1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________ TO
___________________.
Commission File Number 333-42085
TRANSWESTERN PUBLISHING COMPANY LLC
(Exact name of registrant as specified in its charter)
DELAWARE 33-0778740
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
----------------
8344 CLAIREMONT MESA BOULEVARD
SAN DIEGO, CALIFORNIA 92111
(Address of principal executive offices) (Zip Code)
(858) 467-2800
(Registrant's telephone number, including area code)
Indicate by check mark whether each registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
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2
TRANSWESTERN PUBLISHING COMPANY LLC
FORM 10-Q INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2001 (unaudited) and
December 31, 2000 3
Consolidated Statements of Operations for the Three Months Ended
March 31, 2001 (unaudited) and 2000 (unaudited) 4
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2001 (unaudited) and 2000 (unaudited) 5
Notes to Unaudited Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
3
TRANSWESTERN PUBLISHING COMPANY LLC
CONSOLIDATED BALANCE SHEETS
(in thousands)
MARCH 31, DECEMBER 31,
2001 2000
--------- ---------
(UNAUDITED)
ASSETS
Current assets:
Cash $ 3,285 $ 1,961
Trade receivable, (less allowance for doubtful accounts of $10,233
at March 31, 2001 and $10,419 at December 31, 2000) 47,584 48,988
Deferred directory costs 14,213 11,848
Other current assets 1,358 1,334
--------- ---------
Total current assets 66,440 64,131
Non-current assets:
Property, equipment and leasehold improvements, net 4,064 4,238
Acquired intangibles, net 89,477 90,033
Other assets, primarily debt issuance costs, net 7,371 7,736
--------- ---------
Total non-current assets 100,912 102,007
--------- ---------
Total assets $ 167,352 $ 166,138
========= =========
LIABILITIES AND MEMBER DEFICIT
Current liabilities:
Accounts payable $ 7,292 $ 9,893
Salaries and benefits payable 4,000 5,378
Accrued acquisition costs 1,585 2,095
Accrued interest 5,951 2,715
Other accrued liabilities 971 810
Customer deposits 20,131 17,449
Current portion, long-term debt 2,141 2,041
--------- ---------
Total current liabilities 42,071 40,381
Long-term debt:
Series D 9 5/8% Senior Subordinated Notes 141,331 141,381
Senior credit facility Term A Loan 62,242 62,678
Senior credit facility Term B Loan 39,600 39,700
Revolving loan 27,800 22,500
Acquisition debt 1,595 1,595
--------- ---------
Total non-current liabilities 272,568 267,854
--------- ---------
Total liabilities 314,639 308,235
--------- --------
Member deficit (147,287) (142,097)
--------- ---------
Total liabilities and member deficit $ 167,352 $ 166,138
========= =========
See accompanying notes.
4
TRANSWESTERN PUBLISHING COMPANY LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands)
THREE MONTHS ENDED
MARCH 31
---------------------
2001 2000
-------- --------
Net revenue $ 40,678 $ 34,936
Cost of revenues 8,327 7,004
-------- --------
Gross profit 32,351 27,932
Operating expenses:
Sales and marketing 19,463 15,708
General and administrative 11,793 10,306
-------- --------
Total operating expenses 31,256 26,014
-------- --------
Income from operations 1,095 1,918
Other income, net 94 10
Interest expense (6,377) (6,201)
-------- --------
Net loss $ (5,188) $ (4,273)
======== ========
Net loss per Member unit $ (5,188) $ (4,273)
======== ========
See accompanying notes.
