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Note 10 - Credit Agreements

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

10. Credit Agreements

Short-term

borrowings are included in the consolidated balance sheets as follows:

		December 31,
		2016				2015
ABL facility		$	-			$	-
Other lines of credit			31,198				8,594
Total		$	31,198			$	8,594

Long-term borrowi

ngs are included in the consolidated balance sheets as follows:

		December 31,
		2016				2015
Term loan		$	929,000			$	954,000
Original issue discount and deferred financing costs			(26,677	)			(29,905	)
ABL facility			100,000				100,000
Capital lease obligation			4,647				1,694
Other			14,753				12,000
Total			1,021,723				1,037,789
Less: current portion of debt			14,399				500
Less: current portion of capital lease obligation			566				157
Total		$	1,006,758			$	1,037,132

Maturities of long-term borrowings outstanding at

December

31,

2016,

are as follows:

201 7		$	14,965
201 8			745
201 9			639
20 20			100,547
After 20 20			931,504
Total		$	1,048,400

The

Company’s credit agreements provided for a

$1,200,000

term loan B credit facility (Term Loan) and include a

$300,000

uncommitted incremental term loan facility. In

November

2016,

the Company amended its Term Loan to extend the maturity date from

May

31,

2020

to

May

31,

2023.

The Term Loan is guaranteed by all of the Company’s wholly-owned domestic restricted subsidiaries, and is secured by associated collateral agreements which pledge a

first

priority lien on virtually all of the Company’s assets, including fixed assets and intangibles, other than all cash, trade accounts receivable, inventory, and other current assets and proceeds thereof, which are secured by a

second

priority lien. The Term Loan initially bore interest at rates based upon either a base rate plus an applicable margin of

1.75%

or adjusted LIBOR rate plus an applicable margin of

2.75%,

subject to a LIBOR floor of

0.75%.

Beginning in the

second

quarter of

2014,

and measured each quarterly period thereafter, the applicable margin related to base rate loans is reduced to

1.50%

and the applicable margin related to LIBOR rate loans is reduced to

2.50%,

in each case, if the Company’s net debt leverage ratio, as defined in the Term Loan, falls below

3.00

to

1.00

for that measurement period.

Because the Company

’s net debt leverage ratio was below

3.00

to

1.00

on

April

1,

2014,

it realized a

25

basis point reduction in borrowing costs in the

second

quarter of

2014.

As a result, the Company recorded a cumulative catch-up gain of

$16,014

in the

second

quarter of

2014,

which represents the total cash interest savings over the remaining term of the loan, as the Company projected the net debt leverage ratio to remain below

3.00

to

1.00

using current forecasts at that time. The gain was recorded as original issue discount on long-term borrowings in the consolidated balance sheets and as a gain on change in contractual interest rate in the consolidated statements of comprehensive income. 

Because the Company

’s net debt leverage ratio was above

3.00

to

1.00

on

July

1,

2015,

it realized a

25

basis point increase in borrowing costs in the

third

quarter of

2015.

As a result, the Company recorded a cumulative catch-up loss of

$2,381

in the

third

quarter of

2015,

which represents the additional cash interest expected to be paid while the net debt leverage ratio is expected to be above

3.00

to

1.00

using current forecasts at that time. The loss was recorded against original issue discount on long-term borrowings in the consolidated balance sheets and as a loss on change in contractual interest rate in the consolidated statements of comprehensive income.

As the Company

’s net debt leverage ratio continued to be above

3.00

to

1.00

on

July

1,

2016,

the Company recorded a cumulative catch-up loss of

$2,957

in the

third

quarter of

2016,

which represents the additional cash interest expected to be paid while the net debt leverage ratio is expected to be above

3.00

to

1.00

using current forecasts at that time. The loss was recorded against original issue discount on long-term borrowings in the consolidated balance sheets and as a loss on change in contractual interest rate in the consolidated statements of comprehensive income. The Company’s net debt leverage ratio as of

December

31,

2016

was above

3.00

to

1.00.

I

n

May

2015,

the Company amended certain provisions and covenants of the Term Loan. In connection with this amendment and in accordance with ASC

470

-

50,

Debt Modifications and Extinguishments

, the Company capitalized

$1,528

of fees paid to creditors as original issue discount on long-term borrowings and expensed

$49

of transaction fees in the

second

quarter of

2015.

