Long-Term Debt (Notes) | 3 Months Ended |
Mar. 29, 2015 |
Long-term Debt, Unclassified [Abstract] | |
Long-Term Debt | Long-term Debt |
Long-term debt at March 29, 2015 and December 28, 2014 consisted of the following: |
|
| | | | | | | |
| March 29, 2015 | | December 28, 2014 |
Collateralized: | | | |
Carrols Restaurant Group 11.25% Senior Secured Second Lien Notes | $ | 150,000 | | | $ | 150,000 | |
|
Capital leases | 8,384 | | | 8,694 | |
|
| 158,384 | | | 158,694 | |
|
Less: current portion | (1,293 | ) | | (1,272 | ) |
| $ | 157,091 | | | $ | 157,422 | |
|
Senior Secured Second Lien Notes. On May 30, 2012, Carrols Restaurant Group issued $150.0 million of 11.25% Senior Secured Second Lien Notes due 2018 (the "Notes") pursuant to an indenture dated as of May 30, 2012 governing such Notes. The Company repurchased and redeemed these Notes in the second quarter of 2015 as part of a refinancing. See Note 12 - Subsequent Events. |
The Notes were payable on May 15, 2018. Interest was payable semi-annually on May 15 and November 15. The Notes were guaranteed by the Company’s subsidiaries and were secured by second-priority liens on substantially all of the Company’s and its subsidiaries’ assets (including a pledge of all of the capital stock and equity interests of its subsidiaries). |
The Notes were redeemable at the option of the Company in whole or in part at any time after May 15, 2015 at a price of 105.625% of the principal amount plus accrued and unpaid interest, if any, if redeemed before May 15, 2016, 102.813% of the principal amount plus accrued and unpaid interest, if any, if redeemed after May 15, 2016 but before May 15, 2017 and 100% of the principal amount plus accrued and unpaid interest, if any, if redeemed after May 15, 2017. Prior to May 15, 2015, the Company was able to redeem some or all of the Notes at a redemption price of 100% of the principal amount of each note plus accrued and unpaid interest, if any, and a make-whole premium. In addition, the indenture governing the Notes also provided that the Company was able to redeem up to 35% of the Notes using the proceeds of certain equity offerings completed before May 15, 2015. |
The Notes were jointly and severally guaranteed, unconditionally and in full by the Company's subsidiaries which are directly or indirectly 100% owned by the Company. Separate condensed consolidating information is not included because the Company is a holding company that has no independent assets or operations. There are no significant restrictions on the ability of the Company or any of the guarantor subsidiaries to obtain funds from its respective subsidiaries. All consolidated amounts in the Company's financial statements are representative of the combined guarantors. |
The indenture governing the Notes included certain covenants, including limitations and restrictions on the Company and all of its subsidiaries who were guarantors under such indenture to, among other things: incur indebtedness or issue preferred stock; incur liens; pay dividends or make distributions in respect of capital stock or make certain other restricted payments or investments; sell assets; agree to payment restrictions affecting certain subsidiaries; enter into transaction with affiliates; or merge, consolidate or sell substantially all of the Company's assets. |
The indenture governing the Notes and the security agreement provided that any capital stock and equity interests of any of the Company's subsidiaries was to be excluded from the collateral to the extent that the par value, book value or market value of such capital stock or equity interests exceeded 20% of the aggregate principal amount of the Notes then outstanding. |
The indenture governing the Notes contained customary default provisions, including without limitation, a cross default provision pursuant to which it was an event of default under the Notes and the indenture if there was a default under any indebtedness of the Company having an outstanding principal amount of $15.0 million or more which results in the acceleration of such indebtedness prior to its stated maturity or was caused by a failure to pay principal when due. The Company was in compliance as of March 29, 2015 with the restrictive covenants of the indenture governing the Notes. |
Senior Credit Facility. On May 30, 2012, the Company entered into a senior credit facility, which provides for aggregate revolving credit borrowings of up to $20.0 million (including $15.0 million available for letters of credit) maturing on May 30, 2017. The senior credit facility also provided for potential incremental borrowing increases of up to $25.0 million, in the aggregate. At March 29, 2015, there were no revolving credit borrowings outstanding under the senior credit facility. On April 29, 2015 the Company amended its senior credit facility. See Note 12 - Subsequent Events. |
On December 19, 2014 the Company entered into an amendment to the senior credit facility which revised certain financial ratios, including the Fixed Charge Coverage Ratio and Adjusted Leverage Ratio (all as defined under the first amendment to the senior credit facility). Additionally, the amendment requires the Company to have no outstanding borrowings for a consecutive 30-day period during each trailing twelve month period. |
Effective on December 19, 2014, borrowings under the senior credit facility bore interest at a rate per annum, at the Company’s option, of: |
(i) the Alternate Base Rate plus the applicable margin of 2.50% to 3.25% based on the Company’s Adjusted Leverage Ratio, or |
(ii) the LIBOR Rate plus the applicable margin of 3.50% to 4.25% based on the Company’s Adjusted Leverage Ratio. |
At March 29, 2015 the Company's LIBOR rate margin was 4.25% based on the Company's Adjusted Leverage Ratio at that date. |
The Company’s obligations under the senior credit facility are guaranteed by its subsidiaries and are secured by first priority liens on substantially all of the assets of the Company and its subsidiaries, including a pledge of all of the capital stock and equity interests of its subsidiaries. |
Under the senior credit facility, the Company will be required to make mandatory prepayments of borrowings in the event of dispositions of assets, debt issuances and insurance and condemnation proceeds (all subject to certain exceptions). |
The senior credit facility contains certain covenants, including without limitation, those limiting the Company’s and its subsidiaries' ability to, among other things, incur indebtedness, incur liens, sell or acquire assets or businesses, change the character of its business in all material respects, engage in transactions with related parties, make certain investments, make certain restricted payments or pay dividends. In addition, the senior credit facility requires the Company to meet certain financial ratios, including a Fixed Charge Coverage Ratio and Adjusted Leverage Ratio (all as defined under the senior credit facility, as amended). The Company was in compliance with the covenants under the senior credit facility at March 29, 2015. |
The senior credit facility contains customary default provisions, including that the lenders may terminate their obligation to advance and may declare the unpaid balance of borrowings, or any part thereof, immediately due and payable upon the occurrence and during the continuance of customary defaults which include, without limitation, payment default, covenant defaults, bankruptcy type defaults, cross-defaults on other indebtedness, judgments or upon the occurrence of a change of control. |
After reserving $12.0 million for letters of credit issued under the senior credit facility for workers’ compensation and other insurance policies, $8.0 million was available for revolving credit borrowings under the senior credit facility at March 29, 2015. |