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Debt | 9 Months Ended
--- | ---
Mar. 29, 2025
Debt Disclosure [Abstract] |
Debt | Note 11. Debt As of March 29, 2025 and June 29, 2024, the Company’s debt on the Consolidated Balance Sheets represented the carrying amount of the Senior Convertible and Senior Notes, net of unamortized debt discount and issuance costs, as follows (in millions):
| March 29, 2025 |  | June 29, 2024
Principal amount of 1.625% Senior Convertible Notes | $ | 250.0 |  |  | $ | — |
Unamortized 1.625% Senior Convertible Notes debt discount | (4.5) |  |  | — |
Unamortized 1.625% Senior Convertible Notes debt issuance cost | (0.7) |  |  | — |
Short-term debt | $ | 244.8 |  |  | $ | — |
Principal amount of 3.75% Senior Notes | $ | 400.0 |  |  | $ | 400.0 |
Unamortized 3.75% Senior Notes debt issuance cost | (3.9) |  |  | (4.6) |
Principal amount of 1.625% Senior Convertible Notes | — |  |  | 250.0 |
Unamortized 1.625% Senior Convertible Notes debt discount | — |  |  | (8.1) |
Unamortized 1.625% Senior Convertible Notes debt issuance cost | — |  |  | (1.3) |
Long-term debt | $ | 396.1 |  |  | $ | 636.0 |
The Company was in compliance with all debt covenants as of March 29, 2025 and June 29, 2024. 1.625% Senior Convertible Notes (2026 Notes) On March 6, 2023, the Company issued $250.0 million aggregate principal amount of 1.625% Senior Convertible Notes due 2026 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company issued $132.0 million aggregate principal amount of the 2026 Notes to certain holders of the 1.00% Senior Convertible Notes due 2024 (2024 Notes) in exchange for $127.5 million principal amount of the 2024 Notes (the Exchange Transaction) and issued and sold $118.0 million aggregate principal amount of the 2026 Notes in a private placement to accredited institutional buyers (the Subscription Transactions). The Exchange Transaction was accounted for as a modification. The $127.5 million principal of the 2024 Notes was reduced by $10.1 million, with offsetting increase to additional paid-in capital, to account for the increase in the fair value of the embedded conversion option in the modification. The increase in principal and coupon interest, along with the increased option value, totaled $14.6 million and is a direct reduction from the carrying amount of the debt on the Consolidated Balance Sheets. This amount will be accreted as an adjustment to interest expense on a straight-line basis and will accrete up to the full face value of the 2026 Notes at maturity. The proceeds of the Subscription Transactions amounted to $113.8 million after issuance costs of $4.2 million. The exchange resulted in $2.2 million of the issuance costs recorded as Loss on convertible note modification in the Consolidated Statements of Operations. The remaining issuance costs of $2.0 million, as well as $0.3 million of unamortized costs carried over from the 2024 Notes at the exchange date were capitalized within Long-term debt (as a contra-balance) on the Consolidated Balance Sheets and will be amortized to interest expense using the straight-line method until maturity. The 2026 Notes are an unsecured obligation of the Company and bear interest at an annual rate of 1.625%, payable semi-annually in arrears on March 15 and September 15 of each year, beginning September 15, 2023. The 2026 Notes will mature on March 15, 2026 unless earlier converted, redeemed or repurchased. As of March 29, 2025, the expected remaining term of the 2026 Notes is less than 1.0 year. 3.75% Senior Notes (2029 Notes) On September 29, 2021, the Company issued $400.0 million aggregate principal amount of 3.75% Senior Notes due 2029 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. In connection with the issuance of the 2029 Notes, the Company incurred $7.0 million of issuance costs. The debt issuance costs were capitalized and will be amortized to interest expense using the straight-line method until maturity. The 2029 Notes are an unsecured obligation of the Company and bear annual interest of 3.75%, payable semi-annually in arrears on April 1 and October 1 of each year, beginning April 1, 2022. The 2029 Notes will mature on October 1, 2029 unless earlier redeemed or repurchased. As of March 29, 2025, the expected remaining term of the 2029 Notes is 4.5 years. 