5
TRANSWESTERN PUBLISHING COMPANY LLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
THREE MONTHS ENDED
MARCH 31,
2001 2000
-------- --------
OPERATING ACTIVITIES
Net loss $ (5,188) $ (4,273)
Adjustments to reconcile net loss to cash provided by
operating activities:
Depreciation and amortization 7,527 6,385
Amortization of deferred debt issuance costs 365 325
Provision for doubtful accounts 4,291 3,510
Changes in operating assets and liabilities, excluding the effects
of acquisitions:
Trade receivables 1,300 293
Write-off of doubtful accounts (4,477) (3,440)
Recoveries of doubtful accounts 290 299
Deferred directory costs (2,365) (694)
Other current assets (24) 144
Accounts payable (2,601) (1,175)
Accrued liabilities (1,729) (3,658)
Accrued interest 3,236 3,346
Customer deposits 2,682 1,522
-------- --------
Cash provided by operating activities 3,307 2,584
INVESTING ACTIVITIES
Purchase of property, equipment and leasehold improvements (143) (215)
Acquisition of directories (6,704) (10,044)
Increase in other assets -- (714)
-------- --------
Cash used for investing activities (6,847) (10,973)
FINANCING ACTIVITIES
Borrowings under long-term debt agreements:
Revolving credit facility 15,300 14,200
Repayments of long-term debt
Revolving credit facility (10,000) (4,500)
Senior term loans (436) (436)
-------- --------
Cash provided by financing activities 4,864 9,264
-------- --------
Net increase in cash 1,324 875
Cash at beginning of period 1,961 1,167
-------- --------
Cash at end of period $ 3,285 $ 2,042
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 2,825 $ 2,490
======== ========
See accompanying notes.
6
TRANSWESTERN PUBLISHING COMPANY LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLAR AMOUNTS ARE IN THOUSANDS)
1. GENERAL
The accompanying unaudited consolidated financial statements include the
accounts of TransWestern Publishing Company LLC (the "Company") and its wholly
owned subsidiary, Target Directories of Michigan, Inc. All significant inter-
company transactions have been eliminated. The Company is an independent yellow
page directory publisher and is a wholly owned subsidiary of TransWestern
Holdings L.P. (the "Partnership").
These financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC") and, in the
opinion of management, reflect all adjustments necessary to present fairly the
financial position, results of operations and cash flows for the periods
presented in conformity with generally accepted accounting principles. All
adjustments were of a normal recurring nature. All material intercompany
balances and transactions have been eliminated. These financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Form 10-K for the fiscal year ended
December 31, 2000. The 10-K is available on the Internet at http://www.sec.gov.
7
TRANSWESTERN PUBLISHING COMPANY LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLAR AMOUNTS ARE IN THOUSANDS)
2. FINANCIAL STATEMENT DETAILS
Property, Equipment and Leasehold Improvements
MARCH 31, DECEMBER 31,
2001 2000
----------- -----------
Land and building................................ $ 183 $ 183
Computer and office equipment.................... 7,390 7,310
Furniture and fixtures........................... 1,936 1,881
Leasehold improvements........................... 466 458
--------- ---------
9,975 9,832
Less accumulated depreciation and amortization... (5,911) (5,594)
--------- ---------
$ 4,064 $ 4,238
========= =========
Acquired Intangibles
MARCH 31, DECEMBER 31,
2001 2000
----------- -----------
Customer base.................................. $ 164,375 $ 158,021
Non compete and licensing agreements 3,334 2,984
--------- ---------
Less accumulated amortization.................. (78,232) (70,972)
--------- ---------
Acquired intangibles, net $ 89,477 $ 90,033
========= =========
Other Non-Current Assets
MARCH 31, DECEMBER 31,
2001 2000
----------- -----------
Debt issuance costs............................... $ 11,643 $ 11,642
Less accumulated amortization..................... (4,522) (4,156)
--------- ---------
Debt issuance costs, net $ 7,121 $ 7,486
Investment in Eversave 250 250
--------- ---------
Other assets, net $ 7,371 $ 7,736
========= =========
8
3. DIRECTORY ACQUISITIONS
BRI Publishing, Inc. On January 22, 2001, we purchased certain tangible
and intangible assets of BRI Publishing, Inc. for a total of $0.7 million. We
acquired one directory in the Lafayette, Louisiana area.
Pacific West Yellow Pages. On February 9, 2001, we purchased certain
tangible and intangible assets of Pacific West Yellow Pages for a total of $1.2
million. We acquired three directories in the Sacramento, California area.
