XML 47 R25.htm IDEA: XBRL DOCUMENT v3.24.0.1
Debt
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Debt Debt
The components of debt consisted of the following: 
 As of December 31,
(in millions)20232022
Equipment financing due May 2024$2.7 $9.5 
Equipment financing due November 202515.2 22.5 
5.15% Mortgage due November 2025
63.3 65.5 
0.375% Convertible Senior Notes due September 2026
800.0 800.0 
Equipment financing12.7 — 
Term loan due May 2028487.5 492.5 
Revolving Credit Facility expires June 2028— — 
Equipment financing due July 202829.0 34.4 
Finance lease obligation(1)
22.9 — 
Unamortized debt discount(6.4)(7.6)
Debt issuance costs(11.1)(15.0)
Total debt, net1,415.8 1,401.8 
Less: current portion49.4 27.5 
Total long term-debt, net$1,366.4 $1,374.3 
(1) Refer to Note 15 for information regarding finance lease obligation.
Equipment Financings
In October 2020, the Company entered into a Master Equipment Lease Agreement for a loan of $60.0 million secured by two manufacturing lines located at the Company’s Acton, Massachusetts manufacturing facility. The loan for the first manufacturing line is payable over 42 months and has an effective interest rate of 5.8%. The loan for the second manufacturing line is payable over 60 months and has an effective interest rate of 4.8%.
In July 2021, the Company entered into a $43.1 million equipment financing transaction secured by one of the manufacturing lines located at the Company’s Acton, Massachusetts manufacturing facility. The equipment financing is payable over 84 months and has an effective interest rate of 4.3%.
In May 2023, the Company entered into an arrangement under which the Company may obtain up to $24.0 million of financing for manufacturing equipment. The Company is involved in the construction of the manufacturing equipment; accordingly, it is included in property, plant and equipment on the consolidated balance sheet at December 31, 2023. The Company’s obligation reflects payments made to date by the third-party bank to the equipment manufacturer, net of discount and less repayment of principal. The financing obligation will mature 36 months following completion of construction and has an effective interest rate of 9.4%.
5.15% Mortgage
In October 2020, the Company entered into a Mortgage Loan Agreement (the “Mortgage”), which provides for a $70.0 million loan with an effective interest rate of 5.7%. Proceeds under the Mortgage are secured by the Company’s Acton, Massachusetts headquarters. The Mortgage is repayable in monthly installments of $0.5 million, with the outstanding principal balance of the loan due in November 2025. The Mortgage contains non-financial customary covenants, none of which are considered restrictive to the Company’s operations.
0.375% Convertible Senior Notes
The Company has $800.0 million aggregate principal amount of 0.375% Convertible Senior Notes due September 2026 (the “0.375% Notes”) outstanding. The notes are convertible into cash, shares of the Company’s common stock, or the combination of cash and shares of common stock, at the Company's election, at an initial conversion rate of 4.4105 shares of common stock per $1,000 principal amount of the notes, which is equivalent to a conversion price of $226.73 per share, subject to adjustment under certain circumstances. The notes will be convertible at the holder's election, from June 1, 2026 through August 28, 2026 and prior to then under certain circumstances as set forth in the agreement. Additionally, on or after September 6, 2023, the Company may redeem for cash all or a portion of the Notes, if its stock price has been equal to or greater than $294.75 for at least 20 of the prior 30 consecutive trading days including the date which the Company provides notice of redemption.
Additional interest of 0.5% per annum is payable if the Company fails to timely file required documents or reports with the Securities and Exchange Commission (“SEC”). If the Company merges or consolidates with a foreign entity, the Company may be required to pay additional taxes. The Company determined that the higher interest payments and tax payments required in certain circumstances were embedded derivatives that should be bifurcated and accounted for at fair value. The Company assessed the value of the embedded derivatives at each balance sheet date and determined it had nominal value.
