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Long-Term Debt | 6 Months Ended
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Dec. 28, 2024
Debt Disclosure [Abstract] |
Long-Term Debt | Long-Term Debt
| Maturity Date | Interest Rate | December 28, 2024 |  | June 29, 2024
|  |  | (in thousands)
Asset-based senior secured revolving credit facility (1) | December 3, 2029 | 7.4% | $ | 75,566 |  |  | $ | 107,149 |
Domestic term loan - Callodine (2) | December 3, 2029 | 11.6% | 28,000 |  |  | — |
Foreign line of credit (3) | December 11, 2026 | 13.3% | 4,143 |  |  | 5,403 |
Domestic term loans - Balboa (4) | September 19, 2030 | 6% to 8% | 4,127 |  |  | 4,535 |
Foreign term loan - Banorte (5) | April 24, 2026 | 5.5% | 1,600 |  |  | 2,200 |
Domestic term loan - Bank of America (6) | August 14, 2025 | 4.9% | — |  |  | 1,277 |
Total debt |  |  | 113,436 |  |  | 120,564 |
Less: current portion of debt |  |  | (5,063) |  |  | (3,123) |
Less: unamortized financing costs |  |  | (2,353) |  |  | (1,059) |
Long-term debt, net |  |  | $ | 106,020 |  |  | $ | 116,382 |
(1) On December 3, 2024, Key Tronic Corporation (the "Company") entered into an asset-based credit agreement (the "Credit Agreement") among the Company, certain domestic subsidiaries (as co-borrowers or guarantors), BMO Bank, N.A (the "Bank"), as administrative agent and swing line lender, BMO Capital Markets as arranger and book runner, and certain financial institutions, as lenders. The Credit Agreement provides for an asset-based senior secured revolving credit facility (the "Credit Facility") of up to $115 million, maturing on December 3, 2029. Generally, under the Credit Agreement and at the Company’s option: (i) each SOFR Loan shall bear interest at a rate per annum equal to Adjusted Term SOFR (Term SOFR plus 0.10%, subject to a floor of 0.00%) plus an applicable margin of 2.50% to 3.00%, depending on the availability of borrowing amounts under the Credit Agreement; and (ii) each Base Rate Loan, Swing Line Loan or other Obligation shall bear interest at a rate per annum equal to the Base Rate (subject to a floor of 1.00%) plus an applicable margin of 1.50% to 2.00%, depending on the availability of borrowing amounts under the Credit Agreement. As of December 28, 2024, the applicable margin was 2.75% for SOFR Loans and 1.75% for Base Rate Loans. If there is an event of default under the Credit Agreement, all loans and other obligations may bear interest at a rate of an additional 2.00% on the otherwise applicable interest rates. In addition to the applicable interest rates, the Company is required to pay a fee of 0.2% per annum on the unused portion of the Credit Facility, monthly in arrears. Availability on the line of credit is generally determined based on eligible inventory and accounts receivable balances. Proceeds from the Credit Facility and the Term Loan discussed below were used to pay-off the Company's prior loan and security agreement, as amended, with Bank of America, N.A. (with the related credit facility, the "Prior Credit Facility") in the amount of $99.7 million, as well as its outstanding equipment term loan, and financing costs related to the Credit Agreement. The Term Loan, may also be used to pay-off certain other existing debt, to issue letters of credit, and for other business purposes, including working capital needs. As of December 28, 2024, the Company had an outstanding balance under the asset-based revolving credit facility of $75.6 million, no outstanding letters of credit and $18.1 million available for future borrowings. On August 14, 2020, the Company entered into a loan agreement with Bank of America (“Loan Agreement”). The Loan Agreement, as amended, provided for an asset-based senior secured revolving credit facility with an availability of up to $120 million, subject to the Company’s borrowing base, and was set to mature on December 3, 2026. The interest rate as of December 2, 2024 at the time of pay-off was approximately 9.2%. As of June 29, 2024, the Company had an outstanding balance under the Prior Credit Facility of $107.1 million, $0.3 million in outstanding letters of credit and $12.9 million available for future borrowings. (2) On December 3, 2024, the Company entered into a $28 million term loan (the "Term Loan") credit agreement among the Company, certain domestic subsidiaries (as co-borrowers or guarantors), Callodine Commercial Finance, LLC (“Callodine”), as administrative agent, and certain financial institutions, as term loan lenders. The Term Loan requires quarterly repayments of principal in the amount of $0.75 million. The remainder will be payable at maturity which is the earlier of December 3, 2029 or the maturity of the Credit Agreement described above. The Term Loan bears interest at Adjusted Term SOFR (Term SOFR plus 0.15%, subject to a floor of 3.50%) plus an applicable margin of 7.00%. If there is an event of default under the Term Loan, all loans and other obligations may bear interest at a rate of an additional 2.00% on the otherwise applicable interest rate. The Company had an outstanding balance of $28.0 million as of December 28, 2024. (3) On December 11, 2023, the Company entered into a loan agreement in Mexican peso with Banorte Financial Group. The agreement provides for a three-year secured line of credit up to MXN100 million, subject to the Company’s borrowing base, maturing on December 11, 2026. The credit facility bears interest at Iterbancario de Equilibrio Interest Rate plus 2.75%, and as of December 28, 2024, was 13.3%. As of December 28, 2024, the Company had an outstanding balance under the revolving credit facility of MXN84 million ($4.14 million USD) and MXN16 million ($0.8 million USD) available for future borrowings. (4) On September 19, 2023, the Company entered into a $1.1 million equipment financing agreement with Ameris Bank dba Balboa Capital ("Balboa Capital"). Combining with other equipment financing agreements entered in the third quarter of fiscal year 2023, a total of $5.5 million relates to the Company’s existing manufacturing equipment that bears an interest rate range of 6% - 8% and matures in the first quarter of fiscal 2030. Under these loan agreements, equal monthly payments of $94,000 commenced in the fourth quarter of fiscal year 2024 and will continue through the maturity of the equipment financing facility in the first quarter of fiscal 2030. The Company had an outstanding balance $4.1 million as of December 28, 2024. (5) On November 24, 2020, the Company entered into a $6.0 million equipment financing facility related to the Company’s existing manufacturing equipment that bears interest at 5.52% and matures on April 24, 2026. Under this loan agreement, equal monthly payments of $100,000 commenced on May 24, 2021 and will continue through the maturity of the equipment financing facility on April 24, 2026. As of December 28, 2024, the Company had an outstanding balance of $1.6 million. As of June 29, 2024, the Company had an outstanding balance of $2.2 million. (6) On August 14, 2020, the Company entered into a $5.0 million equipment financing facility with Bank of America relating to the Company’s existing U.S. manufacturing equipment that accrued interest at 4.85% and was set to mature on August 14, 2025. Under this loan agreement, equal monthly payments of approximately $94,000 commenced on September 14, 2020 and continued through the pay-off of the Prior Credit Facility on December 4, 2024. As of June 29, 2024, the Company had an outstanding balance of $1.3 million. Debt maturities as of December 28, 2024 for the next five years are as follows (in thousands):
Fiscal Years Ending | Amount
2025 (1) | $ | 2,524 |
2026 | 4,894 |
2027 | 8,104 |
2028 | 4,032 |
2029 - Thereafter | 93,882 |
Total debt | $ | 113,436 |
Unamortized debt issuance costs | (2,353) |
Long-term debt, net of debt issuance costs | $ | 111,083 |
(1) Represents scheduled payments for the remaining six-month period ending June 28, 2025. The Company must comply with certain financial covenants, including earnings before interest, taxes, depreciation, amortization and other adjustments, availability and, if triggered, a fixed charge coverage ratio. The credit agreement requires the Company to grant certain inspection rights to Bank of Montreal, limit or restrict the Company’s cash management; limit or restrict the ability of the Company to incur additional liens, make acquisitions or investments, incur additional indebtedness, engage in mergers, consolidations, liquidations, dissolutions, or dispositions, pay dividends or other restricted payments, prepay certain indebtedness, engage in transactions with affiliates, and use proceeds. As of December 28, 2024, the Company was in compliance with all financial covenants.

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