Silver Pages, Inc. On March 2, 2001, we purchased certain tangible and
intangible assets of Silver Pages, Inc. for a total of $2.6 million.
We acquired one directory in Northern California and one directory in Nevada.
Rutter Directories, LLC. On March 30, 2001, we purchase certain tangible
and intangible assets of Rutter Directories, LLC for a total of $2.1 million. We
acquired five directories in Indiana.
The acquisitions have been accounted for as asset purchases and accordingly
the purchase prices have been allocated to the tangible and intangible assets
acquired based on their respective fair values at the date of acquisition, as
follows (in thousands):
Customer List $6,216
Non-compete 350
Deferred directory costs 536
Other current and non-current assets 159
Assuming that the above acquisitions had occurred on the first day of the
Company's three month period ended March 31, 2001 and March 31, 2000 the
unaudited pro forma results of operations would be as follows:
Three months ended March 31,
-----------------------------
2001 2000
------------ -----------
(Unaudited)
Net revenues....................................... $41,177 $35,435
Net loss........................................... (5,282) (4,567)
The above pro forma results give effect to pro forma adjustments for the
revenue and related costs, the amortization of acquired intangibles and interest
expense on borrowings that would have been required to fund the acquisitions.
9
TRANSWESTERN PUBLISHING COMPANY LLC
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLAR AMOUNTS ARE IN THOUSANDS)
4. GUARANTEE
Target Directories of Michigan, Inc. ("Target"), which is wholly-owned by
the Company, fully and unconditionally guaranteed the Company's outstanding 9
5/8% Series D Senior Subordinated Notes due 2007 on an unsecured senior
subordinated basis. Target is the Company's only consolidated operating
subsidiary, other than an inconsequential subsidiary which is a co-issuer of
such notes, and has no debt senior to such notes. Separate full financial
statements and other disclosures concerning Target have not been presented
because, in the opinion of management, such information is not material or
meaningful to investors. Target was acquired in July, 1998. Following is
summarized financial information concerning Target.
Three months ended March 31,
---------------------------
2001 2000
---------- --------
(Unaudited)
Statement of Operations:
Net revenues $ 1,104 $ 976
Gross profit 995 869
Operating income 131 36
Net income (loss) 15 (54)
March 31,
2001 2000
---------- --------
Balance Sheet:
Current assets $ 1,371 $ 843
Non-current assets 2,866 4,141
Current liabilities 281 524
Non-current liabilities -- --
5: SUBSEQUENT EVENT
Alliance Media Group, Inc. On April 9, 2001, we purchased certain tangible
and intangible assets of Alliance Media Group for a total of $6.0 million. We
acquired two directories in Kentucky and six directories in Texas.
WorldPages.com, Inc. On April 27, 2001, we agreed to purchase the
outstanding stock and assume the debt of WorldPages.com for approximately $215.0
million. WorldPages.com is a leading provider of print and internet telephone
directories in 42 markets. The purchase is subject to WorldPages.com shareholder
and government approval.
The Alliance Media acquisition has been accounted for as an asset purchase
and accordingly the purchase price has been allocated to the tangible and
intangible assets acquired, with predominately all of the purchase price being
allocated to intangible assets - customer base.
10
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (UNAUDITED)
Overview
As used in this item and throughout this Quarterly Report on Form 10-Q,
"we", "us", and "our" each refer to Holdings and TransWestern collectively.
We recognize net revenues from the sale of advertising placed in each directory
when the completed directory is distributed. Costs directly related to sales,
production, printing and distribution of each directory are capitalized as
deferred directory costs and then matched against related net revenues upon
distribution. All of our other operating costs are recognized during the period
when incurred. As the number of directories increase, the publication schedule
is periodically adjusted to accommodate new books. In addition, changes in
distribution dates are affected by market and competitive conditions and the
staffing level required to achieve the individual directory revenue goals. As a
result, our directories may be published in a month earlier or later than the
previous year which may move recognition of related revenues from one fiscal
quarter or year to another. Year to year results depend on both timing and
performance factors.
