Long-Term Debt and Commitments |
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| Long-Term Debt and Commitments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt and Commitments |
Note 9. Long-Term Debt and Commitments
The following is a summary of long-term debt:
On November 26, 2024, the Company entered into a Refinancing Facility Agreement and Incremental Facility Amendment (the “Amendment”) to amend the Company’s previous credit agreement (the “Previous Credit Agreement; the previous credit agreement, as amended by the Amendment, being the “Amended Credit Agreement”).
The Amendment provides for, among other things, a new senior secured revolving credit facility with aggregate commitments of $400 million (the “Revolving Facility”), a portion of which may be used for the issuance of letters of credit and swingline loans, and a new senior secured term loan facility with aggregate commitments of $575 million (the “Term Loan Facility” and, together with the Revolving Facility, the “Senior Secured Credit Facilities”). The Revolving Facility and the Term Loan Facility replace the facilities under the Previous Credit Agreement, which provided for, among other things, a $550 million senior secured term loan facility and a $300 million senior secured revolving credit facility. The maturity date for loans and commitments under the Revolving Facility is November 26, 2029, and the maturity date for loans under the Term Loan Facility is November 26, 2031; provided that the maturity dates of the Revolving Facility and the Term Loan Facility will be adjusted to the date that is 91 days prior to the stated maturity date of the Company’s 5.0% Senior Notes due 2028 (the “Notes”) unless, prior to the date that is 91 days prior to the stated maturity date of the Notes, all amounts in excess of $50 million of the Notes have been either (a) refinanced with indebtedness permitted under the Amended Credit Agreement maturing later than 90 days after the scheduled maturity date of the Revolving Facility or of the Term Loan Facility, as applicable, or (b) repaid, discharged or repaid (other than with the proceeds of any indebtedness maturing earlier than 91 days after the scheduled maturity date of the Revolving Facility or of the Term Loan Facility, as applicable). Loans under the Term Loan Facility amortize at a rate equal to 1.00% per annum, payable in equal quarterly installments, and were issued with original issue discount at 99.875% of par. Loans under the Revolving Facility will bear interest at a rate equal to (a) for loans denominated in U.S. dollars, at the election of the Company, Term SOFR plus an applicable margin equal to 1.375% per annum or a base rate plus an applicable margin equal to 0.375% per annum, (b) for loans denominated in Euros, adjusted EURIBOR plus an applicable margin equal to 1.375% per annum and (c) for loans denominated in Pounds Sterling, SONIA plus an applicable margin equal to 1.375% per annum, subject in each case to (i) an increase of 37.5 basis points in the event that, and for so long as, the Net Leverage Ratio (as defined in the Amended Credit Agreement) is greater than or equal to 3.00 to 1.00 as of the last day of the preceding fiscal quarter, (ii) an increase of 12.5 basis points in the event that, and for so long as, the Net Leverage Ratio is less than 3.00 to 1.00 and greater than or equal to 2.00 to 1.00 as of the last day of the preceding fiscal quarter, and (iii) a decrease of 12.5 basis points in the event that, and for so long as, the Net Leverage Ratio is less than 1.00 to 1.00 as of the last day of the preceding fiscal quarter. Loans under the Term Loan Facility will bear interest at a rate equal to, at the election of the Company, Term SOFR plus an applicable margin equal to 2.00% per annum or a base rate plus an applicable margin equal to 1.00% per annum. The Company will pay certain fees under the Amended Credit Agreement, including (a) a commitment fee of 0.175% per annum on the undrawn portion of the Revolving Facility (subject to a step-ups to 0.300% and 0.250% and a step-down to 0.150% at the same levels described above), (b) a fronting fee of 0.125% per annum on the average daily undrawn amount of, plus unreimbursed amounts in respect of disbursements under, letters of credit issued under the Revolving Facility, and (c) customary annual administration fees. The obligations of the Company under the Senior Secured Credit Facilities are unconditionally guaranteed jointly and severally by, subject to certain exceptions, all material domestic subsidiaries of the Company (the “Guarantors”) and secured, subject to certain exceptions, by a security interest in substantially all of the tangible and intangible assets of the Company and the Guarantors. On October 13, 2026, the Company entered into a
Refinancing Facility Agreement and Incremental Facility Amendment (the “2026
Amendment”) to amend the Amended Credit Agreement (the Amended Credit
Agreement, as amended by the 2026 Amendment, the “2026 Amended Credit
Agreement”). The 2026 Amendment provides for, among other things, a new senior
secured revolving credit facility with aggregate commitments of $500,000,000
(the “2026 Refinancing Revolving Facility”), a portion of which may be used for
the issuance of letters of credit and swingline loans. The 2026 Refinancing
Revolving Facility replaces the Revolving Facility. The maturity date for loans
and commitments under the 2026 Refinancing Revolving Facility is October 13,
2031; provided that the maturity date of the 2026 Refinancing Revolving
