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Debt | 6 Months Ended
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Jun. 29, 2018
Debt Disclosure [Abstract] |
DEBT | DEBT Long-term debt is comprised of the following (in thousands):
| June 29, 2018 |  | December 29, 2017
Senior secured term loan A | $ | 321,094 |  |  | $ | 335,157 |
Senior secured term loan B | 812,286 |  |  | 873,286 |
9.125% senior notes due 2023 | 360,000 |  |  | 360,000 |
Revolving line of credit | 74,000 |  |  | 74,000 |
Unamortized discount on term loan B and debt issuance costs | (28,690 | ) |  | (33,278 | )
Total debt | 1,538,690 |  |  | 1,609,165 |
Current portion of long-term debt | (35,156 | ) |  | (30,469 | )
Total long-term debt | $ | 1,503,534 |  |  | $ | 1,578,696 |
Senior Secured Credit Facilities The Company has senior secured credit facilities (the “Senior Secured Credit Facilities”) consisting of (i) a $200 million revolving credit facility (the “Revolving Credit Facility”), (ii) a $375 million term loan A facility (the “TLA Facility”), and (iii) a $1,025 million term loan B facility (the “TLB Facility”). The TLA Facility and TLB Facility are collectively referred to as the “Term Loan Facilities.” The TLB facility was issued at a 1% discount. On June 8, 2018, the Company amended the Senior Secured Credit Facilities to permit the sale of the AS&O Product Line, provided that the net cash proceeds from the sale be applied first, to redeem all of the Company’s outstanding 9.125% Senior Notes due 2023, second to repay the outstanding balance of the Company’s Revolving Credit Facility, and third, to the extent of any remaining net cash proceeds, to prepay outstanding loans under the TLB Facility. The amendment also amends the definition of adjusted EBITDA (as defined in the Senior Secured Credit Facilities) to permit adjustments consisting of certain non-recurring actual expenses incurred in connection with the sale of the AS&O Product Line. The Company completed the sale of the AS&O Product Line on July 2, 2018 and subsequently utilized the net cash proceeds to repay the debt in accordance with the amended terms of the Senior Secured Credit Facilities. Refer to Note 17 “Subsequent Events” for additional information. Revolving Credit Facility The Revolving Credit Facility matures on October 27, 2020. The Revolving Credit Facility also includes a $15 million sublimit for swingline loans and a $25 million sublimit for standby letters of credit. The Company is required to pay a commitment fee on the unused portion of the Revolving Credit Facility, which will range between 0.175% and 0.25%, depending on the Company’s Total Net Leverage Ratio (as defined in the Senior Secured Credit Facilities agreement). Interest rates on the Revolving Credit Facility, as well as the TLA Facility, are at the Company’s option, either at: (i) the prime rate plus the applicable margin, which will range between 0.75% and 2.25%, based on the Company’s Total Net Leverage Ratio, or (ii) the applicable LIBOR rate plus the applicable margin, which will range between 1.75% and 3.25%, based on the Company’s Total Net Leverage Ratio. As of June 29, 2018, the Company had $74 million million of outstanding borrowings on the Revolving Credit Facility and an available borrowing capacity of $116.8 million after giving effect to $9.2 million of outstanding standby letters of credit. As of June 29, 2018, the weighted average interest rate on all outstanding borrowings under the Revolving Credit Facility was 5.34%. Subject to certain conditions, commitments under the Revolving Credit Facility may be increased through an incremental revolving facility so long as, on a pro forma basis, the Company’s first lien net leverage ratio does not exceed 4.25:1.00. The outstanding amount of the Revolving Credit Facility approximated its fair value as of June 29, 2018 based upon the debt being variable rate and short-term in nature. (5.) DEBT (Continued) Term Loan Facilities The TLA Facility and TLB Facility mature on October 27, 2021 and October 27, 2022, respectively. Interest rates on the TLB Facility are, at the Company’s option, either at: (i) the prime rate plus 2.25% or (ii) the applicable LIBOR rate plus 3.25%, with LIBOR subject to a 1.00% floor. As of June 29, 2018, the interest rates on the TLA Facility and TLB Facility were 5.36% and 5.30%, respectively. Additionally, if the Company receives both (a) a public corporate family credit rating from Moody’s Investors Services, Inc. of “B2” (stable outlook) or higher and (b) a public corporate credit rating from Standard & Poor’s Financial Services LLC of “B” (stable outlook) or higher, the interest rate margins for the TLB Facility will step down by an additional 25 basis points. Refer to Note 17 “Subsequent Events” for additional information. Subject to certain conditions, one or more incremental term loan facilities may be added to the Term Loan Facilities so long as, on a pro forma basis, the Company’s first lien net leverage ratio does not exceed 4.25:1.00. As of June 29, 2018, the estimated fair value of the TLB Facility was approximately $815 million, based on quoted market prices for the debt, recent sales prices for the debt and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as Level 2 measurements within the fair value hierarchy. The par amount of the TLA Facility approximated its fair value as of June 29, 2018 based upon the debt being variable rate in nature. Covenants The Revolving Credit Facility and TLA Facility contain covenants requiring (A) a maximum Total Net Leverage Ratio of 6.0:1.00, subject to periodic step downs beginning in the third quarter of 2018 and (B) a minimum interest coverage ratio of adjusted EBITDA (as defined in the Senior Secured Credit Facilities) to interest expense of not less than 2.75:1.00 subject to a step up beginning in the first quarter of 2019. As of June 29, 2018, the Company was in compliance with these financial covenants. The TLB Facility does not contain any financial maintenance covenants. The Senior Secured Credit Facilities also contain negative covenants that restrict the Company’s ability to (i) incur additional indebtedness; (ii) create certain liens; (iii) consolidate or merge; (iv) sell assets, including capital stock of the Company’s subsidiaries; (v) engage in transactions with the Company’s affiliates; (vi) create restrictions on the payment of dividends or other amounts