In conjunction with the issuance of the 0.375% Notes, the Company purchased Capped Calls on the Company’s common stock with certain counterparties to reduce the potential dilution to its common stock (or, in the event the conversion is settled in cash, to provide a source of cash to settle a portion of its cash payment obligation) in the event that at the time of conversion its stock price exceeds the conversion price under the 0.375% Notes. The Capped Calls have an initial strike price of $335.90 per share, which represents a premium of 100% over the last reported sale price of the Company’s common stock of $167.95 per share on the date of the transaction. The Capped Calls cover 3.5 million shares of common stock and are recorded within stockholders’ equity on the consolidated balance sheets.
As of December 31, 2023 and 2022, the net carrying amount of the Notes was $791.8 million and $788.8 million, respectively, net of unamortized issuance costs of $8.2 million and $11.2 million, respectively. As of December 31, 2023, the effective interest rate was 0.76%.
The components of interest expense related to the Notes were as follows:
Years Ended December 31,
(in millions)
202320222021
Contractual interest expense
$3.0 $3.0 $3.0 
Amortization of debt issuance costs
3.0 3.0 1.9 
Total interest recognized on the Convertible Notes$6.0 $6.0 $4.9 
Senior Secured Credit Agreement
In May 2021, the Company entered into a senior secured credit agreement (the “Credit Agreement”), which includes a $500 million seven-year senior secured term loan B (the “Term Loan”) for net proceeds of $489.5 million, which was used to fund the cash portion of the repurchase of the 1.375% Notes discussed below. On November 30, 2022, the Company amended the Term Loan to bear interest at a rate of SOFR plus 3.25%, with a 0.50% SOFR floor. The Term Loan contains leverage and fixed charge coverage ratio covenants, both of which are measured upon the incurrence of future debt.
Under the same agreement, the Company obtained a senior secured revolving credit facility (the “Revolving Credit Facility”). In 2023, the Company increased the borrowing capacity under the Revolving Credit Facility to $300.0 million and amended the agreement such that outstanding borrowings bear interest at a rate of SOFR plus an applicable margin of 2.625% to 3.25%
based on the Company’s net leverage ratio and credit rating and extended the maturity date to the earlier of June 2028 or 91 days prior to the maturity date of the Company's term loan if still outstanding. The Revolving Credit Facility contains a covenant to maintain a specified leverage ratio under certain conditions when there are amounts outstanding. No amount was outstanding under the Revolving Credit Facility at December 31, 2023.
Borrowings under the Credit Agreement are guaranteed by certain wholly owned domestic subsidiaries of the Company and are secured by substantially all assets of the Company and of each subsidiary guarantor, subject to certain exceptions. Additionally, borrowings under the Credit Agreement are senior to all of the Company’s unsecured indebtedness, including the convertible notes.
In January 2024, the Company amended its Credit Agreement. Refer to Note 26 for additional information.
1.375% Convertible Senior Notes
In 2021, the Company repurchased $370.4 million in principal ($305.7 million net of discount and issuance costs) of its 1.375% Convertible Senior Notes due November 2024 (“1.375% Notes”) for $460.8 million in cash and the issuance of 2.2 million shares with a fair value of $622.7 million. The remaining $32.1 million in principal of the 1.375% Notes were converted into approximately 0.4 million shares with a fair value of $99.8 million. The debt repurchase and conversions resulted in a $42.4 million loss on extinguishment, including cash paid to the note holders as an inducement to convert and transaction costs.
Carrying Value
The carrying value amounts of the Company’s debt were as follows:
As of December 31,
(in millions)20232022
Term loan due May 2028
$479.2 $482.1 
0.375% Convertible Senior Notes
791.8 788.8 
Equipment financings
59.3 66.4 
5.15% Mortgage
62.6 64.5 
Finance lease obligation22.9 — 
Total debt, net$1,415.8 $1,401.8 
Maturity of Debt
The maturity of debt as of December 31, 2023 is as follows:
Years Ending December 31, (in millions)
2024$49.4 
2025$86.4 
2026$818.9 
2027$17.2 
2028$472.5