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Long-Term Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Long-Term Debt LONG-TERM DEBT
 
Long-term debt consisted of the following:

December 31, 2023January 1, 2023
Outstanding Principal
Interest Rate(1)
Outstanding Principal
Interest Rate(1)
(in thousands)(in thousands)
Syndicated Credit Facility:
Revolving loan borrowings$— — %$24,250 5.29 %
Term loan borrowings121,658 6.61 %202,082 5.84 %
Total borrowings under Syndicated Credit Facility121,658 6.61 %226,332 5.78 %
5.50% Senior Notes due 2028300,000 5.50 %300,000 5.50 %
 
Total debt421,658 526,332 
Less: Unamortized debt issuance costs(4,445)(6,118)
 
Total debt, net417,213 520,214 
Less: Current portion of long-term debt(8,572)(10,211)
 
Total long-term debt, net$408,641 $510,003 

(1) Represents the weighted average rate of interest for borrowings under the Syndicated Credit Facility and the stated rate of interest for the 5.50% Senior Notes due 2028, without the effect of debt issuance costs.

Syndicated Credit Facility

The Company’s 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. At December 31, 2023, the Facility provided to the Company and certain of its subsidiaries a multicurrency revolving loan facility up to $300.0 million, as well as other U.S. denominated and multicurrency term loans. At December 31, 2023, the Company had available borrowing capacity of $298.4 million under the revolving loan facility.

Significant Facility Amendments

On December 9, 2021, the Company entered into a fourth amendment to its Facility. The fourth amendment provided for, among other changes, the following amendments to the Facility, which became effective on December 16, 2021:

•amendments to replace the LIBOR interest rate benchmark applicable to loans and other extensions of credit under the Facility denominated in British Pounds sterling and Euros with specified successor benchmark rates;
•the amendment of certain provisions related to the implementation, use and administration of successor benchmark rates and to set forth certain borrowing requirements; and
•amendments to provide for the case where any interest rate benchmark in the future ceases to be available.

On October 14, 2022, the Company entered into a fifth amendment to its Facility. The fifth amendment provided for, among other changes, the following amendments to the Facility:

•the amendment of the maturity date of the Facility to October 2027; and
•amendments to replace the LIBOR benchmark interest rates applicable to all loans denominated in U.S. dollars with the SOFR benchmark interest rates.
In connection with the fifth amendment, the Company recognized a loss on extinguishment of debt of $0.1 million within interest expense in the consolidated statement of operations and recorded approximately $1.0 million of debt issuance costs. Of this amount, approximately $0.4 million of debt issuance costs associated with term loan borrowings was recorded as a reduction of long-term debt, and approximately $0.7 million of debt issuance costs associated with revolving loan borrowings was recorded in other assets in the consolidated balance sheets.

Interest Rates and Fees
 
Interest on base rate loans is charged at varying rates computed by applying a margin ranging from 0.25% to 2.00%, 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 are charged at varying rates computed by applying a margin ranging from 1.25% to 3.00% 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 ranging from 0.20% to 0.40% 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.

Fees for commercial letters of credit are computed as 1.00% per annum of the amount available to be drawn under such letters of credit. Fees for standby letters of credit are charged at varying rates computed by applying a margin ranging from 1.25% to 3.00% per annum of the amount available to be drawn under such standby letters of credit, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

Covenants
 
The Facility contains standard and customary covenants for agreements of this type, including various reporting, affirmative and negative covenants. Among other things, these covenants limit the Company’s and its subsidiaries’ ability to:
 
•create or incur liens on assets;
•make acquisitions of or investments in businesses (in excess of certain specified amounts);
•engage in any material line of business substantially different from the Company’s current lines of business;
•incur indebtedness or contingent obligations;
•sell or dispose of assets (in excess of certain specified amounts);
•pay dividends or repurchase the Company’s stock (in excess of certain specified amounts);
•repay other indebtedness prior to maturity unless the Company meets certain conditions; and
•enter into sale and leaseback transactions.
 
The Facility also requires the Company to remain in compliance with the following financial covenants as of the end of each fiscal quarter, based on the Company’s consolidated results for the year then ended:
 
•Consolidated Secured Net Leverage Ratio: Must be no greater than 3.00:1.00.
•Consolidated Interest Coverage Ratio: Must be no less than 2.25:1.00.

