2.4.0.8060300 - Disclosure - Debt, Capital Leases and Notes Payabletruefalsefalse1falsefalsefalsec20130101to20130630http://www.sec.gov/CIK0001365101duration2013-01-01T00:00:002013-06-30T00:00:001true1us-gaap_DebtDisclosureAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2us-gaap_DebtAndCapitalLeasesDisclosuresTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseverboseLabel1falsefalsefalse00<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><div style="text-align: left;"><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; font-weight: bold; align: right;">3.</td><td style="text-align: left; width: auto; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; font-weight: bold;">Debt, Capital Leases and Notes Payable</td></tr></table></div><div><br /></div><div style="text-align: justify; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Long-term debt, capital leases and notes payable are summarized as follows:</div><div><br /></div><table align="center" border="0" cellpadding="0" cellspacing="0" style="width: 80%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td valign="bottom" style="width: 56%; vertical-align: bottom;"><div> </div></td><td valign="bottom" style="width: 1%; vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"><div style="text-align: center; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; font-weight: bold;">June 30,</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom;"> </td><td colspan="2" style="white-space: nowrap; vertical-align: bottom;"><div style="text-align: center; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; font-weight: bold;">December 31,</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; vertical-align: bottom;"> </td></tr><tr><td valign="bottom" style="padding-bottom: 2px; width: 56%; vertical-align: bottom;"><div> </div></td><td valign="bottom" style="padding-bottom: 2px; width: 1%; vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="border-bottom: #000000 2px solid; vertical-align: bottom;"><div style="text-align: center; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; font-weight: bold;">2013</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="padding-bottom: 2px; width: 1%; vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="border-bottom: #000000 2px solid; vertical-align: bottom;"><div style="text-align: center; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; font-weight: bold;">2012</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; width: 1%; vertical-align: bottom;"> </td></tr><tr><td valign="bottom" style="width: 56%; vertical-align: bottom;"><div> </div></td><td valign="bottom" style="width: 1%; vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"><div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="width: 1%; vertical-align: bottom;"> </td><td colspan="2" valign="bottom" style="vertical-align: bottom;"><div></div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; width: 1%; vertical-align: bottom;"> </td></tr><tr><td valign="bottom" style="background-color: #cceeff; width: 56%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: ''Times New Roman'', Times, serif; margin-left: 7.2pt; font-size: 10pt;">Senior revolving credit facility</div></td><td valign="bottom" style="background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="text-align: left; background-color: #cceeff; width: 1%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">$</div></td><td valign="bottom" style="text-align: right; background-color: #cceeff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">1,952</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="text-align: left; background-color: #cceeff; width: 1%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">$</div></td><td valign="bottom" style="text-align: right; background-color: #cceeff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">7,077</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td></tr><tr><td valign="bottom" style="background-color: #ffffff; width: 56%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: ''Times New Roman'', Times, serif; margin-left: 7.2pt; font-size: 10pt;">Comvest Term loans, net of discount</div></td><td valign="bottom" style="background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="text-align: left; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="text-align: right; background-color: #ffffff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">17,006</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="text-align: left; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="text-align: right; background-color: #ffffff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">14,145</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td></tr><tr><td valign="bottom" style="padding-bottom: 2px; background-color: #cceeff; width: 56%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: ''Times New Roman'', Times, serif; margin-left: 7.2pt; font-size: 10pt;">Notes payable and capital leases</div></td><td valign="bottom" style="padding-bottom: 2px; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">37</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="padding-bottom: 2px; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">44</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td></tr><tr><td valign="bottom" style="background-color: #ffffff; width: 56%; vertical-align: bottom;"><div> </div></td><td valign="bottom" style="background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="text-align: left; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="text-align: right; background-color: #ffffff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">18,995</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="text-align: left; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="text-align: right; background-color: #ffffff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">21,266</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td></tr><tr><td