v3.22.4
Indebtedness
 9 Months Ended
Dec. 31, 2022
Indebtedness [Abstract]  
Indebtedness
Note 16: Indebtedness

In October 2022, the Company executed an amended and restated credit agreement with a syndicate of banks that provides for a multi-currency $275.0 million revolving credit facility and U.S. dollar- and euro-denominated term loan facilities maturing in October 2027.  In addition, the credit agreement provides for shorter-duration swingline loans.  This credit agreement modified the Company’s then existing $250.0 million revolver and term loan facilities, which would have matured in June 2024.

In connection with the credit agreement modification, the Company incurred $2.2 million of debt issuance costs.  Of these costs, the Company deferred $1.5 million, which will be amortized as interest expense over the term of the debt, and recorded $0.7 million as interest expense on the consolidated statement of operations during the third quarter of fiscal 2023.  The Company paid $0.6 million of the debt issuance costs during the third quarter of fiscal 2023 and the remaining issuance costs were added to the new term loan principal at the time of the modification.

Long-term debt consisted of the following:
Fiscal year of
maturity
  
December 31, 2022
    
March 31, 2022
  
Term loans
2028
  
$
217.8
    
$
163.7
  
Revolving credit facility
2028
    
27.5
      
64.9
  
5.9% Senior Notes
2029
    
100.0
      
100.0
  
5.8% Senior Notes
2027
    
33.3
      
41.7
  
Other (a)
      
2.8
      
3.2
  
       
381.4
      
373.5
  
Less: current portion
      
(19.6
)
    
(21.7
)
Less: unamortized debt issuance costs
      
(2.9
)
    
(3.4
)
Total long-term debt
    
$
358.9
    
$
348.4
  

(a)
Other long-term debt primarily includes finance lease obligations.

Long-term debt, including the current portion of long-term debt, matures as follows:

Fiscal Year
      
Remainder of 2023
  
$
2.8
  
2024
    
19.6
  
2025
    
19.7
  
2026
    
44.7
  
2027
    
44.7
  
2028 & beyond
    
249.9
  
Total
  
$
381.4
  

Borrowings under the revolving credit, swingline and term loan facilities bear interest at a variable rate based upon the applicable reference rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below.  At December 31, 2022, the weighted-average interest rates for revolving credit facility borrowings and the term loans were 4.1 and 5.6 percent, respectively.  Based upon the terms of the credit agreement, the Company classifies borrowings under its revolving credit and swingline facilities as long-term and short-term debt, respectively, on its consolidated balance sheets.

At December 31, 2022, the Company’s borrowings under its revolving credit and swingline facilities totaled $27.5 million and $6.0 million, respectively, and domestic letters of credit totaled $5.3 million.  As a result, available borrowing capacity under the Company’s revolving credit facility was $236.2 million as of December 31, 2022. At March 31, 2022, the Company’s borrowings under its revolving credit and swingline facilities totaled $64.9 million and $7.0 million, respectively.



The Company also maintains credit agreements for its foreign subsidiaries.  The outstanding short-term borrowings related to these foreign credit agreements totaled $5.3 million and $0.7 million at December 31, 2022 and March 31, 2022, respectively.
Provisions in the Company’s credit agreement, Senior Note agreements, and various foreign credit agreements require the Company to maintain compliance with various covenants and include certain cross-default clauses.  Under its primary debt agreements in the U.S., the Company has provided liens on substantially all domestic assets.  Also, as specified in the credit agreement, the term loans may require prepayments in the event of certain asset sales.  In addition, at the time of each incremental borrowing under the revolving credit facility, the Company is required to represent to the lenders that there has been no material adverse effect, as defined in the credit agreement, on its business, property, or results of operations.
The leverage ratio covenant requires the Company to limit its consolidated indebtedness, less a portion of its cash balances, both as defined by the credit agreements, to no more than three and one-quarter times consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”).  The Company is also subject to an interest expense coverage ratio covenant, which requires the Company to maintain Adjusted EBITDA of at least three times consolidated interest expense.  The Company was in compliance with its debt covenants as of December 31, 2022.
The Company estimates the fair value of long-term debt using discounted future cash flows at rates offered to the Company for similar debt instruments of comparable maturities. As of December 31, 2022 and March 31, 2022, the carrying value of the Company’s long-term debt approximated fair value, with the exception of the Senior Notes, which had an aggregate fair value of $123.7 million and $138.9 million, respectively.  The fair value of the Company’s long-term debt is categorized as Level 2 within the fair value hierarchy.  Refer to Note 3 for the definition of a Level 2 fair value measurement.