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Note 6 - Debt
12 Months Ended
Dec. 30, 2017
Notes to Financial Statements  
Debt Disclosure [Text Block]
6
. Debt
 
The carrying amounts of debt at
December 3
0,
2017
and
December 31, 2016
are as follows:
 
(in
thousands
)
 
201
7
   
2016
 
Revolving
Credit Facility
  $
    $
112,500
 
Term
Loan
   
122,500
     
120,313
 
Entrusted loan
   
     
3,522
 
Euro Senior Notes, Series A due 2023
   
139,623
     
122,313
 
Euro Senior Notes, Series B due 2028
   
113,369
     
99,314
 
U
.S. Senior Notes, Series A due 2022
   
25,000
     
 
U
.S. Senior Notes, Series B due 2027
   
100,000
     
 
Unamortized debt issuance costs
   
(4,881
)    
(3,820
)
Total debt
   
495,611
     
454,142
 
Less: Current maturities
   
(6,250
)    
(6,250
)
Total long-term debt
  $
489,361
    $
447,892
 
 
Revolving Credit Facility / Term Loan
 
On
March 4, 2016,
the Company entered into a
five
-year credit agreement (“Credit Agreement”) with a group of lenders for up to
$700.0
million. The Credit Agreement consisted of an unsecured revolving credit facility (“Revolving Credit Facility”) of
$575.0
million and an unsecured term loan credit facility (“Term Loan”) of up to
$125.0
million. In addition, the Company had the ability, from time to time, to increase the size of the Revolving Credit Facility and the Term Loan by up to an additional
$150.0
million, in the aggregate, in each case in minimum increments of
$25.0
million, subject to certain conditions and the agreement of participating lenders. For the Term Loan, the Company was required to make quarterly principal payments of
$1.6
million through
March 31, 2018
and
$3.1
million from
June 30, 2018
through
December 31, 2020
with the remaining balance due on
March 4, 2021.
 
On
October 13, 2017,
the Company amended
the Credit Agreement to increase the Revolving Credit Facility from
$575.0
million to
$700.0
million and increase the Term Loan from
$125.0
million to
$200.0
million and to extend the expiration date from
March 4, 2021
to
October 13, 2022.
The Credit Agreement also includes the option for the Company to increase the size of the Revolving Credit Facility and the Term Loan by up to an additional
$300.0
million, in the aggregate, subject to the satisfaction of certain conditions set forth in the Credit Agreement. Term Loans
may
be made in up to
two
advances. The
first
advance of
$125.0
million occurred on
October 13, 2017
and the
second
advance of
$75.0
million occurred on
January 16, 2018.
For the Term Loan, the Company is required to make quarterly principal payments of
1.25%
of the original term loan (
$1.6
million as of
December 30, 2017
increasing to
$2.5
million with the
second
advance on
January 16, 2018)
through maturity, with the remaining balance due on
October 13, 2022.
 
Outstanding borrowings under the
Credit Agreement bear interest, at the Company’s option, at either LIBOR, fixed for interest periods of one, two,
three
or
six
-month periods, plus
1.00%
to
2.00%,
or at the bank’s Base Rate, as defined, plus
0.00%
to
1.00%,
based upon the Company’s Consolidated Leverage Ratio, as defined. The Company is also required to pay commitment fees on unused portions of the credit agreement ranging from
0.15%
to
0.25%,
based on the Consolidated Leverage Ratio, as defined. The credit agreement includes representations, covenants and events of default that are customary for financing transactions of this nature. The effective interest rate on outstanding borrowings under the credit facility was
3.07%
at
December 30, 2017.
 
As of
December 3
0,
2017,
the Company had
$0.1
million outstanding in letters of credit and had available
$699.9
million of borrowing capacity under the Revolving Credit Facility. At
December 30, 2017,
the Company was in compliance with all covenants under the Credit Agreement.
 
Senior Notes
 
On
December 8, 2016,
the
Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold
€212
million aggregate principal amount of senior notes in
two
series. The funding date for the Euro denominated senior notes occurred on
December 8, 2016
for
€117
million in aggregate amount of
1.14%
Senior Notes, Series A, due
December 8, 2023 (
“Euro Senior Notes, Series A due
2023”
)
, and
€95
million in aggregate amount of
1.83%
Senior Notes, Series B due
December 8, 2028 (
“Euro Senior Notes, Series B due
2028”
)
(together, the “Euro Senior Notes”). Interest on the Euro Senior Notes is payable semiannually on
June 8
and
December 8,
commencing
June 8, 2017.
 
