Debt | 3 Months Ended |
Mar. 31, 2014 |
Debt Disclosure [Abstract] | ' |
Debt | ' |
Debt |
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The Company's debt agreements contain financial covenants that require the maintenance of interest coverage and leverage ratios. The Company is in compliance with its financial covenants as of March 31, 2014, and continues to monitor its future compliance based on current and anticipated future economic conditions. |
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Long-term debt and notes and overdrafts payable at March 31, 2014 and December 31, 2013 consisted of: |
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| | March 31, 2014 | | December 31, 2013 |
| | Carrying | | Fair | | Carrying | | Fair |
Amount | Value | Amount | Value |
3.375% Convertible Notes | | $ | 55,636 | | | $ | 76,114 | | | $ | 55,636 | | | $ | 76,569 | |
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Unamortized debt discount – 3.375% Convertible Notes | | — | | | — | | | (731 | ) | | — | |
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Revolving credit agreement | | 500,845 | | | 503,798 | | | 487,920 | | | 482,431 | |
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Borrowings under lines of credit and overdrafts | | 1,636 | | | 1,636 | | | 1,074 | | | 1,074 | |
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Other foreign bank borrowings | | 270 | | | 273 | | | 405 | | | 410 | |
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Capital leases | | 2,940 | | | 3,264 | | | 3,120 | | | 3,402 | |
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| | 561,327 | | | 585,085 | | | 547,424 | | | 563,886 | |
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Less current maturities | | (58,251 | ) | | | | (57,083 | ) | | |
Long-term debt | | $ | 503,076 | | | | | $ | 490,341 | | | |
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As of March 20, 2014, the 3.375% Convertible Notes (Notes") are subject to redemption at their par value at any time, at the option of the Company. The note holders had the option to require the Company to redeem some or all of the Notes on April 11, 2014. As such, the balance of these Notes of $55,636 (par value) and the related deferred tax balances are classified as current in the accompanying balance sheet as of March 31, 2014. None of the Notes were redeemed by the note holders on April 11, 2014. The note holders may also require the Company to redeem some or all of the notes at their par value on March 15th of 2017 and 2022. The 3.375% Convertible Notes are also eligible for conversion upon meeting certain conditions as provided in the indenture agreement including the closing stock price for 20 of the last 30 trading days in the preceding quarter being greater than or equal to 130% of the conversion price (the "conversion price eligibility requirement"). The eligibility for conversion is determined quarterly. During the first quarter of 2014, the 3.375% Convertible Notes were not eligible for conversion. During the second quarter of 2014, the 3.375% Convertible Notes will be eligible for conversion due to meeting the conversion price eligibility requirement and on March 20, the Company formally notified the note holders that they are entitled to convert the Notes. The first $1 of the conversion value of each note would be paid in cash and the additional conversion value, if any, would be paid in cash or common stock, at the option of the Company. The fair value of the Notes was determined using quoted market prices that represent Level 2 observable inputs. |
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In September 2013, the Company entered into a second amendment to its fifth amended and restated revolving credit agreement (the "Amended Credit Agreement”) and retained Bank of America, N.A. as Administrative Agent for the lenders. The Amended Credit Agreement extended the maturity date of the debt facility by two years from September 2016 to September 2018 and includes an option to extend the maturity date for an additional year, subject to certain conditions. The Amended Credit Agreement added a new foreign subsidiary borrower in Germany, Barnes Group Acquisition GmbH, maintained the borrowing availability of the Company at $750,000 and adds an accordion feature to increase this amount to $1,000,000. The Company may exercise the accordion feature upon request to the Administrative Agent as long as an event of default has not occurred or is continuing. The borrowing availability of $750,000, pursuant to the terms of the Amended Credit Agreement, allows for Euro-denominated borrowings equivalent to $500,000. Euro-denominated borrowings are subject to foreign currency translation adjustments that are included within accumulated other non-owner changes to equity. Borrowings under the Amended Credit Agreement continue to bear interest at LIBOR plus a spread ranging from 1.10% to 1.70% depending on the Company's leverage ratio at prior quarter end. The Company paid fees and expenses of $1,261 in conjunction with executing the Amended Credit Agreement in 2013; such fees will be deferred and amortized into interest expense on the accompanying Consolidated Statements of Income through its maturity. |
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Borrowings and availability under the Amended Credit Agreement were $500,845 and $249,155, respectively, at March 31, 2014 and $487,920 and $262,080, respectively, at December 31, 2013. Borrowings included Euro-denominated borrowings of €109,100 ($150,045) at March 31, 2014 and €114,000 ($157,320) at December 31, 2013. The interest rate on these borrowings was 1.30% and 1.36% on March 31, 2014 and December 31, 2013, respectively. The fair value of the borrowings is based on observable Level 2 inputs. The borrowings are valued using discounted cash flows based upon the Company's estimated interest costs for similar types of borrowings. |
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The Company's borrowing capacity remains limited by various debt covenants in the Amended Credit Agreement, certain of which were amended in September 2013. The Amended Credit Agreement requires the Company to maintain a ratio of Consolidated Senior Debt, as defined in the Amended Credit Agreement, to Consolidated EBITDA, as defined, of not more than 3.25 times at the end of each fiscal quarter ("Senior Debt Ratio"), a ratio of Consolidated Total Debt, as defined, to Consolidated EBITDA of not more than 4.00 times at the end of each fiscal quarter, and a ratio of Consolidated EBITDA to Consolidated Cash Interest Expense, as defined, of not less than 4.25 times at the end of each fiscal quarter. The Amended Credit Agreement also provides that in connection with certain permitted acquisitions with aggregate consideration in excess of $150,000, the Consolidated Senior Debt to EBITDA ratio and the Consolidated Total Debt to EBITDA ratio are permitted to increase to 3.50 times and 4.25 times, respectively, for a period of the four fiscal quarters ending after the closing of the acquisition. In October 2013, the Company completed the acquisition of the Männer Business, a permitted transaction pursuant to the terms of the Amended Credit Agreement. At March 31, 2014, the Company was in compliance with all financial covenants under the Amended Credit Agreement. |
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In addition, the Company has available approximately $15,000 in uncommitted short-term bank credit lines ("Credit Lines"), of which $1,000 was borrowed at March 31, 2014 at an interest rate of 2.12% and $1,000 was borrowed at December 31, 2013 at an interest rate of 2.13%. The Company had also borrowed $636 and $74 under overdraft facilities at March 31, 2014 and December 31, 2013, respectively. Repayments under the Credit Lines are due within seven days. Repayments of the overdrafts are generally due within two days. The carrying amounts of the Credit Lines and overdrafts approximate fair value due to the short maturities of these financial instruments. |
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The Company also has other foreign bank borrowings. The fair value of the foreign bank borrowings are based on observable Level 2 inputs. These instruments are valued using discounted cash flows based upon the Company's estimated interest costs for similar types of borrowings. |
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The Company holds capital leases within the Männer Business that was acquired in October 2013. The fair value of |
the capital leases are based on observable Level 2 inputs. These instruments are valued using discounted cash flows based |
upon the Company's estimated interest costs for similar types of borrowings. |