Note 9 - Long-term Debt

12 Months Ended

Jul. 03, 2016

Note 9. Long-Term Debt

The Company

’s current and long-term debt consists of the following:

	July 3, 2016		June 28, 2015
	(in thousands)

Revolver (1)	$	-	$	-
Term Loan (1)		117,563		131,813
Bank loan (2)		-		293
Total debt		117,563		132,106
Less: current maturities of long-term debt		19,594		14,543
Long-term debt	$	97,969	$	117,563

(1)

In order to finance the Harry & David acquisition, on September 30, 2014, the Company entered into a Credit Agreement

with JPMorgan Chase Bank as administrative agent, and a group of lenders

(the “2014 Credit Facility”), consisting of a $142.5 million five-year term loan (the “Term Loan”) with a maturity date of September 30, 2019, and a co-terminus revolving credit facility (the “Revolver”), with a seasonally adjusted limit ranging from $100.0 to $200.0 million, which may be used for working capital (subject to applicable sublimits) and general corporate purposes. The Term Loan is payable in 20 quarterly installments of principal and interest beginning in December 2014, with escalating principal payments at the rate of 10% in years one and two, 15% in years three and four, and 20% in year five, with the remaining balance of $42.75 million due upon maturity. Upon closing of the acquisition, the Company borrowed $136.7 million under the Revolver to repay amounts outstanding under the Company’s and Harry & David’s previous credit agreements, as well as to pay acquisition-related transaction costs. There were no amounts outstanding under the Revolver as of July 3, 2016 or June 28, 2015.

The 2014 Credit Facility requires that while any borrowings are outstanding the Company comply with certain financial and non-financial covenants, including the maintenance of certain financial ratios. The Company was in compliance with these covenants as of July 3, 2016. Outstanding amounts under the 2014 Credit Facility bear interest at the Company

’s option at either: (i) LIBOR, plus a spread of 175 to 250 basis points, as determined by the Company’s leverage ratio, or (ii) ABR, plus a spread of 75 to 150 basis points. The 2014 Credit Agreement is secured by substantially all of the assets of the Company and the Subsidiary Guarantors.

Future principal payments under the term loan are as follows: $19.6 million

– 2017, $21.4 million – 2018, $26.7 million – 2019 and $49.9 million– 2020.

(2)

Bank loan assumed through the Company

’s acquisition of a majority interest in iFlorist. The Company repaid this loan during the quarter ended December 27, 2015.