximately $6.3 million. Net proceeds after transaction related costs were approximately $3.6 million. In March 2003, Sun Mackie provided $4.0 million for a note payable and warrants to purchase 1.2 million shares of common stock at $0.01 per share. In August 2004, we executed an Exchange Agreement whereby we exchanged our entire debt to Sun Mackie for 2,480,155 shares of common stock valued at $1.95 per share. At December 31, 2004, 16,850,635 shares, representing 76.1% of our outstanding common stock, was owned by affiliates of Sun Capital.
On March 31, 2003, we finalized a new Loan and Security Agreement that provides for a revolving line of credit of up to $26.0 million and a term loan of $2.5 million with a new lender. We executed Loan Amendment and Waiver Agreements in April, August and October 2004, which eased our financial covenants and reduced the gross amount of the line from $26.0 million to $25.0 million. In addition, on March 31, 2003, we finalized a three-year subordinated loan of $11.0 million with our former principal U.S. lender.
On March 4, 2005, we acquired 100% of the shares of St. Louis Music, Inc. (SLM), a Missouri-based manufacturer, distributor and importer of branded musical instruments and professional audio products for cash and 396,792 shares of common stock totaling $38.4 million plus estimated transaction costs of approximately $1.5 million for a total purchase price of approximately $39.9 million. We and Sun Capital Partners III QP, LP, an affiliate of Sun Capital Partners, provided a guaranty of the payment of certain post-closing cash consideration to the shareholders of St. Louis Music (SLM). In addition,
Sun Capital Partners III QP, LP has guaranteed a $40 million revolving short-term demand credit facility provided to SLM Merger Corp., an indirect wholly owned subsidiary formed for this acquisition, to finance the acquisition of SLM and for future working capital. Additional information regarding this transaction can be found in our Current Report on Form 8-K dated March 7, 2005 which is incorporated by this reference.
SLM was a family owned, 82 year old, manufacturer, distributor and importer of branded musical instruments, accessories and equipment. SLM is headquartered in St. Louis, MO with a manufacturing location in Yellville, AR. SLM had 306 employees at December 31, 2004. SLMs products include: Crate Amplifiers (mid-to high-end lead, bass, acoustic and keyboard amplifiers made in Asia and U.S.); Ampeg Amplifiers (professional grade bass amplifiers); SLM Marketplace (division which sells proprietary and competitive accessory products); Alvarez Guitars (mid-to high-end acoustic guitars with the Alvarez and Alvarez-Yairi lines); Knilling Instruments (orchestral string instruments including violins, violas and cellos); and Crate Audio (low-end sound equipment).
Unless specifically referenced, the information included in this Annual Report on Form 10-K does not include St. Louis Music.
MACKIE, the running man figure, TAPCO, EAW, SIA, and EAW Commercial, are registered trademarks or common law trademarks of LOUD Technologies Inc. To the extent our trademarks are unregistered, we are unaware of any conflicts with trademarks owned by third parties. This document also contains names and marks of other companies.
Our website address is www.loudtechinc.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports are available free of charge on our website as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.