Long-Term Debt | 9 Months Ended |
Sep. 28, 2013 |
Long-Term Debt [Abstract] | ' |
Long-Term Debt | ' |
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Note 7 - Long-Term Debt |
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Long-term debt consists of the following (in thousands): |
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| September 28, | | December 31, |
| 2013 | | 2012 |
2013 credit agreement - revolving facility | $ | - | | $ | - |
2013 credit agreement - U.S. term facility | | 8,500 | | | - |
2013 credit agreement - Canadian term facility | | 14,250 | | | - |
U.S. credit facility - revolving debt (1) | | - | | | - |
Israeli credit facility - revolving debt (2) | | - | | | - |
Exchangeable unsecured notes, due 2102 | | 4,097 | | | 9,958 |
Other debt | | 1,078 | | | 1,363 |
| | 27,925 | | | 11,321 |
Less current portion | | 3,896 | | | 167 |
| $ | 24,029 | | $ | 11,154 |
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-1 | | Through December 31, 2012, multi-currency revolving facility with interest payable at agent's prime rate, the Federal Funds rate or LIBOR, adjusted by an interest rate margin of 0.00% to 2.75% per annum, depending on the Company's leverage ratio. This facility was amended and restated on January 29, 2013, as described below. | | | |
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-2 | | Multi-currency revolving facility with interest payable at LIBOR plus an interest rate margin of 2.15% per annum. | | | |
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2013 Credit Agreement |
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On January 29, 2013, the Company entered into an Amended and Restated Credit Agreement (the "2013 Credit Agreement") among the Company, VPG Canada, the lenders party thereto, RBS Citizens, National Association as joint book-runner and JPMorgan Chase Bank, National Association as agent for such lenders (the "Agent"), pursuant to which the terms of the Company's multi-currency, secured credit facility was revised and expanded to provide for the following facilities: (1) a secured revolving facility in an aggregate principal amount of $15.0 million (the "2013 Revolving Facility"), the proceeds of which may be used for general corporate purposes, with sublimits of (i) $10.0 million which can be used for letters of credit for the account of the Company or VPG Canada, and (ii) up to $5.0 million which can be used for loans outstanding for up to 5 business days ("Swing Loans"); (2) a secured term facility for the Company, the proceeds of which are to be loaned by the Company to its subsidiaries to fund the KELK acquisition, in an aggregate principal amount of $10.0 million (the "U.S. Term Facility"); and (3) a secured term facility for VPG Canada in an aggregate principal amount of $15.0 million (the "Canadian Term Facility"). The aggregate principal amount of the 2013 Revolving Facility may be increased by a maximum of $10.0 million upon the request of the Company, subject to the terms of the 2013 Credit Agreement. The 2013 Credit Agreement terminates on January 29, 2018. The term loans are being repaid in quarterly installments. |
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Interest payable on amounts borrowed under the 2013 Revolving Facility (other than with respect to Swing Loans), the U.S. Term Facility and the Canadian Term Facility (collectively, the "Facilities") is based upon, at the Company's option, (1) the Agent's prime rate, the Federal Funds Rate, or a LIBOR floor (the "Base Rate"), or (2) LIBOR plus a specified margin. An interest margin of 0.25% is added to Base Rate loans. Depending upon the Company's leverage ratio, an interest rate margin ranging from 2.00% to 3.00% per annum is added to the applicable Base Rate or LIBOR rate to determine the interest payable on the Facilities. The Company is required to pay a quarterly fee of 0.30% per annum to 0.50% per annum on the unused portion of the 2013 Revolving Facility, which is determined based on the Company's leverage ratio each quarter. Additional customary fees apply with respect to letters of credit. |
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The obligations of the Company under the 2013 Credit Agreement are secured by pledges of stock in certain domestic and foreign subsidiaries, as well as guarantees by substantially all of the Company's domestic subsidiaries. The obligations of the Company and the guarantors under the 2013 Credit Agreement are secured by substantially all the assets (excluding real estate) of the Company and such guarantors. The Canadian Term Facility is secured by substantially all the assets of VPG Canada and by a secured guarantee by the Company and its domestic subsidiaries. The 2013 Credit Agreement restricts the Company from paying cash dividends and requires the Company to comply with other customary covenants, representations and warranties, including the maintenance of specific financial ratios. The financial maintenance covenants include (a) a tangible net worth of not less than $118.0 million, plus 50% of cumulative net earnings for each fiscal quarter since inception, excluding quarterly net losses; (b) a leverage ratio of not more than 2.5 to 1.0; and (c) a fixed charges coverage ratio of not less than 1.5 to 1.0. The Company was in compliance with its financial maintenance covenants at September 28, 2013. If the Company is not in compliance with any of these covenant restrictions, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant to the credit facility could become immediately payable. |