Notwithstanding significant monthly fluctuation in net revenues recognized
based on actual distribution dates of individual directories, our bookings and
cash collection activities generally occur at a relatively steady pace
throughout the year. The table below demonstrates that quarterly bookings,
collection of advance payments and total cash receipts, which includes both
advance payments and collections of accounts receivable, generally vary less on
a percentage basis than our net revenues or EBITDA:
---------------------------------------------------------------
2000 2000 2000 2000 2001
---------------------------------------------------------------
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter
------- ------- ------- ------- -------
Net revenues ............... $ 34.9 $ 38.6 $ 43.1 $ 60.7 $ 40.7
EBITDA(a) .................. $ 8.5 $ 12.0 $ 12.8 $ 23.7 $ 8.9
Bookings(b) ................ $ 34.9 $ 43.7 $ 44.1 $ 44.3 $ 49.7
Advance payments ........... $ 17.0 $ 19.7 $ 21.4 $ 20.2 $ 19.8
Total cash receipts(c) ..... $ 34.3 $ 38.7 $ 39.8 $ 41.7 $ 41.2
(a) "EBITDA" is defined as income (loss) before extraordinary item plus interest
expense, and depreciation and amortization and is consistent with the
definition of EBITDA in the indentures relating to the Company's notes and
in the Company's senior credit facility. EBITDA is not a measure of
performance under generally accepted accounting principles (GAAP). EBITDA
should not be considered in isolation or as a substitute for net income,
cash flows from operating activities and other income or cash flow statement
data prepared in accordance with GAAP, or as a measure of profitability or
liquidity. However, management has included EBITDA because it may be used by
certain investors to analyze and compare companies on the basis of operating
performance, leverage and liquidity and to determine a company's ability to
service debt. The Company's definition of EBITDA may not be comparable to
that of other companies.
(b) "Bookings" is defined as the daily advertising orders received from accounts
during a given period and generally occur at a steady pace throughout the
year. Bookings generated by predecessor owners of acquired directories are
excluded.
(c) Total cash receipts includes both advance payments and collections of
accounts receivable.
11
RESULTS OF OPERATIONS
The following table summarizes our results of operations as a percentage of
revenue for the periods indicated:
THREE MONTHS
ENDED MARCH 31,
--------------------------
2001 2000
--------- ---------
Net revenues .................. 100.0% 100.0%
Cost of revenues .............. 20.5 20.0
--------- ---------
Gross profit .................. 79.5 80.0
Sales and marketing ........... 47.8 45.0
General and administrative .... 29.0 29.5
--------- ---------
Income from operations ........ 2.7% 5.5%
========= =========
EBITDA Margin (a), (b) ........ 21.9% 24.3%
========= =========
(a) For a definition of "EBITDA" see the immediately preceding section.
(b) "EBITDA Margin" is defined as EBITDA as a percentage of net revenues.
Management believes that EBITDA margin provides a valuable indication of
the Company's ability to generate cash flows available for debt service.
THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 2000
Net revenues increased $5.8 million, or 16.4%, from $34.9 million in the
three months ended March 31, 2000 to $40.7 million in the same period in 2001.
We published 55 directories in the three months ended March 31, 2001 compared to
51 in the same period in 2000. The net revenue growth was due to $3.1 million
from six new directories, $3.3 million from six directories for which the
publication date moved into the period and growth in the same 43 directories
published during both periods of $3.0 million; offset by $3.6 million of net
revenues associated with eight directories published in the three months ended
March 31, 2000 but not in the same period in 2001.
As a result of a combination of factors, including the addition of new
customers, price increases, increases in the amount of advertising by current
customers and new directory features such as colorization of ads, additional ad
sizes and additional headings, our same book revenue growth for the 43
directories published in both periods was 9.7%.
12
Cost of revenues increased $1.3 million, or 18.9%, from $7.0 million in the
three months ended March 31, 2000 to $8.3 million in the same period in 2001.
