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Loans Payable and Long-Term Debt | 12 Months Ended
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Apr. 30, 2018
Debt Disclosure [Abstract] |
Loans Payable and Long-Term Debt | Loans Payable and Long-Term Debt Maturities of long-term debt are as follows:
| FISCAL YEARS ENDING APRIL 30 |  |
(in thousands) | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 AND THERE- AFTER |  | TOTAL OUTSTANDING
Term loans | $ | — |  |  | $ | 35,000 |  |  | $ | 50,000 |  |  | $ | 62,500 |  |  | $ | 312,500 |  |  | $ | — |  |  | $ | 460,000 |
The Senior Notes | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 350,000 |  |  | 350,000 |
Economic development loans | 2,189 |  |  | 88 |  |  | 89 |  |  | 201 |  |  | 207 |  |  | 1,665 |  |  | 4,439 |
Capital lease obligations | 1,948 |  |  | 1,786 |  |  | 1,342 |  |  | 713 |  |  | 639 |  |  | 817 |  |  | 7,245 |
Other long-term debt | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 6,660 |  |  | 6,660 |
Total | $ | 4,137 |  |  | $ | 36,874 |  |  | $ | 51,431 |  |  | $ | 63,414 |  |  | $ | 313,346 |  |  | $ | 359,142 |  |  | $ | 828,344 |
Debt issuance costs |  |  |  |  |  |  |  |  |  |  |  |  | $ | (14,304 | )
Current maturities |  |  |  |  |  |  |  |  |  |  |  |  | $ | (4,143 | )
Total long-term debt |  |  |  |  |  |  |  |  |  |  |  |  | $ | 809,897 |
The Credit Facilities On December 29, 2017, the Company entered into the Credit Agreement, which provides for the Revolving Facility, the Initial Term Loan and the Delayed Draw Term Loan. Also on December 29, 2017, the Company borrowed the entire $250 million available under the Initial Term Loan and approximately $50 million under the Revolving Facility to fund, in part, the cash portion of the RSI Acquisition consideration and the Company’s transaction fees and expenses related to the RSI Acquisition. On February 12, 2018, the Company borrowed the entire $250 million under the Delayed Draw Term Loan in connection with the refinancing of the RSI Notes as discussed below or to repay, in part, amounts outstanding under the Revolving Facility. In connection with its entry into the Credit Agreement, the Company terminated its prior $35 million revolving credit facility with Wells Fargo. The Company is required to make specified quarterly installments on both the Initial Term Loan and the Delayed Draw Loan. As of April 30, 2018, $230 million remained outstanding on each of the Initial Term Loan and Delayed Draw Term Loan and no amount was outstanding on the Revolving Facility. The Credit Facilities mature on December 29, 2022. Amounts outstanding under the Credit Facilities bear interest based on a fluctuating rate measured by reference to either, at the Company’s option, a base rate plus an applicable margin or LIBOR plus an applicable margin, with the applicable margin being determined by reference to the Company’s then-current “Total Funded Debt to EBITDA Ratio.” The Company will also incur a quarterly commitment fee on the average daily unused portion of the Revolving Facility during the applicable quarter at a rate per annum also determined by reference to the Company’s then-current “Total Funded Debt to EBITDA Ratio.” In addition, a letter of credit fee will accrue on the face amount of any outstanding letters of credit at a per annum rate equal to the applicable margin on LIBOR loans, payable quarterly in arrears. As of April 30, 2018, the applicable margin with respect to base rate loans and LIBOR loans was 1.25% and 2.25%, respectively, and the commitment fee was 0.30%. The Credit Agreement includes negative covenants restricting the ability of the Company and its subsidiaries to incur additional indebtedness, create additional liens on its assets, make certain investments, dispose of its assets or engage in a merger or other similar transaction or engage in transactions with affiliates, subject, in each case, to the various exceptions and conditions described in the Credit Agreement. The negative covenants further restrict the Company’s ability to make certain restricted payments, including the payment of dividends, in certain limited circumstances. As of April 30, 2108, the Company was in compliance with the restrictive covenants included in the Credit Agreement. The Credit Agreement also includes financial covenants that require the Company to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of no less than 1.25 to 1.00 and a Total Secured Debt to EBITDA Ratio (as defined in the Credit Agreement) of no more than 2.50 to 1.00. The Credit Agreement further requires that the Company not exceed a specified Total Funded Debt to EBITDA Ratio (as defined in the Credit Agreement). The Total Funded Debt to EBITDA Ratio currently applicable to the Company is 3.75 to 1.00 and will decrease to 3.50 to 1.00 beginning April 30, 2019 and to 3.25 to 1.00 beginning April 30, 2020. At April 30, 2018, the Company’s Fixed Charge Coverage Ratio was 3.12, its Total Secured Debt to EBITDA Ratio was 1.87 and its Total Funded Debt to EBITDA Ratio was 3.25. As of April 30, 2018, the Company’s obligations under the Credit Agreement were guaranteed by the Company’s subsidiaries and the obligations of the Company and its subsidiaries were secured by a