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 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). In connection with the issuance of the 2023 Notes, the Company incurred $2.2 million of issuance costs. The debt issuance costs were capitalized and amortized to interest expense using the straight-line method from the issuance date through maturity on June 1, 2023. During fiscal 2022, the Company entered into separate privately-negotiated agreements with certain holders of the 2023 Notes, settling $156.9 million principal in exchange for an aggregate of 2.0 million shares of its common stock, par value $0.001 per share, and $168.5 million in cash. On June 1, 2023, the remaining 2023 Notes principal of $68.1 million was retired upon maturity. 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 of $8.9 million. The debt issuance costs were capitalized and amortized to interest expense using the straight-line method from the issuance date through maturity on March 1, 2024. During fiscal 2022, the Company entered into separate privately-negotiated agreements with certain holders of the 2024 Notes, settling $236.1 million principal in exchange for an aggregate of 8.6 million shares of its common stock, par value $0.001 per share, and $178.8 million in cash. During fiscal 2023 the Exchange Transaction resulted in the reduction of $127.5 million principal of the 2024 Notes. On March 1, 2024, the Company converted two notes at the request of the respective note-holders and retired the remaining 2024 Notes principal of $96.4 million upon maturity. Senior Secured Asset-Based Revolving Credit Facility On December 30, 2021, 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 senior secured asset-based revolving credit facility in a maximum aggregate amount of $300 million and matures on December 30, 2026. The Credit Agreement also provides that, under certain circumstances, the Company may increase the aggregate amount of revolving commitments thereunder by an aggregate amount of up to $100 million so long as certain conditions are met. 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 the assets of the Company and those of its subsidiaries that are borrowers and guarantors under the Credit Agreement. Amounts outstanding under the Credit Agreement accrue interest as follows: (i) if the amounts outstanding are denominated in U.S. Dollars, at a per annum rate equal to either, at the Company’s election, Term Secured Overnight Financing Rate (SOFR) plus a margin of 1.35% to 1.85% per annum, or a specified base rate plus a margin of 0.25% to 0.75%, in each case, depending on the average excess availability under the facility, (ii) if the amounts outstanding are denominated in Sterling, at a per annum rate equal to the Sterling Overnight Interbank Average Rate (SONIA) plus a margin of 1.2825% to 1.7825%, depending on the average excess availability under the facility, (iii) if the amounts outstanding are denominated in Euros, at a per annum rate equal to the Euro Interbank Offered Rate plus a margin of 1.25% to 1.75%, depending on the average excess availability under the facility, or (iv) if the amounts outstanding are denominated in Canadian Dollars, at a per annum rate equal to either, at the Company’s election, the adjusted Term Canadian Overnight Repo Rate Average (CORRA) plus a margin of 1.25% to 1.75%, or a specified base rate plus a margin of 0.25% to 0.75%, in each case, depending on the average excess availability under the facility. The covenants of the Credit Agreement include customary restrictive covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments. In addition, the Credit Agreement contains certain financial covenants that require the Company to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 if excess availability under the facility is less than the greater of 10% of the lesser of maximum revolver amount and borrowing base and $20 million. As of March 29, 2025, we had no borrowings under this facility and our available borrowing capacity was approximately $165.6 million, net of outstanding standby letters of credit of $4.4 million. Interest Expense The following table presents the interest expense for contractual interest, amortization of debt issuance cost, accretion of debt discount and other (in millions):
| Three Months Ended |  | Nine Months Ended
| March 29, 2025 |  | March 30, 2024 |  | March 29, 2025 |  | March 30, 2024
Interest expense-contractual interest | $ | 4.8 |  |  | $ | 4.9 |  |  | $ | 14.3 |  |  | $ | 14.9 |
Amortization of debt issuance cost | 0.6 |  |  | 0.7 |  |  | 1.8 |  |  | 2.0 |
Accretion of debt discount | 1.2 |  |  | 1.2 |  |  | 3.6 |  |  | 3.6 |
Other | 0.9 |  |  | 0.9 |  |  | 2.8 |  |  | 2.9 |
Total interest expense | $ | 7.5 |  |  | $ | 7.7 |  |  | $ | 22.5 |  |  | $ | 23.4 |

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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/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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