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Long-Term Debt
6 Months Ended
Dec. 31, 2019
Long-Term Debt  
Long-Term Debt

Note 10.  Long-Term Debt 

Long-term debt, net consisted of the following:

 

 

 

 

 

 

 

 

 

December 31, 

 

June 30, 

(In thousands)

    

2019

    

2019

Term Loan A due 2020; 6.80% as of December 31, 2019

 

$

62,594

 

$

153,933

Unamortized discount and other debt issuance costs

 

 

(1,236)

 

 

(4,722)

Term Loan A, net

 

 

61,358

 

 

149,211

Term Loan B due 2022; 7.17% as of December 31, 2019

 

 

592,529

 

 

614,468

Unamortized discount and other debt issuance costs

 

 

(28,766)

 

 

(34,631)

Term Loan B, net

 

 

563,763

 

 

579,837

4.50% Convertible Senior Notes due 2026

 

 

86,250

 

 

 —

Unamortized discount and other debt issuance costs

 

 

(3,359)

 

 

 —

4.50% Convertible Senior Notes, net

 

 

82,891

 

 

 —

Revolving Credit Facility due 2020

 

 

 —

 

 

 —

Total debt, net

 

 

708,012

 

 

729,048

Less short-term borrowings and current portion of long-term debt

 

 

(101,939)

 

 

(66,845)

Total long-term debt, net

 

$

606,073

 

$

662,203

 

Long-term debt amounts due, for the twelve-month periods ending December 31 are as follows:

 

 

 

 

 

 

 

Amounts Payable

(In thousands)

    

to Institutions

2020

 

$

101,939

2021

 

 

39,345

2022

 

 

513,839

2023

 

 

 —

Thereafter

 

 

86,250

Total

 

$

741,373

 

On September 27, 2019, the Company issued $86,250,000 aggregate principal amount of its 4.50% convertible senior notes due 2026 (the “Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.  The Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 4.50% payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2020.  The Notes will mature on October 1, 2026, unless earlier repurchased, redeemed or converted in accordance with their terms.  The Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 65.4022 shares per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $15.29 per share), subject to adjustments upon the occurrence of certain events (but will not be adjusted for any accrued and unpaid interest). The Company may redeem all or a part of the Notes on or after October 6, 2023 at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date, subject to certain conditions relating to the Company's stock price having been met. Following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such corporate event or notice of redemption. The indenture covering the Notes contains certain other customary terms and covenants, including that upon certain events of default occurring and continuing, either the trustee or holders of at least 25% in principal amount of the outstanding Notes may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable.

In connection with the offering of the Notes, the Company also entered into privately negotiated “capped call” transactions with several counterparties. The capped call transaction will initially cover, subject to customary anti-dilution adjustments, the number of shares of common stock that initially underlie the Notes.  The capped call transactions are expected to generally reduce the potential dilutive effect on the Company’s common stock upon any conversion of the Notes with such reduction subject to a cap which is initially $19.46 per share. The capped call transactions are recorded in stockholders' equity and are not accounted for as derivatives.  The fees associated with the capped call transactions totaled $7.1 million, which was recorded as a reduction to additional paid-in capital on the Consolidated Balance Sheet. The form of capped call confirmations was filed as Exhibit 10.57 to the Form 8-K filed with the SEC on September 27, 2019.

A portion of the net proceeds received from the offering of the Notes was used to pay the cost of the capped call transactions.  The remaining net proceeds, totaling $77.0 million, was used to repay a portion of the outstanding Term Loan A balance on September 27, 2019. As a result of the repayment, the Company recorded a loss on extinguishment of debt of $2.1 million in the Consolidated Statement of Operations in the first quarter of Fiscal 2020.

The outstanding Term Loan A, Term Loan B and Revolving Credit Facility amounts above are guaranteed by all of Lannett’s significant wholly-owned domestic subsidiaries and are collateralized by substantially all present and future assets of the Company.