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Israeli Credit Facility |
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Vishay Advanced Technologies Ltd. ("VAT"), an Israeli company and subsidiary of the Company, entered into a Credit Agreement (the "Credit Agreement") with HSBC Bank Plc (the "Lender") in November 2011 securing a multi-currency, secured revolving facility in an aggregate principal amount of $15.0 million (the "VAT Revolving Facility"). The VAT Revolving Facility was amended on June 27, 2013 to revise certain covenants and the quarterly commitment fee paid on the unused portion of the facility. All other terms of the facility remained unchanged. The VAT Revolving Facility terminates on November 30, 2014. There was no balance outstanding on this facility at September 28, 2013 or December 31, 2012. |
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Interest payable on the VAT Revolving Facility is based upon LIBOR ("VAT Base Rate"). An interest rate margin of 2.15% per annum is added to the VAT Base Rate to determine the interest payable on the VAT Revolving Facility. VAT paid a one-time fee on the commitment and, as amended, is required to pay a quarterly fee of 0.40% per annum on the unused portion of the VAT Revolving Facility. |
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The Credit Agreement requires VAT to comply with customary covenants, representations and warranties, including the maintenance of specific financial ratios. During the first quarter of 2013, VAT was in compliance with the leverage ratio, but, as a result of the legal entity merger within Israel, reported in the Company's 2012 Annual Report on Form 10-K, VAT was not in compliance with the covenant for tangible net worth to total assets ratio and the covenant for minimum tangible shareholders' equity. The Company obtained a waiver from the Lender respecting such non-compliance as of March 30, 2013. VAT renegotiated the covenants associated with this facility during the second quarter of 2013. The revised financial maintenance covenants require VAT to maintain (a) a leverage ratio of not more than 2.5 to 1.0; (b) a tangible shareholders' equity of not less than $48.0 million; and (c) a tangible net worth to total assets ratio of not less than 0.65 to 1.0. As of September 28, 2013, VAT was in compliance with its financial maintenance covenants. In the event of covenant non-compliance, the VAT Revolving Facility could be terminated by the Lender, and any amounts outstanding pursuant to the VAT Revolving Facility could become immediately payable. |
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Credit Lines |
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In connection with the acquisition of the KELK business in January 2013, VPG Canada entered into an uncommitted $3.0 million line of credit with Royal Bank of Canada. |
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Exchangeable Unsecured Notes, due 2102 |
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By reason of the spin-off, Vishay Intertechnology was required to take action so that the existing exchangeable notes of Vishay Intertechnology were deemed exchanged as of the date of the spin-off, for a combination of new notes of Vishay Intertechnology and notes issued by VPG. |
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VPG assumed the liability for an aggregate $10.0 million principal amount of exchangeable notes effective July 6, 2010. The maturity date of the notes is December 13, 2102. |
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The notes are subject to a put and call agreement under which the holders may at any time put the notes to the Company in exchange for shares of the Company's common stock, and the Company may call the notes in exchange for cash or for shares of its common stock at any time after January 1, 2018. The put/call rate of the VPG notes is $22.57 per share of common stock. Effective August 28, 2013, a holder of the Company's exchangeable notes exercised its option to exchange approximately $5.9 million principal amount of the notes for 259,687 shares of VPG common stock. Following this transaction, VPG has outstanding exchangeable unsecured notes with a principal amount of approximately $4.1 million, which are exchangeable for an aggregate of 181,537 shares of VPG common stock. (See also Note 12 - Earnings Per Share). |
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The notes bear interest at LIBOR. Interest is payable quarterly on March 31, June 30, September 30, and December 31 of each calendar year. |
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Other Debt |
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Other debt consists of debt held by VPG's Japanese subsidiary and is payable monthly over the next 9 years at a zero percent interest rate. |
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