Debt | 3 Months Ended |
Jun. 29, 2014 |
Text Block [Abstract] | ' |
Debt | ' |
Debt |
The following summarizes the Company’s long-term debt including capital lease obligations as of June 29, 2014 and March 31, 2014: |
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| | 29-Jun-14 | | 31-Mar-14 |
3.375% Convertible Notes, net of discount, due 2038 | | $ | 164,699 | | | $ | 162,887 | |
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2011 Credit Facility, due 2018 | | 163,600 | | | 125,000 | |
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Capital lease obligations and other | | 518 | | | 599 | |
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| | 328,817 | | | 288,486 | |
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Less current portion | | 327 | | | 354 | |
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Total long-term debt and capital lease obligations | | $ | 328,490 | | | $ | 288,132 | |
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3.375% Convertible Notes |
The Convertible Notes will mature on June 1, 2038, unless earlier converted, redeemed or repurchased. Prior to maturity, the holders may convert their Convertible Notes into shares of the Company’s common stock at any time after March 1, 2015 or prior to that date under certain circumstances. When issued, the initial conversion rate was 24.6305 shares of the Company's common stock per one thousand dollars in principal amount of Convertible Notes, which was equivalent to an initial conversion price of $40.60 per share. The conversion rate as of July 1, 2014, the most recent date when the the holders were notified that they can submit the Convertible Notes for conversion, was 24.9008 shares of the Company's common stock per one thousand dollars in principal amount of the Convertible Notes due to the cumulative impact of cash dividends paid on the Company's common stock. The conversion price is subject to adjustment under certain circumstances. It is the Company’s current intent to settle the principal amount of any conversions in cash, and any additional conversion consideration in cash, shares of the Company's common stock or a combination of cash and shares. |
At any time after June 6, 2015, the Company may at its option redeem the Convertible Notes, in whole or in part, for cash, at a redemption price equal to 100% of the principal amount of Convertible Notes to be redeemed, plus any accrued and unpaid interest. |
Holders may convert their Convertible Notes prior to March 1, 2015, at the option of the holder, under the following circumstances: (i) during any calendar quarter (and only during such calendar quarter), if the last reported sale price (as defined in the indenture for the Convertible Notes) of a share of the Company's common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 130% of the applicable conversion price in effect for the Convertible Notes on the last trading day of the immediately preceding calendar quarter, (ii) upon the occurrence of specified corporate events, or (iii) during the five business-day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the indenture for the Convertible Notes) of the Convertible Notes for each day of the measurement period was less than 98% of the product of the “last reported sale price” (as defined in the indenture for the Convertible Notes) of a share of the Company's common stock and the applicable conversion rate on such day. |
At June 30, 2014, the closing price of the Company's common stock exceeded 130% of the conversion price for more than 20 trading days during the period of 30 consecutive trading days ending June 30, 2014, thereby satisfying one of the early conversion events and as a result, the Convertible Notes became convertible on demand, and the holders were notified that they can elect to submit the Convertible Notes for conversion, between the notification date of July 1, 2014 and September 30, 2014. The carrying value of the Convertible Notes of $164,699 continues to be reported as long-term debt on the Consolidated Condensed Balance Sheet as of June 29, 2014 as the Company intends to draw on the 2011 Credit Facility to settle, at a minimum, the principal amount of any such conversions in cash. No gain or loss was recognized when the Convertible Notes became convertible. |
This optional conversion period is reset each quarter and the Company will reassess on the last day of each calendar quarter. |
In addition, upon becoming convertible, a portion of the equity component that was recorded upon the issuance of the Convertible Notes was considered redeemable and that portion of the equity was reclassified to temporary equity in the consolidated balance sheet. Such amount was determined based on the cash consideration to be paid upon conversion and the carrying amount of the debt. As the holders of the Convertible Notes will be paid in cash for the principal amount and issued shares or a combination of cash and shares for the remaining value of the Convertible Notes, the reclassification into temporary equity as of June 29, 2014 was $7,607 based on the Convertible Notes principal of $172,306 and the carrying value of $164,699. If a conversion event takes place in the following quarter, this temporary equity balance will be recalculated based on the difference between the Convertible Notes principal and the debt carrying value. If the Convertible Notes are settled during the second quarter of fiscal 2015, an amount equal to the fair value of the liability component immediately prior to the settlement will be deducted from the fair value of the total settlement consideration transferred and allocated to the liability component. Any difference between the amount allocated to the liability and the net carrying amount of the Convertible Notes (including any unamortized debt issue costs and discount) will be recognized in earnings as a gain or loss on debt extinguishment. Any remaining consideration is allocated to the reacquisition of the equity component and will be recognized as a reduction of EnerSys stockholders’ equity. |
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The following represents the principal amount of the liability component, the unamortized discount, and the net carrying amount of the Convertible Notes as of June 29, 2014 and March 31, 2014: |
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| | 29-Jun-14 | | 31-Mar-14 |
Principal | | $ | 172,306 | | | $ | 172,500 | |
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Unamortized discount | | (7,607 | ) | | (9,613 | ) |
Net carrying amount | | $ | 164,699 | | | $ | 162,887 | |
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As of June 29, 2014, the remaining discount will be amortized over a period of 11 months. The conversion price of the $172,306 in aggregate principal amount of the Convertible Notes as of July 1, 2014, equated to $40.16 per share and the number of shares on which the aggregate consideration is to be delivered upon conversion is 4,290,557. |
The effective interest rate on the liability component of the Convertible Notes was 8.50%. The amount of interest cost recognized for the amortization of the discount on the liability component of the Convertible Notes was $2,006 and $1,844, respectively, during the quarters ended June 29, 2014 and June 30, 2013. |
2011 Credit Facility |
The Company is party to a $350,000 senior secured revolving credit facility (as amended, “2011 Credit Facility”) and, on July 8, 2014, amended the credit facility while also entering into an Incremental Commitment Agreement (“Incremental Commitment Agreement”) pursuant to which certain banks agreed to provide incremental term loan commitments of $150,000 and incremental revolving commitments of $150,000. Pursuant to these changes, the 2011 Credit Facility is now comprised of a $500,000 senior secured revolving credit facility and a $150,000 senior secured incremental term loan credit facility which matures on September 30, 2018. The 2011 Credit Facility may be increased by an aggregate amount of $300,000 in revolving commitments and/or one or more new tranches of term loans, under certain conditions. Both revolving loans and incremental term loans under the 2011 Credit Facility will bear interest, at the Company's option, at a rate per annum equal to either (i) the London Interbank Offered Rate (“LIBOR”) plus between 1.25% and 1.75% (based on the Company's consolidated net leverage ratio) or (ii) the Base Rate (which is the highest of (a) the Bank of America prime rate, and (b) the Federal Funds Effective Rate) plus between 0.25% and 0.75% (based on the Company’s consolidated net leverage ratio). |
As of June 29, 2014, the Company had $163,600 outstanding in revolver borrowings. |
Short-Term Debt |
As of June 29, 2014 and March 31, 2014, the Company had $30,109 and $33,814, respectively, of short-term borrowings. The weighted-average interest rates on these borrowings were approximately 9% and 7%, respectively. |
Available Lines of Credit |
As of June 29, 2014 and March 31, 2014, the Company had available and undrawn, under all its lines of credit, $317,560 and $360,275, respectively, including $132,960 and $136,525, of uncommitted lines of credit as of June 29, 2014 and March 31, 2014, respectively. |
As of June 29, 2014 and March 31, 2014, the Company had $4,035 and $1,653, respectively, of standby letters of credit. |