pledge of substantially all of their respective personal property. The Senior Notes On February 12, 2018, the Company issued $350 million in aggregate principal amount of 4.875% Senior Notes due 2026 (the “Senior Notes”). The Senior Notes will mature on March 15, 2026. Proceeds from the sale of the Senior Notes were used to refinance the RSI Notes, as discussed below, and to repay, in part, amounts outstanding under the Revolving Facility. Interest on the Senior Notes is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2018. The Senior Notes are, and will be, fully and unconditionally guaranteed by each of the Company’s current and future wholly-owned domestic subsidiaries that guarantee the Company’s obligations under the Credit Agreement. The indenture governing the Senior Notes restricts the ability of the Company and the Company’s “restricted subsidiaries” to, as applicable, (i) incur additional indebtedness or issue certain preferred shares, (ii) create liens, (iii) pay dividends, redeem or repurchase stock or make other distributions or restricted payments, (iv) make certain investments, (v) create restrictions on the ability of the “restricted subsidiaries” to pay dividends to the Company or make other intercompany transfers, (vi) transfer or sell assets, (vii) merge or consolidate with a third party and (viii) enter into certain transactions with affiliates of the Company, subject, in each case, to certain qualifications and exceptions as described in the indenture. As of April 30, 2108, the Company was in compliance with all covenants under the indenture governing the Senior Notes. At April 30, 2018, the book value of the Senior Notes was $350 million and the fair value was $339 million, based on Level 2 inputs. See Note O -- Fair Value Measurements for a discussion of Level 2 inputs. The RSI Notes On December 29, 2017, as a result of the closing of the RSI Acquisition, the Company assumed, through its acquisition of all of the equity interests of RSI, the RSI Notes. As of December 29, 2017, the RSI Notes had a fair value of $602.3 million. The Company utilized the proceeds from the issuance of the Senior Notes and borrowings under the Delayed Draw Term Loan, together with cash on hand, to (A) fund (i) the redemption of $115 million in aggregate principal amount of the RSI Notes on February 26, 2018, (ii) the purchase of approximately $449.1 million in aggregate principal amount of the RSI Notes on February 12, 2018 pursuant to a tender offer that commenced on January 29, 2018 and (iii) the redemption of approximately $10.9 million in aggregate principal amount of the RSI Notes on February 28, 2018 pursuant to a make-whole call, and (B) repaid $30 million of the amount borrowed under the Revolving Facility in connection with the closing of the RSI Acquisition. As a result of these redemptions and the tender offer, none of the RSI Notes remain outstanding. Other RSI Debt On December 29, 2017, the Company also assumed, through its acquisition of all of the equity interests of RSI, $2.8 million of subordinated promissory notes payable to certain current and former RSI employees. The promissory notes each have a term of 5 years, bear interest at rates ranging from 1.01% to 2.12% per annum, may be prepaid by RSI at any time without penalty and are due in annual installments of principal and interest on their respective anniversary dates. The notes were issued in exchange for the cancellation of vested stock options of RSI either upon the termination of the applicable employee or immediately prior to the expiration of such options. During the fourth fiscal quarter of fiscal 2018 these notes were repaid in full. Economic Development Loans In 2005, the Company entered into two separate loan agreements with the Maryland Economic Development Corporation and the County Commissioners of Allegany County as part of the Company’s capital investment and operations at the Allegany County, Maryland site. These loan agreements were amended in 2013 and 2008. The aggregate balance of these loan agreements was $2.2 million as of April 30, 2018 and 2017. The loan agreements expire at December 31, 2018 and bear interest at a fixed rate of 3% per annum. These loan agreements are secured by mortgages on the manufacturing facility constructed in Allegany County, Maryland. These loan agreements defer principal and interest during the term of the obligation and forgive any outstanding balance at December 31, 2018, if the Company complies with certain employment levels at the facility. In 2015, the Company entered into a $1.5 million loan agreement with the West Virginia Economic Development Authority as part of the Company's capital investment and operations at the South Branch plant located in Hardy County, West Virginia. The loan agreement expires on February 1, 2025 and bears interest at a fixed rate of 3% per annum. The loan agreement is secured by certain equipment. It defers principal and interest during the term of the obligation and forgives any outstanding balance at December 31, 2018, if the Company complies with certain employment levels at the facility. In 2016, the Company entered into a $0.8 million loan agreement with the West Virginia Economic Development authority as part of the