Facility will be adjusted to the date that is 91 days prior to the stated
maturity date of the Term Loan Facility unless, prior to the date that is 91
days prior to the stated maturity date of the Term Loan Facility, all amounts
in excess of $50,000,000 of the Term Loan Facility have been either (a)
refinanced with indebtedness permitted under the 2026 Amended Credit Agreement
maturing later than 90 days after the scheduled maturity date of the Term Loan
Facility or (b) discharged or repaid (other than with the proceeds of any
indebtedness maturing earlier than 91 days after the scheduled maturity date of
the 2026 Refinancing Revolving Facility). The 2026 Amendment does not change
any terms of the Term Loan Facility and, except as set forth above, the terms
of the 2026 Refinancing Revolving Facility (including interest rates and fees)
remain the same as the Revolving Facility. As of October 4, 2026, there were no loans and $11.2 million in letters of credit outstanding under the Revolving Facility. On June 30, 2020, the Company issued $400 million aggregate principal amount of "5% Senior Notes" due 2028 (the "2028 Notes"). The 2028 Notes were issued pursuant to an indenture, dated as of June 30, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2020 Indenture”). The 2028 Notes bore an interest rate of 5.0% per annum payable semi-annually on January 1 and July 1 of each year, beginning on January 1, 2021. The 2028 Notes were unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future wholly owned domestic restricted subsidiaries that is a borrower under or that guarantees the Company’s obligations under its Senior Secured Credit Facilities or that guarantees the Company’s or any of the Company’s wholly owned domestic subsidiaries’ long-term indebtedness in an aggregate amount in excess of $50 million. On October 13, 2026, the Company completed an offering of $400,000,000 aggregate principal amount of its 7.500% Senior Notes due 2032 (the “2032 Notes”). The Company used the net proceeds of its offering of the 2032 Notes, together with cash on hand, (i) to redeem all of the outstanding 2028 Notes and (ii) to pay transaction fees and expenses related to the offering of the 2032 Notes and the 2026 Amendment . The terms of the 2032 Notes are governed by an indenture dated as of October 13, 2026 (the “2026 Indenture”), among the Company, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee (the “2026 Trustee”). The 2032 Notes bear interest at a rate of 7.500% per annum payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2027. The 2032 Notes are guaranteed by the Company’s wholly owned domestic restricted subsidiaries that are obligors or guarantors under its senior secured credit facilities or certain other indebtedness. At any time and from time to time prior to
January 15, 2029, the Company may redeem some or all of the 2032 Notes for cash
at a redemption price equal to 100% of their principal amount, plus the
“make-whole” premium described in the 2026 Indenture and accrued and unpaid
interest, if any, to, but excluding, the applicable redemption date. Beginning
on January 15, 2029, the Company may redeem some or all of the 2032 Notes at any time
and from time to time at the applicable redemption prices listed in the
Indenture, plus accrued and unpaid interest, if any, to, but excluding, the
applicable redemption date. In
addition, at any time and from time to time prior to January 15, 2029, the
Company may redeem up to 40% of the aggregate principal amount of the 2032 Notes
with funds from one or more equity offerings at a redemption price equal to
107.500% of the principal amount thereof, plus accrued and unpaid interest, if
any, to, but excluding, the applicable redemption date. If the Company experiences a change of control (as defined in the indenture), the Company is required to offer to repurchase the 2032 Notes at 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.
The Amended Credit Agreement, and the 2020 Indenture, as well as the 2026 Amended Credit Agreement and the 2026 Indenture, contain certain customary affirmative and negative covenants that limit or restrict the ability of the Company and its restricted subsidiaries to enter into certain transactions or take certain actions, as well as customary events of default. In addition, the Amended Credit Agreement and the 2026 Amended Credit Agreement contain a financial covenant that requires the Company to maintain a maximum Net Leverage Ratio of 4.00 to 1.00 for each four fiscal quarter period (subject to an increase to 5.00 to 1.00 for four quarters in connection with certain significant acquisitions). The Company was in compliance with all the covenants contained in the Amended Credit Agreement throughout the period covered by this report.
The Company had a committed loan facility in Japan. In the second quarter of 2026, the Company repaid the remaining balance of $0.4 million.
As part of the acquisition of Concept Pet Heimtierprodukte GmbH (“Concept Pet”) in 2022, the Company assumed $1.9 million in long-term debt, recorded at fair value, consisting of two term loans, one that matured in 2025 and one that matures in 2027. The outstanding loan has annual payments and carries a variable interest rate. The Company repaid $0.1 million on this loan during the first nine months of 2026.
As of October 4, 2026, the Company had $13.9 million in uncommitted short-term bank credit lines, of which none were in use.
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