Long-Term Debt

9 Months Ended

Apr. 01, 2023

On September 3, 2021, the Company entered into an amendment to the Company’s current loan agreement with Bank of America. The amendment increased the Company’s current credit facility of $93 million to $120 million, subject to the Company’s borrowing base, maturing on September 3, 2026. On August 26, 2022, the Company entered into a third amendment to the loan agreement with Bank of America. The amendment removed the cash flow leverage ratio covenant and increased the interest rate by 25 basis points. As of April 1, 2023, the Company had an outstanding balance under the asset-based revolving credit facility of $116.8 million, $0.3 million in outstanding letters of credit and $3.2 million available for future borrowings.

As of July 2, 2022, the Company had an outstanding balance under the credit facility with Bank of America of $95.1 million, $0.3 million in outstanding letters of credit and $10.8 million available for future borrowings.

Generally, the interest rate applicable to loans under the Bank of America loan agreement will be, at the Company’s option: (i)(A) the base rate which is the highest of (a) the Prime Rate for such day, (b) the Federal Funds Rate for such day plus 0.50%, or (c) Term SOFR for a one month interest period as of such day, plus 1.00% (provided that in no event shall the base rate be less than zero), plus the applicable interest margin for base rate loans; and (B) SOFR rate for an applicable interest period, plus the applicable interest margin for SOFR rate loans. Depending on average daily excess borrowing availability over applicable periods under the Credit Facility, applicable interest margins on: (x) base rate loans will be 1.50-2.00%; and (y) SOFR rate loans will be 2.50-3.00%, resetting on a quarterly basis beginning in early 2021. If there is an event of default under the loan agreement, all loans and other obligations will bear interest at a rate of an additional 2.00% on the last change rates above otherwise applicable interest rates. In addition to interest charges, the Company is required to pay a fee of 0.25% per annum on the unused portion of the Credit Facility, monthly in arrears.

On August 14, 2020, the Company also entered into a $5.0 million equipment financing facility relating to the Company’s existing U.S. manufacturing equipment that bears interest at 4.85% and matures on August 14, 2025. Under this loan agreement, equal monthly payments of approximately $94,000 commenced on September 14, 2020 and will continue through the maturity of the equipment financing facility on August 14, 2025. As of April 1, 2023, the Company had an outstanding balance of $2.5 million. As of July 2, 2022, the Company had an outstanding balance of $3.3 million under the Bank of America equipment term loan agreement.

On November 24, 2020, the Company entered into a $6.0 million equipment financing facility related to the Company’s existing manufacturing equipment in Mexico that bears interest at 5.52% and matures on April 24, 2026. Under this loan agreement, equal monthly payments of $100,000 commenced on May 24, 2021 and will continue through the maturity of the equipment financing facility on April 24, 2026. As of April 1, 2023, the Company had an outstanding balance of $3.7 million. As of July 2, 2022, the Company had an outstanding balance of $4.6 million.

The interest rates on outstanding debt as of April 1, 2023 range from 4.85% - 7.92% compared to 4.50% - 5.52% as of July 2, 2022.

Debt maturities as of April 1, 2023 for the next five years and thereafter are as follows (in thousands):


Fiscal Years Ending	Amount
2023 (1)	$	468
2024	2,239
2025	2,290
2026	1,187
2027	116,766
Thereafter	—
Total debt	$	122,950
Unamortized debt issuance costs	(513)
Long-term debt, net of debt issuance costs	$	122,437

(1) Represents scheduled payments for the remaining three-month period ending July 1, 2023.

The Company must comply with certain financial covenants, including a fixed charge coverage ratio. The Company was in compliance with all financial covenants as of April 1, 2023.