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Note 8 - Debt
 12 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Debt Disclosure [Text Block]

8. Debt

 

Long-term debt is comprised of the following at June 30 (in thousands):

 

  

2026

  

2025

 

Bank credit agreements

 $518,204  $553,203 

Total funded debt

  518,204   553,203 

Issuance cost

  (254)  (688)

Total long-term debt

 $517,950  $552,515 

 

The Company's long-term debt matures in February 2028. 

 

Through the second quarter of fiscal year 2025 the facility had a borrowing limit of $500 million, which can be increased by an amount of up to $250 million, in accordance with specified conditions contained in the agreement. The facility also includes a $10 million sublimit for swing line loans and a $35 million sublimit for letters of credit. During the second quarter of fiscal year 2025, the Company entered into a $250 million 364-day term loan with existing lenders. Also during the period, the Company converted the 364-day term loan into an exercise of the accordion feature under its existing facilities. In connection with the conversion of the loan, the Company entered into a Second Amendment to Third Amended and Restated Credit Agreement. This amendment expanded the total available credit under the Revolving Credit Agreement from $500 million to $825 million. Under the terms of the Credit Agreement, the Company pays interest on borrowed amounts based on a variable rate of interest and a credit spread based on quarterly reported leverage and a commitment fee on unused amounts under the facility. The amount of the commitment fee depends upon both the undrawn amount remaining available under the facility and the Company’s funded debt to EBITDA (as defined in the agreement) ratio at the last day of each quarter. As our funded debt to EBITDA ratio increases, the commitment fee increases. 

 

Funds borrowed under the facility may be used for the repayment of debt, working capital, capital expenditures, acquisitions (so long as certain conditions, including a specified funded debt to EBITDA leverage ratio is maintained), and other general corporate purposes. As of June 30, 2026 and 2025, the Company had standby letters of credit outstanding of $3.1 million and $1.9 million, primarily for insurance purposes and had the ability to borrow $148.4 million and $207.7 million under the facility based on our current EBITDA. The facility contains customary representations, warranties and restrictive covenants, as well as specific financial covenants which the Company was compliant with as of June 30, 2026 and 2025 The Company’s current financial covenants under the facility are as follows:

 

Interest Coverage Ratio - The Company is required to maintain a ratio of Earnings Before Interest and Taxes, as Adjusted (“Adjusted EBIT per the Credit Facility”), to interest expense for the trailing twelve months of at least 2.75:1. Adjusted EBIT per the Credit Facility specifically excludes extraordinary and certain other defined items such as cash restructuring and deal related charges up to the lower of $20.0 million or 10% of EBITDA. The facility allows for unlimited non-cash charges including purchase accounting and goodwill adjustments. At June 30, 2026 and 2025, the Company’s Interest Coverage Ratio was 4.97:1 and 6.42:1, respectively.

 

Leverage Ratio- The Company’s ratio of funded debt to trailing twelve month Adjusted EBITDA per the Credit Facility, calculated as Adjusted EBIT per the Credit Facility plus depreciation and amortization, may not exceed 3.5:1. Under certain circumstances in connection with a Material Acquisition (as defined in the Facility), the Facility allows for the leverage ratio to go as high as 4.0:1 for a four-fiscal quarter period. At June 30, 2026 and 2025 the Company’s Leverage Ratio was 2.41:1 and 2.60:1. Our primary sources of cash for these requirements are cash flows from continuing operations and borrowings under the facility. 

 

At June 30, 2026 and 2025, the effective rate of interest on the outstanding borrowings was 5.71% and 6.38%