from the Company’s restricted subsidiaries; (vii) pay dividends on capital stock or redeem, repurchase or retire capital stock; (viii) pay, prepay, repurchase or retire certain subordinated indebtedness; (ix) make investments, loans, advances and acquisitions; (x) make certain amendments or modifications to the organizational documents of the Company or its subsidiaries or the documentation governing other senior indebtedness of the Company; and (xi) change the Company’s type of business. These negative covenants are subject to a number of limitations and exceptions that are described in the Senior Secured Credit Facilities agreement. As of June 29, 2018, the Company was in compliance with all negative covenants under the Senior Secured Credit Facilities. The Senior Secured Credit Facilities provide for customary events of default. Upon the occurrence and during the continuance of an event of default, the outstanding advances and all other obligations under the Senior Secured Credit Facilities become immediately due and payable. 9.125% Senior Notes due 2023 On October 27, 2015, the Company completed a private offering of $360 million aggregate principal amount of 9.125% senior notes due on November 1, 2023 (the “Senior Notes”). All of the Senior Notes are outstanding as of June 29, 2018. On June 8, 2018, the Company gave notice of a conditional full redemption for all of the Senior Notes. The redemption price for the Senior Notes is 100% of the principal amount of the Senior Notes plus the applicable premium (as set forth in the indenture governing the Senior Notes) and accrued and unpaid interest through the redemption date. The redemption was conditioned on the closing of the sale of the AS&O Product Line. On July 10, 2018, the Company completed the redemption in full of the Senior Notes. Refer to Note 17 “Subsequent Events” for additional information. As of June 29, 2018, the estimated fair value of the Senior Notes was approximately $392 million, based on quoted market prices of these Senior Notes, recent sales prices for the Senior Notes and consideration of comparable debt instruments with similar interest rates and trading frequency, among other factors, and is classified as Level 2 measurements within the fair value hierarchy. The indenture for the Senior Notes contain certain restrictive covenants and provides for customary events of default, subject in certain cases to customary cure periods, as a result of which the Senior Notes and any unpaid interest would become due and payable. As of June 29, 2018, the Company was in compliance with all restrictive covenants under the indenture governing the Senior Notes. (5.) DEBT (Continued) Contractual maturities under the Senior Secured Credit Facilities and Senior Notes for the remainder of 2018 and the next four years and thereafter, excluding any discounts or premiums, as of June 29, 2018 are as follows (in thousands):
|  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | After 2022
Future minimum principal payments |  | $ | 16,406 |  |  | $ | 37,500 |  |  | $ | 111,500 |  |  | $ | 229,688 |  |  | $ | 812,286 |  |  | $ | 360,000 |
Debt Issuance Costs and Discounts The change in deferred debt issuance costs related to the Revolving Credit Facility is as follows (in thousands):
December 29, 2017 | $ | 2,808 |
Amortization during the period | (495 | )
June 29, 2018 | $ | 2,313 |
The change in unamortized discount and debt issuance costs related to the Term Loan Facilities and Senior Notes is as follows (in thousands):
| Debt Issuance Costs |  | Unamortized Discount on TLB Facility |  | Total
December 29, 2017 | $ | 26,889 |  |  | $ | 6,389 |  |  | $ | 33,278 |
Write-off of debt issuance costs and unamortized discount(1) | (1,039 | ) |  | (435 | ) |  | (1,474 | )
Amortization during the period | (2,544 | ) |  | (570 | ) |  | (3,114 | )
June 29, 2018 | $ | 23,306 |  |  | $ | 5,384 |  |  | $ | 28,690 |
(1) | The Company prepaid portions of its TLB Facility during 2018 and 2017. The Company recognized losses from extinguishment of debt during the three and six months ended June 29, 2018 of $0.4 million and $1.5 million, respectively. The Company recognized losses from extinguishment of debt during the three and six months ended June 30, 2017 of $0.9 million and $2.5 million, respectively. The loss from extinguishment of debt represents the portion of the unamortized discount and debt issuance costs related to the portion of the TLB Facility that was prepaid and is included in Interest Expense in the accompanying Condensed Consolidated Statements of Operations.
Interest Rate Swap During 2016, the Company entered into a three-year $200 million interest rate swap to hedge against potential changes in cash flows on the outstanding variable rate debt, which is indexed to the one-month LIBOR rate. The variable rate received on the interest rate swap and the variable rate paid on the outstanding debt will have the same rate of interest, excluding the credit spread, and will reset and pay interest on the same date. The swap is being accounted for as a cash flow hedge. Information regarding the Company’s outstanding interest rate swap designated as a cash flow hedge as of June 29, 2018 is as follows (dollars in thousands):
Notional Amount |  | Start Date |  | End Date |  | Pay Fixed Rate |  | Receive Current Floating Rate |  | Fair Value |  | Balance Sheet Location
$ | 200,000 |  |  | Jun-17 |  | Jun-20 |  | 1.1325 | % |  | 2.1029 | % |  | $ | 5,756 |  |  | Other Long-Term Assets
The estimated fair value of the interest rate swap agreement represents the amount the Company would receive (pay) to terminate the contract. No portion of the change in fair value of the Company’s interest rate swap during the quarters ended June 29, 2018 and June 30, 2017 was considered ineffective. The amounts recorded to Interest Expense during the six months ended June 29, 2018 and June 30, 2017 related to the Company’s interest rate swap were reductions of $0.6 million and $0.3 million, respectively. The estimated Accumulated Other Comprehensive Income related to the Company’s interest rate swaps that is expected to be reclassified into earnings within the next twelve months is a $2.5 million gain.

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- 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 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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