Long-Term Debt

6 Months Ended

Jul. 02, 2023

Debt Disclosure [Abstract]

Long-Term Debt

LONG-TERM DEBT

Long-term debt consisted of the following:

	July 2, 2023				January 1, 2023
	Outstanding Principal		Interest Rate(1)		Outstanding Principal		Interest Rate(1)
	(in thousands)				(in thousands)
Syndicated Credit Facility:
Revolving loan borrowings	$	6,994	5.66	%	$	24,250	5.29	%
Term loan borrowings	174,138		6.46	%	202,082		5.84	%
Total borrowings under Syndicated Credit Facility	181,132		6.43	%	226,332		5.78	%
5.50% Senior Notes due 2028	300,000		5.50	%	300,000		5.50	%
Total debt	481,132				526,332
Less: Unamortized debt issuance costs	(5,562)				(6,118)
Total debt, net	475,570				520,214
Less: Current portion of long-term debt	(10,222)				(10,211)
Total long-term debt, net	$	465,348			$	510,003

(1) Represents the stated rate of interest, without the effect of debt issuance costs.

Syndicated Credit Facility

The Company’s Syndicated Credit Facility (the “Facility”) provides to the Company U.S. denominated and multicurrency term loans and provides to the Company and certain of its subsidiaries a multicurrency revolving credit facility. Interest on base rate loans is charged at varying rates computed by applying a margin depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. Interest on SOFR-based and alternative currency loans and fees for letters of credit are charged at varying rates computed by applying a margin over the applicable SOFR rate or alternative currency rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. In addition, the Company pays a commitment fee per annum (depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter) on the unused portion of the Facility.

As of both July 2, 2023 and January 1, 2023, the Company had $1.6 million in letters of credit outstanding under the Facility.

As of both July 2, 2023 and January 1, 2023, the carrying value of the Company’s borrowings under the Facility approximated its fair value as the Facility bears interest rates that are similar to existing market rates. The fair value of borrowings under the Facility is estimated using observable market rates and is considered Level 2 within the fair value hierarchy.

Under the Facility, the Company is required to make quarterly amortization payments of the term loan borrowings, which are due on the last day of the calendar quarter.

The Company is in compliance with all covenants under the Facility and anticipates that it will remain in compliance with the covenants for the foreseeable future.

5.50% Senior Notes due 2028

The 5.50% Senior Notes due 2028 (the “Senior Notes”) bear an interest rate at 5.50% per annum and mature on December 1, 2028. Interest is paid semi-annually on June 1 and December 1 of each year. The Senior Notes are unsecured and are guaranteed, jointly and severally, by each of the Company’s material domestic subsidiaries, all of which also guarantee the obligations of the Company under its Facility.

As of July 2, 2023, the estimated fair value of the Senior Notes was $245.0 million, compared with a carrying value recorded in the Company’s consolidated condensed balance sheet of $296.2 million ($300.0 million excluding $3.8 million of unamortized debt issuance costs). The fair value of the Senior Notes is derived using quoted prices for similar instruments and is considered Level 2 within the fair value hierarchy.

The Company is in compliance with all covenants under the indenture governing the Senior Notes and anticipates that it will remain in compliance with the covenants for the foreseeable future.

Debt Issuance Costs

Debt issuance costs associated with the Company’s Senior Notes and term loans under the Facility are reflected as a reduction of long-term debt in accordance with applicable accounting standards. As these fees are expensed over the life of the outstanding borrowing, the debt balance will increase by the same amount as the fees that are expensed. As of July 2, 2023 and January 1, 2023, the unamortized debt issuance costs recorded as a reduction of long-term debt were $5.6 million and $6.1 million, respectively.

Debt issuance costs related to the issuance of revolving debt, which include underwriting, legal and other direct costs, net of accumulated amortization, were $1.6 million and $1.8 million as of July 2, 2023 and January 1, 2023, respectively. These amounts are included in other assets in the Company’s consolidated condensed balance sheets. The Company amortizes these costs over the life of the related debt.