Annual report pursuant to Section 13 and 15(d)

Note 8 - Long-term Debt

v3.7.0.1
Note 8 - Long-term Debt
12 Months Ended
Dec. 25, 2016
Notes to Financial Statements  
Debt Disclosure [Text Block]
(8)
Long-term
Debt
 
Long-term debt consists of the following (amounts in thousands):
 
 
 
December 25,
 
 
December 27,
 
 
 
2016
 
 
2015
 
                 
Senior Credit Facility:
 
 
 
 
 
 
 
 
Revolving credit facility
  $
25,000
    $
-
 
Less current maturities
   
-
     
-
 
    $
25,000
    $
-
 
 
As of
December
25,
2016,
the Company had
$25.0
million of outstanding indebtedness under its prior senior credit facility with approximately
$70.9
million of borrowings available, net of outstanding letters of credit of approximately
$4.1
million. As of
December
25,
2016,
the weighted average interest rate on the Company’s outstanding debt was
2.7%
and the weighted average interest rate on our outstanding letters of credit was
2.13%.
In addition, the fee on the Company’s prior senior credit facility was
0.2%.
 
On
February
14,
2012,
the Company entered into a Second Amended and Restated Credit Agreement with Wells Fargo Bank, as administrative agent, and certain other lenders (the prior Credit Agreement). The prior Credit Agreement allowed for loan advances plus outstanding letters of credit of up to
$100.0
million to be outstanding at any time that the conditions for borrowings were met. The prior Credit Agreement had a maturity date of
February
14,
2017.
The prior Credit Agreement set the interest rates applicable to borrowings based on the Company’s actual leverage ratio, ranging (a) from
2.00%
to
2.75%
above the applicable LIBOR rate or (b) at the Company’s option, from
1.00%
to
1.75%
above the applicable base rate. The prior Credit Agreement was terminated on
February
2,
2017.
 
On
February
 
2,
2017,
the Company entered into a credit agreement with Wells Fargo Bank, National Association as administrative agent, and certain other lenders (the Credit Agreement). The Credit Agreement provides for a revolving credit facility of
$90.0
million with a
$5.0
million subfacility for letters of credit and a
$5.0
million subfacility for swingline loans. Subject to the satisfaction of certain conditions and lender consent, the revolving credit facility
may
be increased up to a maximum of
$150.0
million. The Credit Agreement has a maturity date of
February
2,
2022.
At the Company’s option, revolving loans
may
bear interest at (i) LIBOR, plus an applicable margin or (ii) the highest of (a) the rate publicly announced by Wells Fargo as its prime rate, (b) the average published federal funds rate in effect on such day plus
0.50%
and (c)
one
month LIBOR plus
1.00%,
plus an applicable margin. The applicable margin is based on the Company’s actual leverage ratio, ranging (a) from
1.50%
to
2.25%
above the applicable LIBOR rate or (b) at the Company’s option, from
0.50%
to
1.25%
above the applicable base rate.
 
The Credit Agreement contains customary representations and affirmative and negative covenants (including limitations on indebtedness and liens) as well as financial covenants requiring a minimum fixed coverage charge ratio and limiting the Company’s consolidated leverage ratio. The Credit Agreement also contains events of default customary for credit facilities of this type (with customary grace periods, as applicable), including nonpayment of principal or interest when due; material incorrectness of representations and warranties when made; breach of covenants; bankruptcy and insolvency; unsatisfied ERISA obligations; unstayed material judgment beyond specified periods; default under other material indebtedness; and certain changes of control of the Company. If any event of default occurs and is not cured within the applicable grace period, or waived, the outstanding loans
may
be accelerated by lenders holding a majority of the commitments under the Credit Agreement and the lenders’ commitments
may
be terminated. The obligations under the Credit Agreement are guaranteed by certain of the Company’s subsidiaries (the Guarantors), and are secured by a lien on substantially all of the Company’s personal property assets other than any equity interest in current and future subsidiaries of the Company.