Company's capital investment and operations at the South Branch plant located in Hardy County, West Virginia. The loan agreement expires on June 1, 2026 and bears interest at a fixed rate of 3% per annum. The loan agreement is secured by certain equipment. It defers principal and interest during the term of the obligation and forgives any outstanding balance at December 31, 2018, if the Company complies with certain employment levels at the facility. Capital Lease Obligations From 2014 through 2018, the Company entered into a total of 12 capitalized lease agreements in the aggregate amount of $2.0 million with First American Financial Bancorp related to financing computer equipment. Each lease has a term of 48 months and an interest rate between 3.5% and 6.5%. The leases require quarterly rental payments. The aggregate outstanding amount under all of these leases as of April 30, 2018 and 2017 was $0.9 million and $1.4 million, respectively. From 2014 through 2018, the Company entered into a total of 19 capitalized lease agreements in the aggregate amount of $3.2 million with e-Plus Group related to financing computer equipment. There are 15 leases with a term of 51 months and 4 leases with a term of 36 months. All leases have an interest rate between 3.5% and 6.5%. The leases require monthly rental payments. The aggregate outstanding amount under all of these leases as of April 30, 2018 and 2017 was $2.2 million and $1.0 million, respectively. In 2004, the Company entered into a lease agreement with the West Virginia Economic Development Authority as part of the Company’s capital investment and operations at the South Branch plant located in Hardy County, West Virginia. This capital lease agreement is a $10 million term obligation, which expires June 30, 2024, bearing interest at a fixed rate of 2% per annum. The lease requires monthly rental payments. The outstanding amounts owed as of April 30, 2018 and 2017 were $3.8 million and $4.4 million, respectively. Other Long-term Debt On January 25, 2016 the Company entered into a New Markets Tax Credit ("NMTC") financing agreement, pursuant to section 45D of the Internal Revenue Code of 1986, as amended, and Kentucky Revised Statutes Sections 141.432 through 141.434, to take advantage of a tax credit related to working capital and capital improvements at its Monticello, Kentucky facility. This financing agreement was structured with unrelated third party financial institutions (the "Investors"), their wholly-owned investment funds ("Investment Funds") and their wholly-owned community development entities ("CDEs") in connection with our participation in qualified transactions under the NMTC program. In exchange for substantially all of the benefits derived from the tax credits, the Investors made a contribution of $2.3 million, net of syndication fees, to the project. Upon closing the transaction, a wholly owned subsidiary of the Company provided a $4.3 million loan receivable to the Investment Funds, which is included in other long term assets in the accompanying consolidated balance sheets. The Company also entered into loan agreements aggregating $6.6 million payable to the CDEs sponsoring the project. The loans have a term of 30 years with an aggregate interest rate of approximately 1.2%. As of April 30, 2018 and 2017, the Company had drawn $6.7 million and $5.9 million, respectively, of the loan proceeds, which is included in long-term debt in the accompanying consolidated balance sheets. The NMTC is subject to recapture for a period of seven years, the compliance period. During the compliance period, the Company is required to comply with various regulations and contractual provisions that apply to the NMTC arrangement. We do not anticipate any credit recaptures will be required in connection with this arrangement. This transaction also includes a put/call feature which becomes enforceable at the end of the compliance period whereby we may be obligated or entitled to repurchase the Investors’ interest in the Investment Funds. The value attributable to the put/call is nominal. Direct costs of $0.3 million incurred in structuring the financing arrangement are deferred and will be recognized as expense over the term of the loans (30 years). Certain of the Company's loan agreements limit the amount and type of indebtedness the Company can incur and require the Company to maintain specified financial ratios measured on a quarterly basis. In addition to the assets previously discussed, certain of the Company’s property, plant and equipment are pledged as collateral under certain loan agreements and the capital lease arrangements. The Company was in compliance with all covenants contained in its loan agreements and capital leases at April 30, 2018. Principle Payments Subsequent to Year End Since year-end, $40 million has been paid toward the principle of the Credit Facilities.

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- Definition The entire disclosure for debt and capital lease obligations can be reported. 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. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: 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
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