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Note 7 - Debt
 12 Months Ended
Dec. 29, 2013
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

7. Debt


Short-Term Debt


On December 11, 2013, we entered into an agreement with our lenders to amend and restate our existing revolving credit facility dated March 30, 2011 (the “Facility”). The amendment made, among others, the following changes:


 

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Increased the lenders’ commitments from $150.0 million to $200.0 million;


 

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Revised the termination date of the facility from March 31, 2016 to December 11, 2018; and


  

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Reduced the applicable margins based on the Company’s leverage ratio, as defined in the agreement and calculated at the end of each fiscal quarter.


The Facility allows for borrowings in various currencies and is used to fund working capital, acquisitions, and general corporate needs. At year-end 2013 and 2012, there were no borrowings under the Facility and the remaining borrowing capacity was $200.0 million and $150.0 million, respectively. At year-end 2013, the Facility had a commitment fee of 25 basis points. This varies based on the Company’s leverage ratio as defined in the agreement. The Facility’s financial covenants and restrictions are described below, all of which were met at year-end 2013:


 

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We must maintain a certain minimum ratio of earnings before interest, taxes, depreciation, amortization and certain cash and non-cash charges that are non-recurring in nature (“EBITDA”) to interest expense (“Interest Coverage Ratio”) as of the end of any fiscal quarter.


 

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We must maintain a certain maximum ratio of total indebtedness to the sum of net worth and total indebtedness at all times.


 

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Dividends, stock buybacks and similar transactions are limited to certain maximum amounts.


 

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We must adhere to other operating restrictions relating to the conduct of business, such as certain limitations on asset sales and the type and scope of investments.


On December 11, 2013, the Company and Kelly Receivables Funding, LLC, a wholly owned bankruptcy remote special purpose subsidiary of the Company (the “Receivables Entity”) amended the Receivables Purchase Agreement dated December 4, 2009 related to the existing $150 million securitization facility (“Securitization Facility”). The amendment made, among others, the following changes:


 

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Revised the termination date of the facility from March 31, 2014 to December 9, 2016;


 

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Introduced a delayed funding option that allows the bank to delay honoring a funding request for up to 35 days in the event there is market dislocation; and


 

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Reduced the facility fees, letter of credit fees, and program fees.


Under the Securitization Facility, the Company will sell certain trade receivables and related rights (“Receivables”), on a revolving basis, to the Receivables Entity. The Receivables Entity may from time to time sell an undivided variable percentage ownership interest in the Receivables. The Securitization Facility also allows for the issuance of standby letters of credit (“SBLC”). The Securitization Facility contains a cross-default clause that could result in termination if defaults occur under our other loan agreements. The Securitization Facility also contains certain restrictions based on the performance of the Receivables.


As of year-end 2013, the Securitization Facility carried $28.0 million of short-term borrowings at a rate of 0.97%, $55.0 million of SBLCs related to workers’ compensation and a remaining capacity of $67.0 million. The interest rate detailed above includes a facility fee of 40 basis points. As of year-end 2012, the Securitization Facility carried $63.0 million of short-term borrowings at a rate of 1.40%, SBLCs of $55.0 million related to workers’ compensation and remaining capacity of $32.0 million.


The Receivables Entity’s sole business consists of the purchase or acceptance through capital contributions of trade accounts receivable and related rights from the Company. As described above, the Receivables Entity may retransfer these receivables or grant a security interest in those receivables under the terms and conditions of the Receivables Purchase Agreement. The Receivables Entity is a separate legal entity with its own creditors who would be entitled, if it were ever liquidated, to be satisfied out of its assets prior to any assets or value in the Receivables Entity becoming available to its equity holders. The assets of the Receivables Entity are not available to pay creditors of the Company or any of its other subsidiaries. The assets and liabilities of the Receivables Entity are included in the consolidated financial statements of the Company.


The Company had total unsecured, uncommitted short-term local credit facilities of $15.3 million as of year-end 2013. Borrowings under these lines totaled $0.3 million and $1.1 million at year-end 2013 and 2012, respectively. The interest rate for these borrowings was 10.75% at year-end 2013 and 9.56% at year-end 2012.