Note P - Long-term Debt

6 Months Ended

Sep. 29, 2024

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE P – LONG-TERM DEBT

The carrying amounts of the Company’s long-term debt were as follows (in thousands):

	September 29, 2024			March 31, 2024
6.625% Senior Secured Notes due 2025	$	-		$	60,000
SOFR Term Loan Borrowings with an effective interest rate of 6.805%		60,000			-
Total debt		60,000			60,000
Less: Unamortized debt issuance costs		(413	)		(438	)
Total debt, net of debt issuance costs		59,587			59,562
Less: Current portion of long-term debt		(2,400	)		-
Long-term debt, net	$	57,187		$	59,562

The Company’s mandatory debt principal repayments as of September 29, 2024 were as follows (in thousands):

Fiscal Year	Amount
Remainder of 2025	$	1,200
2026		2,400
2027		2,400
2028		2,400
2029		2,400
Thereafter		49,200
Total	$	60,000

On July 10, 2024 (the “Effective Date”), the Company entered into a five-year unsecured Credit Agreement (the “Credit Agreement”) among the Company, as borrower, direct and indirect subsidiaries of the Company, as guarantors, the lenders from time to time party thereto (the “Lenders”) and Citibank, N.A., as administrative agent, swing line lender, L/C issuer and a Lender (capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Credit Agreement).

The Credit Agreement provides for a term loan facility (“Term Loan”) of $60,000 and a revolving credit facility (“Revolving Loan”) of up to $10,000. The Credit Agreement also provides that the Company has the right from time to time during the term of the Credit Agreement to request the Lenders for incremental revolving loan borrowing increases of up to an additional $10,000 in the aggregate, subject to, among other items, the Lenders agreeing to lend any such additional amounts and compliance with terms specified in the Credit Agreement. The Credit Agreement matures on July 10, 2029.

The Company borrowed $60,000 in Term Loan borrowings on the Effective Date to refinance and redeem its outstanding 2025 Notes. The Company will use any Revolving Loan borrowings under the Credit Agreement for working capital and general corporate purposes.

In connection with the refinancing, the Company recorded a loss on extinguishment of debt of $334 during the quarter ending September 29, 2024 that reflected the write-off of the remainder of the debt issuance costs on the 2025 Notes. Additionally, in connection with the refinancing, the Company incurred $431 of debt issuance costs on the Term Loan borrowings that were capitalized and will be amortized over the term of the Credit Agreement.

Term Loan and Revolving Loan borrowings under the Credit Agreement will bear interest at a rate per annum, at the Company’s option, of (a) for Base Rate Loans, the Base Rate plus the Applicable Rate of 0.00% or (b) for Term SOFR Loans, Term SOFR plus the Applicable Rate of 1.40% for one (1), three (3) or six (6) month periods, as selected by the Company in its Loan Notice. The Company will be subject to a commitment fee of 0.20% per annum on the daily amount of the undrawn portion of the Revolving Committed Amount. The interest rate on the Term Loan borrowings at September 29, 2024 was 6.805%.

The Credit Agreement contains customary affirmative covenants and negative covenants and requires the Company to maintain a Consolidated Fixed Charge Ratio not to exceed 1.20 to 1.00 and a Consolidated Net Leverage Ratio not to exceed 3.00 to 1.00, in each case, beginning with the fiscal quarter ending September 29, 2024. The Company was in compliance with the covenants of the Credit Agreement at September 29, 2024.

The outstanding Term Loan borrowings under the Credit Agreement are payable in equal quarterly installments of 1.0% of the original principal amount of the Term Loan, or $600, beginning September 30, 2024, with the balance payable on the final maturity date.

The outstanding Term Loan borrowings and the Revolving Loan borrowings under the Credit Agreement are voluntarily prepayable by the Company without penalty or premium, provided, that each of the following shall require a mandatory prepayment of outstanding Term Loan borrowings and Revolving Loan borrowings by the Company as follows: (i) 100% of any Net Cash Proceeds in excess of $2,000 individually or in the aggregate over the term of the Credit Agreement in respect of any Extraordinary Receipt provided that the Company shall be permitted to reinvest such Net Cash Proceeds in accordance with the Credit Agreement, (ii) 100% of any Net Cash Proceeds of an Equity Issuance, (iii) 100% of any Net Cash Proceeds from a Debt Issuance and (iv) 100% of any Net Cash Proceeds from the Disposition of certain assets individually, or in the aggregate, in excess of $2,000 in any fiscal year provided that the Company shall be permitted to reinvest such Net Cash Proceeds in accordance with the Credit Agreement.

Subsequent to the quarter ending September 29, 2024, on October 10, 2024, the Company made a voluntary principal prepayment of $8,000 of its Term Loan borrowings and expects to incur a loss on debt extinguishment of approximately $55 in the third quarter of fiscal 2025 related to the write-off of a portion of previously recorded debt issuance costs on the Term Loan borrowings.