Debt

6 Months Ended

Jun. 28, 2025

Debt Disclosure [Abstract]

Debt

Debt

Debt is as follows:

	June 28, 2025		December 28, 2024
Revolving credit facility with interest at a variable rate  (June 28, 2025 - 5.6 %; December 28, 2024 - 6.4 %)	$	195.6	$	45.7
Term loan with interest at a variable rate  (June 28, 2025 - 5.7 %; December 28, 2024 - 5.9 %)	200.0		200.0
Fixed-rate notes due in 2025 with an interest rate of 4.2 %	—		50.0
Fixed-rate notes due in 2028 with an interest rate of 4.4 %	50.0		50.0
Other amounts	—		0.3
Deferred debt issuance costs	(1.2)		(1.4)
Total debt	444.4		344.6
Less: Current maturities of debt	—		50.3
Long-term debt	$	444.4	$	294.3

The aggregate carrying value of the Corporation’s variable-rate, long-term debt obligations under the revolving credit and term loan facilities at June 28, 2025 was $396 million, which approximated fair value. The fair value of the fixed-rate notes was estimated based on a discounted cash flow method (Level 2) to be $49 million at June 28, 2025.

As of June 28, 2025, the Corporation’s revolving credit facility borrowings were drawn under the amended and restated credit agreement entered into on June 14, 2022, as further amended on March 14, 2023 and June 1, 2023, with a scheduled maturity of June 14, 2027. The Corporation deferred the related debt issuance costs, which are classified as assets, and is amortizing them over the term of the credit agreement. The current portion of debt issuance costs of $0.4 million is the amount to be amortized over the next twelve months, based on the current credit agreement and is reflected in "Prepaid expenses and other current assets" in the Condensed Consolidated Balance Sheets. The long-term portion of debt issuance costs of $0.3 million is reflected in "Other Assets" in the Condensed Consolidated Balance Sheets.

As of June 28, 2025, $196 million of borrowings were outstanding under the $425 million revolving credit facility. The entire amount drawn under the revolving credit facility is considered long-term as the Corporation assumes no obligation to repay any of the amounts borrowed in the next twelve months. Based on consolidated EBITDA, as defined in the credit agreement, for the last four fiscal quarters, the Corporation can access the full $425 million of borrowing capacity available under the revolving credit facility, which includes the $196 million outstanding as of June 28, 2025, and maintain compliance with the financial covenants under the facility described below.

In addition to cash flows from operations, the revolving credit facility under the credit agreement is the primary source of daily operating capital for the Corporation and provides additional financial capacity for capital expenditures, repurchases of common stock, and strategic initiatives, such as acquisitions.

As of June 28, 2025, the Corporation had $200 million principal amount of borrowings outstanding under a term loan agreement entered into on March 31, 2023, as amended on May 25, 2023. The initial $300 million of proceeds from the term loan were used to support funding of the Corporation's acquisition of Kimball International on June 1, 2023. In May 2024 and September 2024, the Corporation separately executed an aggregated $100 million of voluntary early repayments of the outstanding principal balance on the term loan. Borrowings under the revolving credit facility were used to finance the early repayments. The term loan is subject to principal amortization which began on June 30, 2024. As a result of the early repayments executed by the Corporation, all of the principal amortization requirements have been satisfied and no additional principal payments are required until maturity in March 2028. The Corporation deferred the debt issuance costs related to the agreement, which are classified as a reduction of long-term debt, and is amortizing them over the term of the agreement. The deferred debt issuance costs do not reduce the amount owed by the Corporation under the terms of the agreement. As of June 28, 2025, the deferred debt issuance costs balance of $1.1 million related to the agreement is reflected in "Long-Term Debt" in the Condensed Consolidated Balance Sheets.

As of June 28, 2025, the Corporation also had $50 million principal amount of borrowings outstanding under a private placement note agreement entered into on May 31, 2018. Under the agreement, the Corporation issued $50 million of ten-year fixed-rate notes with an interest rate of 4.4 percent, due May 31, 2028. The principal amount is classified as "Long-Term Debt" in the Condensed Consolidated Balance Sheets. The Corporation deferred the debt issuance costs related to the private placement note agreement, which are classified as reductions of long-term debt, and is amortizing them over the term of the private placement note agreement. The deferred debt issuance costs do not reduce the amount owed by the Corporation under the terms of the private placement note agreement. As of June 28, 2025, the remaining deferred debt issuance costs related to the private placement note agreements were not material and are reflected in "Long-Term Debt" in the Condensed Consolidated Balance Sheets. As of June 28, 2025, due to current market rates, the Corporation would not owe material amounts to the note holders on early payment under a make-whole provision.

As of May 31, 2025, the Corporation repaid the $50 million principal amount of matured seven-year fixed-rate notes with an interest rate of 4.2 percent issued under a private placement note agreement entered into on May 31, 2018. The repayment was financed through borrowings under the revolving credit facility.

The revolving credit facility, term loan credit facility, and private placement notes all contain financial and non-financial covenants. Non-compliance with covenants under the agreements could prevent the Corporation from being able to access further borrowings, require immediate repayment of all amounts outstanding, and/or increase the cost of borrowing. The covenants under all the agreements are substantially the same. In the event that the remaining $50 million principal amount of the 10-year private placement notes is repaid by the Corporation, certain fall-away provisions in the revolving credit facility and term loan credit facility will allow for modification of the covenant measures whereby the Corporation would have increased financial flexibility. In such an event, the definitions of consolidated EBITDA and the maximum leverage under the consolidated leverage ratio would adjust to become less restrictive, while the interest coverage ratio would no longer be an included measure.

The Corporation is subject to financial covenants requiring it to maintain the following financial ratios as of the end of any fiscal quarter:

•a consolidated interest coverage ratio (as defined in the credit agreements) of not less than 4.0 to 1.0, based upon the ratio of (a) consolidated EBITDA for the last four fiscal quarters to (b) the sum of consolidated interest charges; and

•a consolidated leverage ratio (as defined in the credit agreements) of not greater than 3.5 to 1.0, based upon the ratio of (a) the quarter-end consolidated funded indebtedness to (b) consolidated EBITDA for the last four fiscal quarters.

The more restrictive of the financial covenants is the consolidated leverage ratio requirement of 3.5 to 1.0. Under the credit agreements, consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, and amortization of intangibles, as well as non-cash items that increase or decrease net income. As of June 28, 2025, the Corporation was in compliance with the financial covenants.