Use of Proceeds
We expect that the net proceeds from the sale of our common stock in this
offering will be approximately $133.8 million after deducting underwriting
discounts and commissions and estimated offering expenses payable by us. These
amounts assume the sale of all of our common stock offered by this prospectus.
We intend to use the net proceeds of this offering as follows:
- approximately $85.4 million to repay a portion of our senior term loans;
- approximately $25.5 million to repay a portion of our senior subordinated
loan and to pay related prepayment premiums;
- approximately $6.6 million to make a distribution on the preferred units of
GEEG Holdings, L.L.C. in an aggregate amount equal to the accrued and unpaid
dividends on those units; and
- the balance of approximately $16.3 million for general corporate purposes.
Of the $6.6 million distribution on the preferred units, $3.0 million will be
paid to our affiliates. Affiliates of Harvest Partners, Inc. will receive $2.4
million and members of our management and our directors will receive in the
aggregate $0.6 million.
As of March 31, 2001, our outstanding senior term loans bore interest at rates
ranging from 8.34% to 9.09% per annum and consisted of (1) a $27.7 million term
A loan maturing in July 2006; (2) a $103.8 million term B loan maturing in July
2008; and (3) a $13.9 million term C loan maturing in July 2006. Our senior
subordinated loan has an outstanding principal amount of $67.5 million, matures
in August 2010 and bears interest at the rate of 13.5% per annum. The amounts
borrowed under the term A loan, the term B loan and the senior subordinated
loan financed a portion of the August 2000 recapitalization. We used the term
C loan to partially fund the acquisition of CFI Holdings, Inc. in October 2000.
We intend to refinance any remaining balances on our senior term loans after
the application of the net proceeds of this offering using the proceeds of a
new loan under an amended and restated senior credit facility. Pending
application of the net proceeds as described above, we intend to invest the net
proceeds in short-term, investment-grade, interest-bearing securities.
We will not receive any proceeds from the sale of our common stock, if any, by
the selling stockholders upon the exercise of the underwriters' over-allotment