The increase was the result of $1.0 million of costs associated with six new
directories published in the three months ended March 31, 2001, $0.5 million in
costs associated with six directories published in the three months ended March
31, 2001, but not in the same period in 2000, and $0.4 million of higher costs
associated with the 43 same directories; offset by $0.7 million of costs
associated with eight directories published during the three months ended March
31, 2000, but not in the same period in 2001. Production support costs increased
$0.1 million in the three months ended March 31, 2001 due to the directories
acquired over the past twelve months.
As a result of the above, gross profit increased $4.4 million, or 15.8%,
from $27.9 million in the three months ended March 31, 2000 to $32.3 million in
the same period in 2001. Gross margin decreased from 80.0% in the three months
ended March 31, 2000 to 79.5% in the same period in 2001 as a result of higher
direct costs on newly acquired directories.
Selling and marketing expenses increased $3.7 million, or 23.9%, from $15.7
million in the three months ended March 31, 2000 to $19.4 million in the same
period in 2001. The increase was attributable to increases of $0.9 million in
sales support costs, $2.0 million in direct sales costs and $0.8 million in
provision for bad debt (which was consistent with the increase in net revenues).
Of the increase in sales support costs of $0.9 million, $0.7 million was
due to sales offices acquired since the first quarter of 2000 and $0.2 million
was due to a general increase in costs associated with personnel and other costs
associated with our field sales offices. The increase in direct sales costs of
$2.0 million was as follows: $1.0 million of additional costs were for the six
new directories, $0.9 million for six directories moving into the period, and
$1.1 million of higher costs associated with the 43 same directories; offset by
$0.9 million of costs associated with eight directories that published in the
three months ended March 31, 2000 but not in the same period in 2001. Direct
sales costs as a percentage of revenue for the same 43 directories published
during both periods increased from 21.1% to 22.4% in the three months ended
March 31, 2001 compared to the same period in 2000.
General and administrative expense increased $1.5 million, or 14.4%, from
$10.3 million for the three months ended March 31, 2000 to $11.8 million for the
same period in 2001. The increase is due to: amortization of acquired customer
base and other intangibles of $1.2 million, an increase in professional service
costs of $0.2 million and an increase in incentive compensation costs of $0.1
million.
As a result of the above factors, income from operations decreased $0.8
million, or 42.9%, from $1.9 million in the three months ended March 31, 2000 to
$1.1 million in the same period in 2001. Income from operations as a percentage
of net revenues decreased from 5.5% in the three months ended March 31, 2000 to
2.7% in the same period in 2001.
Interest expense increased $0.2 million, or 2.8%, from $6.2 million in the
three months ended March 31, 2000 to $6.4 million in the same period in 2001 due
to higher levels of debt partially offset by a decrease in the rates of interest
paid as a result of decreases in Prime and LIBOR rates.
As a result of the above factors, net income decreased $0.9 million, or
21.4%, from a loss of $4.3 million in the three months ended March 31, 2000 to a
loss of $5.2 million in the same period in 2001.
13
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $3.3 million in the three
months ended March 31, 2001 compared to $2.6 million provided in the same period
in 2000. The increase in cash provided by operations was primarily due to higher
collections of accounts receivable.
Net cash used by investing activities was $6.8 million in the three months
ended March 31, 2001, as compared to $11.0 million in the same period in 2000.
Investing activities consist primarily of cash used to acquire directories. In
the three months ended March 31, 2001 $6.7 million was spent to acquire
directories compared to $10.0 million in the same period in the prior year.
Acquisitions made in the three months ended March 31, 2001 are discussed in note
3 of the financial statements included in this Form 10-Q.
Net cash provided by financing activities was $4.9 million in the three
months ended March 31, 2001 as compared to $9.3 million in the same period in
2000. These amounts are borrowings for acquisitions during the quarters, and
decreased as a result of fewer acquisitions during the three months ended March
31, 2001.
