Revolving Credit Facility

9 Months Ended

Oct. 02, 2015

Revolving Credit Facility

Revolving Credit Facility

5.Revolving Credit Facility

The Company has a senior secured revolving credit facility with JP Morgan Chase Bank, NA, as Administrative Agent, Bank of America, as Syndication Agent, and certain other lenders (the “Facility”).  The Facility consists of a $175,000 credit line with a maturity date of November 15, 2020 and an “accordion” feature providing for potential future expansion of the Facility to $250,000.  Borrowings (other than letters of credit) under the credit facility generally will bear interest at a rate varying from the London Interbank Offered Rate (LIBOR) plus 1.75% to LIBOR rate plus 3.00%,  depending on leverage.  The Facility is secured by substantially all of the Company’s assets and the stock of its subsidiaries.  Debt issuance costs of $1,200 incurred in connection with credit facility is recorded in prepaid assets and is being amortized through November 15, 2020.

Borrowings under the Facility are subject to various covenants including a multiple of 3.5 times earnings before interest, taxes, depreciation and amortization (“EBITDA”). “EBITDA” may include “Acquired EBITDA” from pro-forma acquisitions as defined. Borrowings under the New Facility may be used for general corporate purposes, including acquisitions.  Application of the Facility’s borrowing formula as of October 2, 2015, permitted an additional $64,800 to be used.The Company had irrevocable letters of credit totaling $9,800 outstanding in connection with the Company’s self-insurance programs, which resulted in a total of $55,000 being available for use at October 2, 2015.  As of October 2, 2015, the Company was in compliance with the various financial covenants.  Under the most restrictive of its covenants, the Company was required to maintain minimum net worth of at least $176,100 at October 2, 2015.  At such date, the Company’s net worth was approximately $259,300.

The effective interest rates on the Company’s borrowings were 2.62% and 2.90% for the three month periods ended October 2, 2015 and September 30, 2014, respectively.