In

November

2016,

the Company amended its Term Loan to extend the maturity date from

May

31,

2020

to

May

31,

2023.

In connection with this amendment and in accordance with ASC

470

-

50,

Debt Modifications and Extinguishments

, the Company capitalized

$4,242

of fees paid to creditors as original issue discount on long-term borrowings and expensed

$315

of transaction fees in the

fourth

quarter of

2016.

As of

December

31,

2016,

the Company is in compliance with all covenants of the Term Loan. There are no financial maintenance covenants on the Term Loan.

T

he Company’s credit agreements also originally provided for a

$150,000

senior secured ABL revolving credit facility (ABL Facility). The maturity date of the ABL Facility originally was

May

31,

2018.

Borrowings under the ABL Facility are guaranteed by all of the Company’s wholly-owned domestic restricted subsidiaries, and are secured by associated collateral agreements which pledge a

first

priority lien on all cash, trade accounts receivable, inventory, and other current assets and proceeds thereof, and a

second

priority lien on all other assets, including fixed assets and intangibles of the Company and certain domestic subsidiaries. ABL Facility borrowings initially bore interest at rates based upon either a base rate plus an applicable margin of

1.00%

or adjusted LIBOR rate plus an applicable margin of

2.00%,

in each case, subject to adjustments based upon average availability under the ABL Facility.

I

n

May

2015,

the Company amended its ABL Facility. The amendment (i) increased the ABL Facility from

$150,000

to

$250,000

(Amended ABL Facility), (ii) extended the maturity date from

May

31,

2018

to

May

29,

2020,

(iii) increased the uncommitted incremental facility from

$50,000

to

$100,000,

(iv) reduced the interest rate spread by

50

basis points and (v) reduced the unused line fee by

12.5

basis points across all tiers. Additionally, the amendment relaxes certain restrictions on the Company’s ability to, among other things, (i) make additional investments and acquisitions (including foreign acquisitions), (ii) make restricted payments and (iii) incur additional secured and unsecured debt (including foreign subsidiary debt). In connection with this amendment and in accordance with ASC

470

-

50,

the Company capitalized

$540

of new debt issuance costs in

2015.

I

n

May

2015,

the Company borrowed

$100,000

under the Amended ABL Facility, the proceeds of which were used as a voluntary prepayment towards the Term Loan. As of

December

31,

2016,

there was

$100,000

outstanding under the Amended ABL Facility, leaving

$145,593

of availability, net of outstanding letters of credit.

I

n

April,

September

and

December

2014,

the Company made voluntary prepayments of the Term Loan of

$12,000,

$50,000

and

$25,000,

respectively, with available cash on hand that was applied to future principal amortizations and the Excess Cash Flow payment requirement in the Term Loan. As a result of the prepayments, the Company wrote off

$2,084

of original issue discount and capitalized debt issuance costs during the year ended

December

31,

2014

as a loss on extinguishment of debt in the consolidated statement of comprehensive income.

I

n

March

and

May

2015,

the Company made voluntary prepayments of the Term Loan of

$50,000

and

$100,000,

respectively, which were applied to the Excess Cash Flow payment requirement in the Term Loan. As a result of the prepayments, the Company wrote off

$4,795

of original issue discount and capitalized debt issuance costs during the year ended

December

31,

2015

as a loss on extinguishment of debt in the consolidated statement of comprehensive income.

In

November

2016,

the Company made a voluntary prepayment of the Term Loan of

$25,000,

which will be applied to the Excess Cash Flow payment requirement in the Term Loan. As a result of the prepay

ment, the Company wrote off

$574

of original issue discount and capitalized debt issuance costs during the year ended

December

31,

2016

as a loss on extinguishment of debt in the consolidated statement of comprehensive income.

As of

December

31,

201

6

and

December

31,

2015,

short-term borrowings consisted primarily of borrowings by our foreign subsidiaries on local lines of credit, which totaled

$31,198

and

$8,594,

respectively.

X

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.19,20,22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

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- References

No definition available.

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