Long-Term Debt

6 Months Ended

Dec. 30, 2023

On August 14, 2020, the Company entered into a loan agreement with Bank of America. The Loan Agreement replaces the Company’s prior amended and restated credit agreement, as amended, with Wells Fargo Bank. The Loan Agreement provides for a five-year asset-based senior secured revolving credit facility of up to $93 million, maturing on August 14, 2025.

On September 3, 2021, the Company entered into an amendment to the Company’s current loan agreement with Bank of America. The amendment increases the Company’s current credit facility to $120 million, subject to the Company’s borrowing base, maturing on September 3, 2026. As of December 30, 2023, the Company had an outstanding balance under the asset-based revolving credit facility of $105.6 million, $0.3 million in outstanding letters of credit and $14.4 million available for future borrowings.

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 July 1, 2023, the Company had an outstanding balance under the credit facility with Bank of America of $115.4 million, $0.3 million in outstanding letters of credit and $4.6 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 (1) the prime rate for the applicable day (as such rate is determined from time to time by the Bank), (2) the federal funds rate for the applicable day plus 0.50%, and (3) LIBOR for a 30-day interest period as of the

applicable 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) LIBOR rate for an applicable interest period (provided that in no event shall the LIBOR rate be less than 0.50%), plus the applicable interest margin for LIBOR 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 1.25-1.75%; and (y) LIBOR rate loans will be 2.25-2.75%, 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 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.

Under the new loan agreement with Bank of America, the asset-based revolving credit facility bears interest at LIBOR plus 2.5%, as elected by the Company.

On December 11, 2023, the Company entered into a loan agreement in Mexican peso with Banorte Financial Group. The agreement provides for three-year asset-based secured line of credit up to $5.9 million, subject to the Company’s borrowing base, maturing on December 11, 2026. The credit facility bears interest at Itercambaria de Equilibrio Interest Rate plus 2.75%. As of December 30, 2023, the Company had an outstanding balance under the asset-based revolving credit facility of $3.9 million and $2.0 million available for future borrowings.

On September 19, 2023, the Company entered into another $1.1 million equipment financing agreement with Ameris Bank dba Balboa Capital ("Balboa Capital"). Combining with agreements entered in the third quarter of fiscal year 2023, the total $5.5 million relates to the Company’s existing manufacturing equipment that bears an interest rate range of 6% - 8% and matures in the first quarter of fiscal 2030. Under these agreements, equal monthly payments of $94,000 commenced in the second quarter of fiscal year 2024 and will continue through the maturity of the equipment financing facility in the first quarter of fiscal 2030. The Company had an outstanding balance $4.9 million as of December 30, 2023.

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 December 30, 2023, the Company had an outstanding balance of $1.8 million. As of July 1, 2023, the Company had an outstanding balance of $2.3 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 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 December 30, 2023, the Company had an outstanding balance of $2.8 million. As of July 1, 2023, the Company had an outstanding balance of $3.4 million.

The interest rates on outstanding debt as of December 30, 2023 range from 4.85% - 14.25% compared to 4.85% - 8.22% as of July 1, 2023.

Debt maturities as of December 30, 2023 for the next five years and thereafter are as follows (in thousands):


Fiscal Years Ending	Amount
2024 (1)	$	1,520
2025	3,123
2026	2,081
2027	110,468
2028	1,032
2029 - Thereafter	816
Total debt	$	119,040
Unamortized debt issuance costs	(1,078)
Long-term debt, net of debt issuance costs	$	117,962

(1) Represents scheduled payments for the remaining six-month period ending June 29, 2024.

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 December 30, 2023.