valign="bottom" style="padding-bottom: 2px; background-color: #cceeff; width: 56%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: ''Times New Roman'', Times, serif; margin-left: 7.2pt; font-size: 10pt;">Less current portion</div></td><td valign="bottom" style="padding-bottom: 2px; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">(16</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; background-color: #cceeff; width: 1%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">)</div></td><td valign="bottom" style="padding-bottom: 2px; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="border-bottom: #000000 2px solid; text-align: left; background-color: #cceeff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="border-bottom: #000000 2px solid; text-align: right; background-color: #cceeff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">(15</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 2px; background-color: #cceeff; width: 1%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">)</div></td></tr><tr><td valign="bottom" style="padding-bottom: 4px; background-color: #ffffff; width: 56%; vertical-align: bottom;"><div style="text-align: left; text-indent: -7.2pt; font-family: ''Times New Roman'', Times, serif; margin-left: 7.2pt; font-size: 10pt;">Long-term debt, notes payable and capital leases, net of current portion</div></td><td valign="bottom" style="padding-bottom: 4px; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="border-bottom: #000000 4px double; text-align: left; background-color: #ffffff; width: 1%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">$</div></td><td valign="bottom" style="border-bottom: #000000 4px double; text-align: right; background-color: #ffffff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">18,979</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="padding-bottom: 4px; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td><td valign="bottom" style="border-bottom: #000000 4px double; text-align: left; background-color: #ffffff; width: 1%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">$</div></td><td valign="bottom" style="border-bottom: #000000 4px double; text-align: right; background-color: #ffffff; width: 9%; vertical-align: bottom;"><div style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">21,251</div></td><td nowrap="nowrap" valign="bottom" style="text-align: left; padding-bottom: 4px; background-color: #ffffff; width: 1%; vertical-align: bottom;"> </td></tr></table><div><br /></div><div style="text-align: left; font-style: italic; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Prior Senior Revolving Credit Facility</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">We entered into a senior revolving credit facility in November 2010 that was amended in April 2011, September 2011, November 2011 and March 2012 ("Prior Senior Revolving Credit Facility").  The Prior Senior Revolving Credit Facility matured on April 30, 2012 and was repaid in full in connection with the closing of the Senior Revolving Credit Facility (as defined below) and the Term Loan (as defined below).  We amortized the remaining amount of deferred loan costs related to the Prior Senior Revolving Credit Facility at maturity.  Interest<font style="font-family: ''Times New Roman'', Times, serif; font-size: 10pt;"> expense related to deferred loan costs amortization for the Prior Senior Revolving Credit Facility totaled $576 and $1,246 for the three and six months ended June 30, 2012.  </font></div><div><br /></div><div style="text-align: left; font-style: italic; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Senior Revolving Credit Facility</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">We entered into a senior revolving credit facility (the "Senior Revolving Credit Facility") on April 30, 2012, as amended on February 21, 2013,  that provides for total borrowing availability of up to $20,000 subject to borrowing base requirements related to our eligible accounts receivable and inventory and subject to a $2,000 reserve requirement. The Senior Revolving Credit Facility has a three and one-half year term and is secured either on a first priority or second priority basis by substantially all of our assets. The term of the Senior Revolving Credit Facility may be extended up to April 30, 2017 so long as the maturity of the Term Loan is extended to at least October 30, 2017. As of June 30, 2013, we had $1,952 in outstanding borrowings at a weighted-average interest rate of 6.0%, with $3,487 in additional availability under the Senior Revolving Credit Facility after giving effect to the borrowing base requirements.</div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;"> </div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Interest on outstanding borrowings under the Senior Revolving Credit Facility is payable at our option at either a floating base rate or a one-, two- or three-month LIBOR rate. We are also required to pay a commitment fee on the unused amount of the commitment under the Senior Revolving Credit Facility. The Senior Revolving Credit Facility contains a limit on capital expenditures of $6,000 for the year ended December 31, 2013 and for each year thereafter.  The limit for capital expenditures may be increased for 2013 and thereafter based upon meeting the fixed charge coverage ratio, as stipulated and defined in the Senior Revolving Credit Facility.  In addition, the Senior Revolving Credit Facility cross-defaults to the Term Loan. Total costs associated with the Senior Revolving Credit Facility were $883, which were capitalized and will be amortized as part of interest expense over the term of the debt.  At June 30, 2013, accumulated amortization related to Senior Revolving Credit Facility deferred loan costs was $292.