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Note 5 - Long-term Debt

6 Months Ended

Jul. 01, 2023

Note 5 - Long-Term Debt

On September 1, 2022, we entered into an Amended and Restated Credit Agreement (the “2022 Credit Agreement”), which provides for a five-year secured revolving loan facility with an aggregate principal amount of up to $350 million. Details of the revolving loan facility, including the basis for interest and covenants are described in the 2022 Credit Agreement.

The revolving loans under the 2022 Credit Agreement may be repaid and reborrowed at our discretion, with any remaining outstanding principal amount due and payable on the maturity date of the revolving loan on September 1, 2027. During the first six months of fiscal 2023, we made discretionary payments totaling $85 million on the revolving loans outstanding under the 2022 Credit Agreement.

The fair value of our long-term debt approximates the carrying value, which is reflected in our Consolidated Balance Sheets as follows:

	*July 1,*			*December 31,*
(In thousands)	*2023*			*2022*
Principal amount	$	45,000		$	130,000
Unamortized original issuance discount and debt costs		(1,115	)		(1,248	)
Long-term debt, net of unamortized debt issue costs	$	43,885		$	128,752

As of July 1, 2023, the effective interest rate on the revolving loan was 6.49%. We pay a quarterly commitment fee of 0.20% on the unused portion of the revolving facility. Interest expense related to our long-term debt was included in Interest expense on our Consolidated Statements of Operations as follows:

	*Three Months Ended*				*Six Months Ended*
	*July 1,*		*July 2,*		*July 1,*		*July 2,*
(In thousands)	*2023*		*2022*		*2023*		*2022*
Contractual interest	$	832	$	800	$	2,618	$	1,362
Amortization of original issuance discount and debt costs		67		83		133		168
Total interest expense related to long-term debt	$	899	$	883	$	2,751	$	1,530

Subsequent to July 1, 2023, we made discretionary payments totaling $45 million on the revolving loans outstanding under the 2022 Credit Agreement.