Debt, Finance Lease Obligations and Other Financing

3 Months Ended

Jan. 02, 2021

Debt and Lease Obligation [Abstract]

Debt, Finance Lease Obligations and Other Financing

Debt, Finance Lease and Other Financing Obligations

Debt, finance lease and other financing obligations as of January 2, 2021 and October 3, 2020, consisted of the following (in thousands):


	January 2, 2021		October 3, 2020
4.05% Senior Notes, due June 15, 2025	$	100,000	$	100,000
4.22% Senior Notes, due June 15, 2028	50,000		50,000
Borrowings under the revolving commitment	—		—
Term Loans, due April 28, 2021	138,000		138,000
Finance lease and other financing obligations	49,939		48,435
Unamortized deferred financing fees	(1,383)		(1,631)
Total obligations	336,556		334,804
Less: current portion	(148,408)		(146,829)
Long-term debt, finance lease and other financing obligations, net of current portion	$	188,148	$	187,975

On June 15, 2018, the Company entered into a Note Purchase Agreement (the “2018 NPA”) pursuant to which it issued an aggregate of $150.0 million in principal amount of unsecured senior notes, consisting of $100.0 million in principal amount of 4.05% Series A Senior Notes, due on June 15, 2025, and $50.0 million in principal amount of 4.22% Series B Senior Notes, due on June 15, 2028 (collectively, the “2018 Notes”), in a private placement. The 2018 NPA includes customary operational and financial covenants with which the Company is required to comply, including, among others, maintenance of certain financial ratios such as a total leverage ratio and a minimum interest coverage ratio. The 2018 Notes may be prepaid in whole or in part at any time, subject to payment of a make-whole amount; interest on the 2018 Notes is payable semiannually. As of January 2, 2021, the Company was in compliance with the covenants under the 2018 NPA.

On May 15, 2019, the Company refinanced its then-existing senior unsecured revolving credit facility by entering into a new 5-year senior unsecured revolving credit facility (referred to as the "Credit Facility"), which expanded the maximum commitment from $300.0 million to $350.0 million and extended the maturity from July 5, 2021 to May 15, 2024. The maximum commitment under the Credit Facility may be further increased to $600.0 million, generally by mutual agreement of the Company and the lenders, subject to certain customary conditions. The increase of the maximum facility is not able to be exercised until after termination of the 364 day delayed draw term loans ("Term Loans"), as outlined in Amendment No. 1 to

the Credit Agreement (the "Amendment") subsequently discussed. During the three months ended January 2, 2021, the highest daily borrowing was $3.0 million and the average daily borrowings were $0.1 million. The Company borrowed $3.0 million and repaid $3.0 million of revolving borrowings ("revolving commitment") under the Credit Facility during the three months ended January 2, 2021. As of January 2, 2021, the Company was in compliance with all financial covenants relating to the Credit Agreement, which are generally consistent with those in the 2018 NPA discussed above. The Company is required to pay a commitment fee on the daily unused revolving commitment based on the Company's leverage ratio; the fee was 0.125% as of January 2, 2021. Subsequent to the first quarter of fiscal 2021, the Company terminated the Term Loans through repayment of the $138.0 million outstanding using borrowings from the revolving commitment under the Credit Facility on January 29, 2021. Refer to Note 15, "Subsequent Event," for further information.

To further ensure our ability to meet our working capital and fixed capital requirements, on April 29, 2020, the Company entered into the Amendment in response to the COVID-19 outbreak, which amends the Credit Agreement, dated as of May 15, 2019. The Amendment modifies certain provisions of the Credit Facility to, among other things, provide for a $138.0 million unsecured delayed draw term loans facility. Term Loans borrowed under the new facility were funded in a single draw on May 4, 2020 and will mature on April 28, 2021. Outstanding Term Loans will bear interest, at the Company’s option, at a eurocurrency rate (subject to a floor of 1.0%) plus a margin of 1.75% per annum or at a base rate (subject to a floor of 2.0%) plus a margin of 0.75% per annum. The proceeds of the Term Loans were used to prepay outstanding revolving and swing line loans under the Credit Facility and for the general corporate purposes of the Company and its subsidiaries. The $138.0 million of outstanding Term Loans as of January 2, 2021 was subject to a 2.75% per annum interest rate. As previously noted, the Company terminated the Term Loans through repayment of the $138.0 million outstanding using borrowings from the revolving commitment under the Credit Facility on January 29, 2021. Refer to Note 15, "Subsequent Event," for further information.

The fair value of the Company’s debt, excluding finance lease and other financing obligations, was $302.5 million and $299.3 million as of January 2, 2021 and October 3, 2020, respectively. The carrying value of the Company's debt, excluding finance lease and other financing obligations, was $288.0 million as of January 2, 2021 and October 3, 2020. If measured at fair value in the financial statements, the Company's debt would be classified as Level 2 in the fair value hierarchy. Refer to Note 4, "Derivatives and Fair Value Measurements," for further information regarding the Company's fair value calculations and classifications.