On
December 8, 2016,
the
Company entered into a Note Purchase Agreement, pursuant to which the Company issued and sold
$125
million aggregate principal amount of senior notes in
two
series. On
February 15, 2017,
$25
million in aggregate principal amount of
3.03%
Senior Notes, Series A, due
February 15, 2022 (
“U.S. Senior Notes, Series A due
2022”
)
, and
$100
million in aggregate principal amount of
3.74%
Senior Notes, Series B, due
February 15, 2027 (
“U.S. Senior Notes, Series B due
2027”
)
(together, the “U.S. Senior Notes due
2022
and
2027”
) were funded. Interest on the U.S. Senior Notes due
2022
and
2027
is payable semiannually on
February 15
and
August 15,
commencing
August 15, 2017.
 
On
November 15, 2017,
the Company entered into a Note Purchase Agreement pursuant to which the Company issued and sold
$175
million in aggregate principal amount of senior notes in
two
series. On
January 16, 2018,
$50
million aggregate principal amount of
3.48%
Senior Notes, Series A, due
February 15, 2025
(“U.S. Senior Notes, Series A due
2025”
)
and
$125
million in aggregate principal amount of
3.78%
Senior Notes, Series B, due
February 15, 2030 (
“U.S. Senior Notes, Series A due
2030”
)
(together the “U.S. Senior Notes due
2025
and
2030”
and with the Euro Senior Notes and the U.S. Senior Notes
2022
and
2027,
the “Senior Notes”) were funded. Interest on the U.S. Senior Notes due
2025
and
2030
will be payable on
February 15
and
August 15,
commencing on
August 15, 2018.
 
The Senior Notes have
not
been registered under the Securities Act, or applicable state securities laws. The Senior Notes are general unsecured senior obligations and rank equal in right of payment with all existing and future unsecured unsubordinated indebtedness of the
Company.
 
The Senior Notes are subject to certain customary covenants, including limitations on the
Company’s ability, with certain exceptions, to engage in mergers, consolidations, asset sales and transactions with affiliates, to engage in any business that would substantially change the general business of the Company, and to incur liens. In addition, the Company is required to satisfy certain financial covenants and tests relating to, among other matters, interest coverage and leverage. At
December 30, 2017,
the Company was in compliance with all covenants under the Senior Notes.
 
The
Company
may
redeem the Senior Notes upon the satisfaction of certain conditions and the payment of a make-whole amount to noteholders, and are required to offer to repurchase the Senior Notes at par following certain events, including a change of control.
 
Debt Issuance Costs
 
The
Company incurred debt issuance costs of
$1.6
million in relation to the Credit Agreement which, along with the remaining balance of debt issuance costs of the previous credit facility, are being amortized over the life of the Credit Agreement. The Company additionally incurred aggregate debt issuance costs of
$2.6
million in relation to the Senior Notes which are being amortized over the respective lives of the Series A and B notes.
 
Entrusted Loan
 
During
2014,
the
Company entered into an entrusted loan arrangement (“Entrusted Loan”) of
Chinese renminbi
110.0
million (approximately U.S.
$17.9
million) between
two
of its China legal entities, Littelfuse Semiconductor (“Wuxi”) Company (the “lender”) and Suzhou Littelfuse OVS Ltd. (the “borrower”), utilizing Bank of America, N.A., Shanghai Branch as agent. Direct borrowing and lending between
two
commonly owned commercial entities was strictly forbidden at the time under China’s regulations requiring the use of a
third
-party agent to enable loans between Chinese legal entities. As a result, the Entrusted Loan is reflected as both a long-term asset and long-term debt on the Company’s Consolidated Balance Sheets and is reflected in the investing and financing activities in its Consolidated Statements of Cash Flows. Interest expense and interest income will be recorded between the lender and borrower with
no
net impact on the Company’s Consolidated Statements of Income since the amounts will be offsetting. The loan interest rate per annum is
5.25%.
The Entrusted Loan is used to finance the operation and working capital needs of the borrower and matures in
November 2019.
The balance of the Entrusted Loan was paid off as of
September 30, 2017.
 
Interest paid on all
Company debt was approximately
$13.4
million,
$8.6
million, and
$4.1
million in
2017,
2016,
and
2015,
respectively.
 
Debt Maturities
 
Scheduled maturities of the
Company’s long-term debt for each of the
five
years succeeding
December 30, 2017
and thereafter are summarized as follows:
 
(in
thousands
)
 
Scheduled
Maturities
 
201
8
  $
6,250
 
201
9
   
6,250
 
20
20
   
6,250
 
202
1
   
6,250
 
202
2
   
122,500
 
202
3 and thereafter
   
352,992
 
    $
500,492