NOTES PAYABLE | 6 Months Ended |
Jun. 29, 2014 |
NOTES PAYABLE [Abstract] | ' |
NOTES PAYABLE | ' |
15 | NOTES PAYABLE | |
|
Long-term Notes Payable to Banks |
|
On December 5, 2012, we entered into an amended and restated credit agreement for a secured term loan facility and a secured revolving credit facility with initial aggregate commitments of $350,000, including the term loan commitment of $150,000 and the revolving credit facility commitment of $200,000, both of which mature on December 5, 2017. The secured term loan facility amortizes at 10% per annum payable quarterly with the balance due at maturity. As of June 29, 2014, the outstanding principal amount of revolving loans drawn under the credit agreement was $13,125, and the outstanding principal amount of term loans drawn under the credit agreement was $131,250. Amounts under the secured revolving credit facility may be borrowed, repaid and reborrowed by us from time to time until the maturity date of the revolving loan facility. Voluntary prepayments and commitment reductions are permitted at any time without fee upon proper notice and subject to a minimum dollar requirement. Voluntary prepayments of the secured term loan facility represent a permanent reduction in credit available. At our option, the commitments under the credit agreement may be increased from time to time by an aggregate amount not to exceed $100,000. The increase option is subject to the satisfaction of certain conditions, including, without limitation, the identification of lenders (which may include existing lenders or new lenders) willing to provide the additional commitments. |
|
Our borrowings under the senior secured credit facility incur interest at either (a) LIBOR plus a margin that ranges from 150.0 basis points to 250.0 basis points, depending on our net debt ratio, or (b) (i) the base rate, which equals the highest of the prime rate set by U.S. Bank National Association, the Federal Funds Rate plus 50.0 basis points or one-month LIBOR plus 100.0 basis points, plus (ii) a margin that ranges from 50.0 basis points to 150.0 basis points, depending on our net debt ratio. As of June 29, 2014, the pricing spread above LIBOR was 200.0 basis points. |
|
Our obligations under the credit agreement are currently guaranteed by certain of our subsidiaries. Subject to certain exceptions, the credit agreement is secured by liens on certain of our assets and contains affirmative, negative and financial covenants which are customary for financings of this type, including, among other things, limits on the creation of liens, limits on the incurrence of indebtedness, restrictions on dispositions and restrictions on the payment of dividends. The senior secured credit facilities contain the following financial covenants which remain constant over the term of the agreement: |
|
| ● | A consolidated funded debt ratio of not greater than 3.75-to-1, as of the end of each fiscal quarter, as determined for the four fiscal quarters then ended. This ratio compares, as of the date of determination, our consolidated funded debt on such date to consolidated EBITDA, defined in the credit agreement as earnings before interest, taxes, depreciation, amortization, restructuring charges, gains/losses on asset disposals, non-cash charges and certain other adjustments. |
|
| ● | A minimum interest coverage ratio of not less than 3-to-1, as of the end of each fiscal quarter, as determined for the four fiscal quarters then ended. This ratio compares, for any period, our consolidated EBITDA, defined in the credit agreement as earnings before interest, taxes, depreciation, amortization, restructuring charges, gains/losses on asset disposals, non-cash charges and certain other adjustments. |
|
As of June 29, 2014 and December 29, 2013, we had borrowings of $144,375 and $194,950, respectively, under our credit facilities at an effective blended interest rate of 2.23% and 2.23%, respectively. Remaining unamortized fees in connection with the credit facilities of $3,307, which are included in other assets, are being amortized over the term of the senior secured credit facilities using the straight-line method, which is not materially different than the result utilizing the effective interest method. |
|
We estimate the fair value of our senior secured credit facilities at June 29, 2014 to be $140,663, based on discounted cash flows using an interest rate of 3.08%. We estimated the fair value of our senior secured credit facility at December 29, 2013 to be $187,469, based on discounted cash flows using an interest rate of 3.36%. Interest rates utilized are estimated based on observed market rates of interest for debt with similar maturities and seniority. These fair value measurements fall within Level 2 of the fair value hierarchy. |
|
Scheduled remaining minimum principal repayments of the senior secured term loan facility as of June 29, 2014 are $7,500 in 2014, $15,000 in 2015, $15,000 in 2016, and $93,750 in 2017. |
|
Unsecured Subordinated Notes Payable |
On August 13, 2012, the Company repurchased all 3,264 outstanding shares of our class C common stock, including all rights associated with such shares of class C common stock, in exchange for $6,246 in cash and the issuance of 15 unsecured subordinated promissory notes with an aggregate principal amount of $25,599 and bearing interest at a rate of 7.25% per annum. The cash payment equaled the amount of the minimum unpaid and undeclared dividend on the class C common stock through August 12, 2012. |
|
Seven of the subordinated notes, with an aggregate principal amount of approximately $9,664 were repaid through 2013. On September 30, 2013, we paid the first annual installment on the remaining eight subordinated notes. As of June 29, 2014, the remaining aggregate principal amount of these eight subordinated notes is approximately $13,279. The remaining subordinated notes are payable in equal annual installments on September 30 of each of 2014, 2015, 2016, 2017 and 2018, with no prepayment right. Interest on the notes is payable quarterly. |
|
We estimate the fair value of the subordinated notes at June 29, 2014 to be $13,600, based on discounted cash flows using an interest rate of 6.88%. We estimated the fair value of the subordinated notes at December 29, 2013 to be $13,515, based on discounted cash flows using an interest rate of 7.19%. Interest rates utilized are estimated based on observed market rates of interest for debt with similar maturities and seniority. These fair value measurements fall within Level 2 of the fair value hierarchy. As of June 29, 2014, $13,279 of the subordinated notes remains outstanding. |