FINANCING ARRANGEMENTS

12 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

FINANCING ARRANGEMENTS

FINANCING ARRANGEMENTS

The Company's financing arrangements consists of the following:

		June 30,
	Maturity Date	2023	2022	2023		2022
	(Fiscal year)	(Interest rate %)		(Dollars in thousands)
Term loan	2026	9.54%	N/A	$	172,268	$	—
Deferred financing fees				(6,471)		—
Term loan, net				165,797		—
Revolving credit facility	2026	9.54%	5.50%	10,000		179,994
Paid-in-kind interest				1,033		—
Total long-term debt, net				$	176,830	$	179,994

In August 2022, the Company amended its credit agreement. The amendment, among other things, converted $180.0 million of the previous $295.0 million revolving credit facility to a new term loan, reduced commitments under the revolving credit facility to $55.0 million, and extended the term of the credit facility from March 26, 2023 to August 31, 2025, with no scheduled amortization prior to maturity. The amendment is accounted for as a modification of debt and any unamortized financing fees that existed at the date of the amendment and new financing fees incurred are amortized through the extended term of the credit facility. At June 30, 2023, the Company had outstanding standby letters of credit under the revolving credit facility of $11.8 million, primarily related to the Company's self-insurance program. As of June 30, 2023, the total liquidity and available credit under the revolving credit facility, as defined by the agreement, were $42.8 and $33.3 million, respectively. As of June 30, 2023, the Company had cash and cash equivalents of $9.5 million and current liabilities of $126.3 million.

The agreement utilizes an interest rate margin that is subject to annual increases. The margin applicable to term secured overnight financing rate (SOFR) loans was 3.875% through March 27, 2023. Effective March 27, 2023, the margin increased to 6.25%, of which 4.25% is paid currently in cash and 2.00% is PIK interest (added to the principal balance and thereafter accruing interest). Effective March 27, 2024, the margin will increase to 7.25%, of which 4.25% will be paid currently in cash and 3.00% will be PIK interest. The margin applicable to base rate loans will be 100 basis points (1.00%) less than the margin applicable to term SOFR loans. Interest expense is recorded based on a weighted average effective interest rate method. The significant assumptions used in the weighted average estimate are the future SOFR rates and debt balance, as well as the length of time the debt will be outstanding. Due to the interest rate increasing over the debt term, the Company recorded more interest expense than interest paid in cash in fiscal year 2023. The related accrued interest of $3.8 million as of June 30, 2023 is included in accrued expenses on the Consolidated Balance Sheets.

The agreement contains typical provisions and financial covenants regarding minimum EBITDA, maximum leverage and minimum fixed-charge coverage and a minimum liquidity threshold of $10.0 million. The Company was in compliance with its covenants and other requirements of the financing arrangements as of June 30, 2023.