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Long-term Debt and Letters of Credit
3 Months Ended
Apr. 04, 2022
Debt Disclosure [Abstract]  
Long-term Debt and Letters of Credit

(8) Long-term Debt and Letters of Credit

The following table summarizes the long-term debt of the Company as of April 4, 2022 and January 3, 2022:

 

 

Interest Rate as of

April 4, 2022

 

 

Principal

Outstanding

as of

April 4, 2022

 

 

Interest Rate as of

January 3, 2022

 

 

Principal

Outstanding

as of

January 3, 2022

 

 

 

(In thousands)

 

Senior Notes due March 2029

 

 

4.00

 

%

$

500,000

 

 

 

4.00

 

%

$

500,000

 

Term Loan due September 2024

 

 

2.93

 

 

 

405,879

 

 

 

2.60

 

 

 

405,879

 

Asia ABL Revolving Loan due June 2024

 

 

1.83

 

 

 

30,000

 

 

 

1.50

 

 

 

30,000

 

 

 

 

 

 

 

 

935,879

 

 

 

 

 

 

 

935,879

 

Less: Long-term debt unamortized discount

 

 

 

 

 

 

(555

)

 

 

 

 

 

 

(607

)

Long-term debt unamortized debt

issuance costs

 

 

 

 

 

 

(7,114

)

 

 

 

 

 

 

(7,454

)

 

 

 

 

 

 

 

928,210

 

 

 

 

 

 

 

927,818

 

Less: current maturities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, less current maturities

 

 

 

 

 

$

928,210

 

 

 

 

 

 

$

927,818

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt Covenants

Borrowings under the Senior Notes due 2029 and Term Loan Facility are subject to certain affirmative and negative covenants, including limitations on indebtedness, corporate transactions, investments, dispositions, and share payments.

Under the occurrence of certain events, the U.S. Asset-Based Lending Credit Agreement (U.S. ABL) and Asia Asset-Based Lending Credit Agreement (Asia ABL) (collectively, the ABL Revolving Loans), are subject to various financial covenants, including leverage and fixed charge coverage ratios.

Debt Issuance and Debt Discount

As of April 4, 2022 and January 3, 2022, remaining unamortized debt discount and debt issuance costs for the Senior Notes due 2029 and Term Loan Facility are as follows:

 

 

 

As of April 4, 2022

 

 

As of January 3, 2022

 

 

Debt

Issuance Costs

 

 

Debt

Discount

 

 

Effective

Interest Rate

 

 

Debt

Issuance Costs

 

 

Debt

Discount

 

 

Effective

Interest Rate

 

 

 

 

(In thousands, except interest rates)

Senior Notes due March 2029

 

$

5,280

 

 

$

 

 

 

4.18

 

%

$

5,444

 

 

$

 

 

 

4.18

 

%

Term Loan due September 2024

 

 

1,834

 

 

 

555

 

 

 

4.66

 

 

 

2,010

 

 

 

607

 

 

 

4.66

 

 

 

 

$

7,114

 

 

$

555

 

 

 

 

 

 

$

7,454

 

 

$

607

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The above debt discount and debt issuance costs are recorded as a reduction of the debt and are amortized into interest expense using an effective interest rate over the duration of the debt.

Remaining unamortized debt issuance costs for the ABL Revolving Loans of $1,214 and $1,355 as of April 4, 2022 and January 3, 2022, respectively, are included in other non-current assets and are amortized to interest expense over the duration of the ABL Revolving Loans using the straight-line method of amortization.

As of April 4, 2022, the remaining weighted average amortization period for all unamortized debt discount and debt issuance costs was 5.1 years.

Loss on Extinguishment of Debt

During the quarter ended March 29, 2021, the Company recognized losses of $15,217 associated with the premium paid on extinguishment of debt and the write-off of the remaining unamortized debt issuance costs as a result of the repayment of the remaining outstanding balance of the Senior Notes due 2025.