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Note 5 - Long-term Debt

6 Months Ended

Jul. 03, 2021

On May 17, 2019, we entered into a credit agreement (the “Current Credit Agreement”), which provides for a five-year secured term loan facility in an aggregate principal amount of $175.0 million and a five-year secured revolving loan facility in an aggregate principal amount of up to $75.0 million. Details of the term loan and the revolving loan (collectively, "long-term debt"), including the basis for interest, payment terms, and covenants are described in the Current Credit Agreement.

During the second quarter of fiscal 2021, we paid a required quarterly installment of $4.4 million on our long-term debt. The fair value of our long-term debt approximates the carrying value, which is reflected in our Consolidated Balance Sheets as follows:

	*July 3,*			*January 2,*
(In thousands)	*2021*			*2021*
Principal amount	$	167,500		$	171,875
Unamortized original issuance discount and debt costs		(994	)		(1,179	)
Less: Current portion of long-term debt		(17,154	)		(12,762	)
Long-term debt, net of current portion and unamortized debt issue costs	$	149,352		$	157,934

As of July 3, 2021, the effective interest rate on the term loan was 1.57%, and the effective interest rate on the revolving loan was 1.35%. We pay a commitment fee of 0.20% on the unused portion of the revolving loan. 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 3,*		*June 27,*		*July 3,*		*June 27,*
(In thousands)	*2021*		*2020*		*2021*		*2020*
Contractual interest	$	588	$	918	$	1,185	$	2,004
Amortization of original issuance discount and debt costs		92		105		184		208
Total interest expense related to long-term debt	$	680	$	1,023	$	1,369	$	2,212

Expected future principal payments are based on the schedule of required quarterly installments. As of July 3, 2021, expected future principal payments on our long-term debt were as follows:

Fiscal year	(in thousands)
2021 (Remaining 2 quarters)	$	8,750
2022		17,500
2023		17,500
2024		123,750
	$	167,500