In connection with the recapitalization of Holdings in October 1997, we
incurred significant debt. As of March 31, 2001 we had total outstanding long
term indebtedness of $272.6 million, including $141.3 million of Series D 9 5/8%
Senior Subordinated Notes due 2007, (excluding unamortized premium), and $101.8
million of outstanding borrowings under the senior credit facility, $27.8
million of outstanding borrowings under the revolving loan facility, $1.6
million in acquisition related debt, all of which rank senior to the Series D
notes. As of March 31, 2001 the Company had $42.2 million of additional
borrowing availability under its senior credit facility.
Our principal sources of funds are cash flows from operating activities and
available funds under our revolving credit facility. Assuming the successful
implementation of management's business and operating strategy, we believe that
these funds will provide us with sufficient liquidity and capital resources to
meet our current and future financial obligations for the next twelve months,
including the payment of principal and interest on our notes, as well as to
provide funds for our working capital, capital expenditures and other needs. Our
future operating performance will be subject to future economic conditions and
to financial, business and other factors, many of which are beyond our control.
There can be no assurance that such sources of funds will be adequate and that
we will not require additional capital from borrowings or securities offerings
to satisfy such requirements. In addition, we may require additional capital to
fund future acquisitions and there can be no assurance that such capital will be
available.
14
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements
which are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are based on the
beliefs of our management as well as on assumptions made by and information
currently available to us at the time such statements were made. When used in
this Quarterly Report on Form 10-Q, the words "anticipate," "believe,"
"estimate," "expect," "intends" and similar expressions, as they relate to our
company are intended to identify forward- looking statements. Actual results
could differ materially from those projected in the forward-looking statements.
Important factors that could affect our results include, but are not limited to,
(i) our high level of indebtedness; (ii) the restrictions imposed by the terms
of our indebtedness; (iii) the turnover rate amongst our account executives;
(iv) the variation in our quarterly results; (v) risks related to the fact that
a large portion of our sales are to small, local businesses; (vi) our dependence
on certain key personnel; (vii) risks related to the acquisition and start-up of
directories; (viii) risks related to substantial competition in our markets;
(ix) risks related to changing technology and new product developments; (x) the
effect of fluctuations in paper costs; and (xi) the sensitivity of our business
to general economic conditions.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to interest rate risk in connection with the term loans and
and the revolving loans outstanding under our senior credit facility, which bear
interest at floating rates based on LIBOR or the prime rate plus an applicable
borrowing margin. As of March 31, 2001 there was approximately $64.0 million
outstanding under the term A loan (at an interest rate of 7.08% at such time),
$40.0 million under the term B loan (at an interest rate of 8.71% at such time),
and $27.8 million outstanding under the revolving loans ($21.4 million at the
LIBOR rate of 6.83% and $6.4 million at the prime based rate of 8.625% at such
time). Based on such balances, an immediate increase of one percentage point in
the applicable interest rate would cause an increase in interest expense of
approximately $1.3 million on an annual basis. We do not attempt to mitigate
this risk through hedging transactions. All of our sales are denominated in U.S.
dollars, thus we are not subject to any foreign currency exchange risks.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are a party to various litigation matters incidental to the conduct of
our business. Management does not believe that the outcome of any of the
matters in which we are currently involved will have a material adverse effect
on our financial condition or the results of our operations.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
Not applicable
15
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits.
None
(B) Reports on Form 8-K.
None
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on May 10, 2001 on
its behalf by the undersigned thereunto duly authorized.
TRANSWESTERN PUBLISHING COMPANY LLC
(Registrant)
BY: TransWestern Communications Company, Inc.
(Manager)
BY: /s/ Ricardo Puente
--------------------------------------------
Name: Ricardo Puente
Title: President, Chief Executive Officer
and Director (Principal Executive
Officer)
BY: /s/ Joan Fiorito
--------------------------------------------
Name: Joan Fiorito
Title: Vice President, Chief Financial
Officer and Assistant Secretary
(Principal Financial and Accounting
Officer)