Events of Default
 
If the Company breaches or fails to perform any of the affirmative or negative covenants under the Facility, or if other specified events occur (such as a bankruptcy or similar event or a change of control of Interface, Inc. or certain subsidiaries, or if the Company breaches or fails to perform any covenant or agreement contained in any instrument relating to any of the Company’s other indebtedness exceeding $20 million), after giving effect to any applicable notice and right to cure provisions, an event of default will exist. If an event of default exists and is continuing, the lenders’ Administrative Agent may, and upon the written request of a specified percentage of the lender group shall:
 
•declare all commitments of the lenders under the facility terminated;
•declare all amounts outstanding or accrued thereunder immediately due and payable; and
•exercise other rights and remedies available to them under the agreement and applicable law.
Collateral
 
Pursuant to a Second Amended and Restated Security and Pledge Agreement, the Facility is secured by substantially all of the assets of the Company and its domestic subsidiaries (subject to exceptions for certain immaterial subsidiaries), including all of the stock of the Company’s domestic subsidiaries and up to 65% of the stock of its first-tier material foreign subsidiaries. If an event of default occurs under the Facility, the lenders’ Administrative Agent may, upon the request of a specified percentage of lenders, exercise remedies with respect to the collateral, including, in some instances, foreclosing mortgages on real estate assets, taking possession of or selling personal property assets, collecting accounts receivable, or exercising proxies to take control of the pledged stock of domestic and first-tier material foreign subsidiaries.

As of both December 31, 2023 and January 1, 2023, the Company had $1.6 million in letters of credit outstanding under the Facility.
 
Under the Facility, the Company is required to make quarterly amortization payments of the term loan borrowings. The amortization payments 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.
 
Senior Notes due 2028

As of December 31, 2023, the Company had $300.0 million of Senior Notes outstanding. 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.

Redemption

On or after December 1, 2023, the Company may redeem the Senior Notes, in whole or in part, at any time at the redemption prices listed below, plus accrued and unpaid interest, if any, to (but excluding) the redemption date, if redeemed during the 12-month period commencing on December 1 of the years set forth below:

PeriodRedemption Price
2023102.750 %
2024101.375 %
2025 and thereafter100.000 %

In addition, the Company had the option to redeem up to 35% of the aggregate principal amount of the Senior Notes before December 1, 2023 with the proceeds of certain equity offerings at a redemption price of 105.50%, plus accrued and unpaid interest, if any, to (but excluding) the redemption date. The Company also had the option to redeem all or a part of the Senior Notes before December 1, 2023, at a price equal to 100% of the principal amount plus accrued and unpaid interest, if any, to (but excluding) the redemption date, plus a make-whole premium. The Company did not elect to redeem the Senior Notes, in whole or in part, before December 1, 2023.

If the Company experiences a change of control, the Company will be required to offer to purchase the Senior Notes at 101% of their principal amount, plus accrued and unpaid interest to (but excluding) the date of repurchase.
Covenants

The indenture governing the Senior Notes contains standard and customary covenants for agreements of this type, including various reporting, affirmative and negative covenants. Among other things, these covenants limit the Company’s and its subsidiaries’ ability to:

•incur additional indebtedness;
•declare or pay dividends, redeem stock or make other distributions to shareholders;
•make investments;
•create liens on their assets or use their assets as security in other transactions;
•enter into mergers, consolidations or sales, transfers, leases or other dispositions of all or substantially all of the Company’s assets;
•enter into certain transactions with affiliates; and
•sell or transfer certain assets.

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.

Events of Default

If the Company breaches or fails to perform any of the affirmative or negative covenants under the indenture governing the Senior Notes, or if other specified events occur (such as a bankruptcy or similar event), after giving effect to any applicable notice and right to cure provisions, an event of default will exist. If an event of default exists and is continuing, the terms of the indenture permit the trustee or the holders of at least 25% in principal amount of outstanding Senior Notes to declare the principal, premium, if any, and accrued but unpaid interest on all the Senior Notes to be due and payable.
 
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. These fees are amortized straight-line, which approximates the effective interest method, and over the life of the outstanding borrowing, the debt balance will increase by the same amount as the fees that are amortized. As of December 31, 2023 and January 1, 2023, the unamortized debt issuance costs recorded as a reduction of long-term debt were $4.4 million and $6.1 million, respectively. Expenses related to such costs for the years 2023, 2022 and 2021 amounted to $1.7 million, $1.2 million, and $1.6 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 $1.4 million and $1.8 million, as of December 31, 2023 and January 1, 2023, respectively. These amounts are included in other assets in the Company’s consolidated balance sheets. The Company amortizes these costs over the life of the related debt. Expenses related to such costs amounted to $0.4 million for each of the years 2023, 2022 and 2021.
 
Future Maturities
 
The aggregate maturities of borrowings for each of the five fiscal years subsequent to 2023 are as follows:
 
Fiscal YearAmount
 (in thousands)
2024$8,572 
20258,572 
20268,572 
202795,942 
2028300,000 
Total debt$421,658 
Total long-term debt in the consolidated balance sheets includes a reduction for unamortized debt issuance costs of $4.4 million which are excluded from the maturities table above.