</div><div><br /></div><div style="text-align: left; font-style: italic; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Comvest Term Loans</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">We entered into a credit and security agreement on April 30, 2012 (the "Credit Agreement") pursuant to which a $15,150 term loan (the "Term Loan") was provided.  The Credit Agreement was amended on November 6, 2012 (the "First Amendment") to contemplate the plan to exit the Flavorstation business (see Note 2) and provide for the classification of the operating results related to the Disposal Group as discontinued operations.  In connection with the amendment, Comvest consented to our sale of inventory and other assets related to the Disposal Group outside the ordinary course of business.  Also in connection with the amendment, we paid Comvest a $150 fee and agreed to certain changes to prepayment penalties and financial covenants.</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">The Credit Agreement was amended on June 14, 2013 (the "Second Amendment") to provide for an additional $3,000 in borrowing under a second term loan (the "Add-On Term Loan", and together with the Term Loan, the "Comvest Term Loans"), adjust the interest rate on the Term Loan, eliminate certain financial covenants and make further adjustments to prepayment penalties.  Under the terms of the Second Amendment, interest on outstanding amounts owed under the Comvest Term Loans is payable at the rate of 12.5% per annum in cash.  At June 30, 2013 the aggregate outstanding balance under the Comvest Term Loans was $18,499.</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">The outstanding balances of the Comvest Term Loans are due and payable in a single installment on April 30, 2016, subject to prepayment in specified circumstances, including sales or dispositions of assets outside the ordinary course of business and sales of equity or debt securities by Primo. The Comvest Term Loans are secured by substantially all of our assets on either a first priority or second priority basis. The first priority assets consist of substantially all of the assets related to our refill services business (See Note 8 for a description of the refill business). The security interest in all of our other assets is subordinate to the security interest securing the Senior Revolving Credit Facility.</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">The Comvest Term Loans contain the following financial covenants: (i) a limit on capital expenditures of $12,000 for the year ended December 31, 2013 and for each year thereafter; (ii) an increasing minimum Adjusted EBITDA  threshold that is measured at the end of each quarter, and (iii) a decreasing total debt to Adjusted EBITDA ratio that is measured at the end of each quarter. Total costs associated with the Comvest Term Loans were $1,124, which were capitalized and will be amortized as part of interest expense over the term of the debt.  At June 30, 2013, accumulated amortization related to the Comvest Term Loans' deferred loan costs was $305.  Costs associated with the Second Amendment consisted of fees paid directly to Comvest and totaled $475.  The costs were reflected as a discount on our debt and will be amortized as part of interest expense over the remaining term of the debt. At June 30, 2013 we were in compliance of all covenants.</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Concurrently with the closing of the Term Loan on April 30, 2012, five of our current directors or stockholders (the "Insider Participants") purchased an aggregate of $1,150 in non-recourse, non-voting, last-out participation interests from the bank providing the Term Loan. These participation interests allow each holder to participate to the extent of such holder's percentage share in the Term Loan and such participations are secured by the same assets as the Term Loan. The Insider Participants include Billy D. Prim, Malcolm McQuilkin and Jack C. Kilgore, all three of whom are current directors of Primo. Mr. Prim is also our Chairman and Chief Executive Officer. Mr. Prim, Mr. McQuilkin and Mr. Kilgore purchased $250, $500 and $50 in participation interests, respectively.</div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;"> </div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">The Term Loan was accompanied by a detachable warrant to purchase 1,731 shares of our common stock, including detachable warrants to purchase 131 shares of our common stock received by the Insider Participants. The warrant is immediately exercisable at an exercise price of $2.30 per share and expires April 30, 2020.  The terms of the warrants issued to the Insider Participants are identical to the terms of the warrant described above. Mr. Prim, Mr. McQuilkin and Mr. Kilgore were issued warrants to purchase 29, 57 and 6 shares of our common stock, respectively.  The initial fair value of the warrants as determined using the Black-Scholes pricing model was $1,108 that resulted in an original issue discount on the Term Loan that will be amortized into interest expense through the maturity of the Term Loan.   For the non-Insider Participants, the exercise price was adjusted to $1.20 as part of the amendment on November 6, 2012.   Due to the price adjustment, $305 was added to the original issue discount on the Term Loan, representing the change in the estimated fair value immediately before and after the modification, and will be amortized into interest expense through the remaining maturity of the Term Loan.  The revised warrant exercise price was set at 150% of the 30 day trailing average stock price.  No changes were made to the warrants we issued to the five directors and stockholders of Primo.</div></div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease.No definition available.false0falseDebt, Capital Leases and Notes PayableUnKnownUnKnownUnKnownUnKnowntruefalsefalseNoteshttp://primowater.com/role/DebtCapitalLeasesAndNotesPayable12