Debt

12 Months Ended

Jul. 02, 2021

Debt Disclosure [Abstract]

Debt

Debt

Revolving Credit Facilities

On September 28, 2018, the Company amended its Credit Agreement (the “Credit Agreement”) with a syndicate of commercial banks to increase and extend the borrowing capacity of the Revolver to a $750,000, 5-year revolving credit line, with the maturity extended to September 28, 2023 (the “Amended Credit Agreement”). The Company evaluated the Amended Credit Agreement under ASC 470, Debt, and determined that the amendment represented a modification of the Credit Agreement. Due to the increase in the borrowing capacity of the Revolver, new costs associated with the amendment and the previous balance of unamortized deferred financing costs totaling $3,025, are being amortized to Other (expense) income, net on a straight line basis over the new term of the Revolver. During fiscal 2021, the Company borrowed a total of $200,000 on the Revolver to facilitate the acquisitions of POC and Pentek.

The Company incurred interest expense from the Revolver of $1,222 and $1,006 for the fiscal years ended July 2, 2021 and July 3, 2020, respectively. There were also outstanding letters of credit of $963 as of July 2, 2021.

Maturity

The Revolver has a five year maturity, which was extended to September 28, 2023.

Interest Rates and Fees

Borrowings under the Revolver bear interest, at the Company’s option, at floating rates tied to LIBOR or the prime rate plus an applicable percentage. The applicable percentage is set at LIBOR plus a markup pursuant to a pricing grid based on the Company's total net leverage ratio. As of July 2, 2021, the applicable percentage was set at LIBOR plus 1.125% based on the Company's total net leverage ratio.

In addition to interest on the aggregate outstanding principal amounts of any borrowings, the Company will also pay a quarterly commitment fee on the unutilized commitments under the Revolver. The applicable percentage is pursuant to a pricing grid based on the Company's total net leverage ratio. As of July 2, 2021, the stated interest rate for unutilized commitments was 0.20% per annum. The Company will also pay customary letter of credit and agency fees.

Covenants and Events of Default

The Revolver provides for customary negative covenants. The Revolver also requires the Company to comply with certain financial covenants, including a quarterly minimum consolidated cash interest charge ratio test and a quarterly maximum consolidated total net leverage ratio test.

The Revolver also provides for customary representations and warranties, affirmative covenants and events of default. If an event of default occurs, the lenders under the Revolver will be entitled to take various actions, including the termination of unutilized commitments, the acceleration of amounts outstanding under the Revolver and all actions permitted to be taken by a secured creditor. As of July 2, 2021, the Company was in compliance with all covenants and conditions under the Revolver.

Guarantees and Security

The Company's obligations under the Revolver are guaranteed by certain of its material domestic wholly-owned restricted subsidiaries (the “Guarantors”). The obligations of both the Company and the Guarantors are secured by a perfected security interest in substantially all of the assets of the Company and the Guarantors, in each case, now owned or later acquired, including a pledge of all of the capital stock of substantially all of its domestic wholly-owned restricted subsidiaries and 65% of the capital stock of certain of its foreign restricted subsidiaries, subject in each case to the exclusion of certain assets and additional exceptions.