XML 32 R19.htm IDEA: XBRL DOCUMENT
v3.20.4

Debt | 6 Months Ended
--- | ---
Jan. 02, 2021
Debt Disclosure [Abstract] |
Debt | Note 11. Debt As of January 2, 2021 and June 27, 2020, the Company’s long-term debt on the Consolidated Balance Sheets represented the carrying amount of the liability component of the Senior Convertible Notes, net of unamortized debt discounts and issuance costs. The following table presents the carrying amounts of the liability and equity components of our debt (in millions):
| January 2, 2021 |  | June 27, 2020
Principal amount of 1.00% Senior Convertible Notes | $ | 460.0 |  |  | $ | 460.0 |
Principal amount of 1.75% Senior Convertible Notes | 225.0 |  |  | 225.0 |
Unamortized discount of liability component | (68.2) |  |  | (79.1) |
Unamortized debt issuance cost | (4.4) |  |  | (5.0) |
Carrying amount of liability component | $ | 612.4 |  |  | $ | 600.9 |
Carrying amount of equity component (1) | $ | 136.8 |  |  | $ | 136.8 |
(1)Included in additional paid-in-capital on the Consolidated Balance Sheets. The Company was in compliance with all debt covenants as of January 2, 2021 and June 27, 2020. Revolving Credit Facility On May 5, 2020, we entered into a credit agreement (the Credit Agreement) with Wells Fargo Bank, National Association (Wells Fargo) as administrative agent, and other lender related parties. The Credit Agreement provides for a $300 million senior secured revolving credit facility, which matures on March 1, 2023. The Credit Agreement also provides that, under certain circumstances, we may incur term loans or increase the aggregate principal amount of revolving commitments by an aggregate amount of up to $200 million plus additional amounts so long as our secured net leverage ratio, determined on a pro forma basis does not exceed 1.50:1.00. The proceeds from the credit facility established under the Credit Agreement will be used for working capital and other general corporate purposes. The obligations under the Credit Agreement are secured by substantially all of our assets. Amounts outstanding under the Credit Agreement accrue interest at a rate equal to either, at our election, LIBOR plus a margin of 1.75% to 2.50% per annum, or a specified base rate plus a margin of 0.75% to 1.50%, in each case, depending on our consolidated secured leverage ratio. We are required to pay a commitment fee on the unutilized portion of the facility which ranges between 0.30% and 0.40% per annum depending on our consolidated secured leverage ratio. As of January 2, 2021 and June 27, 2020, we had no amounts outstanding under the Credit Agreement. 1.75% Senior Convertible Notes (2023 Notes) On May 29, 2018, the Company issued $225.0 million aggregate principal amount of 1.75% Senior Convertible Notes due 2023 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company issued $155.5 million aggregate principal of the 2023 Notes to certain holders of the 2033 Notes in exchange for $151.5 million principal of the 2033 Notes (the “Exchange Transaction”) and issued and sold $69.5 million aggregate principal amount of the 2023 Notes in a private placement to accredited institutional buyers (the Private Placement). The carrying value of the liability component at issuance was calculated as the present value of its cash flows using a discount rate of 5.3% based on the 5-year swap rate plus credit spread as of the issuance date. As of January 2, 2021, the expected remaining term of the 2023 Notes is 2.4 years. The proceeds from the 2023 Notes Private Placement amounted to $67.3 million after issuance costs. The 2023 Notes are an unsecured obligation of the Company and bear interest at an annual rate of 1.75% payable in cash semi-annually in arrears on June 1st and December 1st of each year, beginning December 1, 2018. The 2023 Notes mature on June 1, 2023 unless earlier converted, redeemed or repurchased. Based on quoted market prices as of January 2, 2021 and June 27, 2020, the fair value of the 2023 Notes was approximately $280.0 million and $251.4 million, respectively. The 2023 Notes are classified within Level 2 as they are not actively traded in markets. 1.00% Senior Convertible Notes (2024 Notes) On March 3, 2017, the Company issued $400.0 million aggregate principal amount of 1.00% Senior Convertible Notes due 2024 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. On March 22, 2017, the Company issued an additional $60.0 million upon exercise of the over-allotment option of the initial purchasers. The total proceeds from the 2024 Notes amounted to $451.1 million after issuance costs. The 2024 Notes are an unsecured obligation of the Company and bear interest at an annual rate of 1.00% payable in cash semi-annually in arrears on March 1 and September 1 of each year. The 2024 Notes mature on March 1, 2024 unless earlier converted or repurchased. The carrying value of the liability component at issuance was calculated as the present value of its cash flows using a discount rate of 4.8% based on the 7-year swap rate plus credit spread as of the issuance date. As of January 2, 2021, the expected remaining term of the 2024 Notes is 3.2 years. Based on quoted market prices as of January 2, 2021 and June 27, 2020, the fair value of the 2024 Notes was approximately $595.6 million and $523.3 million, respectively. The 2024 Notes are classified within Level 2 as they are not actively traded in markets. Interest Expense The following table presents the interest expense for contractual interest, amortization of debt issuance costs and accretion of debt discount (in millions):
| Three Months Ended |  | Six Months Ended
| January 2, 2021 |  | December 28, 2019 |  | January 2, 2021 |  | December 28, 2019
Interest expense-contractual interest | $ | 2.4 |  |  | $ | 2.2 |  |  | $ | 4.7 |  |  | $ | 4.3 |
Amortization of debt issuance cost | 0.5 |  |  | 0.4 |  |  | 1.0 |  |  | 0.7 |
Accretion of debt discount | 5.5 |  |  | 5.2 |  |  | 10.8 |  |  | 10.3 |

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration