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Note 5 - Long-term Debt

6 Months Ended

Jul. 02, 2022

On May 17, 2019, we entered into a credit agreement (the “Current Credit Agreement”), which provides for a five-year secured term loan facility in an aggregate principal amount of $175.0 million and a five-year secured revolving loan facility in an aggregate principal amount of up to $75.0 million. Details of the term loan and the revolving loan (collectively, "long-term debt"), including the basis for interest, payment terms, and covenants are described in the Current Credit Agreement.

During the first six months of fiscal 2022, we paid required quarterly installments totaling $8.8 million on our long-term debt. The fair value of our long-term debt approximates the carrying value, which is reflected in our Consolidated Balance Sheets as follows:

	*July 2,*			*January 1,*
(In thousands)	*2022*			*2022*
Principal amount	$	150,000		$	158,750
Unamortized original issuance discount and debt costs		(649	)		(817	)
Less: Current portion of long-term debt		(17,192	)		(17,173	)
Long-term debt, net of current portion and unamortized debt issue costs	$	132,159		$	140,760

As of July 2, 2022, the effective interest rate on the term loan was 3.13%, and the effective interest rate on the revolving loan was 2.92%. We pay a commitment fee of 0.20% on the unused portion of the revolving loan. Interest expense related to our long-term debt was included in Interest expense on our Consolidated Statements of Operations as follows:

	*Three Months Ended*				*Six Months Ended*
	*July 2,*		*July 3,*		*July 2,*		*July 3,*
(In thousands)	*2022*		*2021*		*2022*		*2021*
Contractual interest	$	800	$	588	$	1,362	$	1,185
Amortization of original issuance discount and debt costs		83		92		168		184
Total interest expense related to long-term debt	$	883	$	680	$	1,530	$	1,369

Expected future principal payments are based on the schedule of required quarterly installments. As of July 2, 2022, expected future principal payments on our long-term debt were as follows:

Fiscal year	(in thousands)
2022 (Remaining 2 quarters)		8,750
2023		17,500
2024		123,750
	$	150,000