Revolving Credit Facility

12 Months Ended

Jan. 01, 2016

Revolving Credit Facility

Revolving Credit Facility

NOTE 4 - REVOLVING CREDIT FACILITY

The Company has a senior revolving credit facility with J.P. Morgan Securities LLC as Administrative Agent, Bank of America, N.A. as Syndication Agent and certain other lenders (the “Facility”).  The Facility consists of a $175 million credit line with a maturity date of November 15, 2020 and an accordion feature which permits expansion up to $250 million.  Borrowings, other than letters of credit, under the credit facility generally will bear interest at a rate varying from London Interbank Offered Rate (“LIBOR”) rate 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 $1.2 million are recorded in prepaid and other 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 Facility may be used for general corporate purposes, including acquisitions.  Application of the Facility’s borrowing formula as of January 1, 2016, would have permitted $43.4 million to be used. We had irrevocable letters of credit totaling $11.3 million outstanding in connection with our self-insurance programs, which resulted in a total of $32.1 million being available for use at January 1, 2016. As of January 1, 2016, we were in compliance with the various financial covenants. Under the most restrictive of its covenants, we were required to maintain minimum net worth of at least $177.5 million at January 1, 2016.  At such date, our net worth was approximately $270.2 million.

The effective interest rates on our borrowings were 3.5% and 2.7% for 2015 and 2014, respectively.