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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies 2013 Credit Facility In August 2013, the Company entered into a Loan and Security Agreement with Comerica Bank (as amended, the “2013 Credit Facility”), which consisted of a revolving credit line of up to $50.0 million with a sub-limit of $15.0 million for the issuance of letters of credit. Borrowings under the revolving credit line bore interest on the principal amount outstanding at a variable interest rate based on either LIBOR or the bank’s prime rate, with no additional margin. The Company was charged fees on the uncommitted portion of the credit line of approximately 0.2% as long as total borrowings were less than $15.0 million. The 2013 Credit Facility was replaced by the 2022 Credit Facility (as defined below). 2022 Credit Facility In September 2022, the Company and its wholly owned subsidiary, Warby Parker Retail, Inc., (together, the "Borrowers") entered into a Credit Agreement with Comerica Bank and the lenders from time to time party thereto (as amended, the "2022 Credit Facility"), which replaced the 2013 Credit Facility. The 2022 Credit Facility consists of a $100.0 million five-year revolving credit facility with sublimits of $15.0 million for letters of credit and $5.0 million for swing line notes. The 2022 Credit Facility includes an option for the Company to increase the available amount by up to $75.0 million, for a maximum borrowing capacity of $175.0 million, subject to the consent of the lenders funding the increase and certain other conditions. Proceeds of the borrowings under the 2022 Credit Facility are expected to be used for working capital and other general corporate purposes in the ordinary course of business. The Company is permitted to repay borrowings under the 2022 Credit Facility at any time, in whole or in part, without penalty. Under the 2022 Credit Facility, borrowings bear interest on the principal amount outstanding at a variable interest rate either (a) based on the greater of (1) the prime rate (as defined in the credit agreement), (2) the federal funds rate plus 1%, and (3) the Bloomberg Short-Term Bank Yield Index rate (“BSBY Rate”) for a one month tenor plus 1%, in each case plus an applicable margin of 0.5% - 0.8% depending on the Company’s leverage ratio, or (b) the BSBY Rate plus an applicable margin of 1.5% - 1.8% depending on the Company’s leverage ratio. The Company is charged commitment fees of 0.5% whether or not amounts have been borrowed. Both interest on principal and commitment fees are included in interest expense on the condensed consolidated statements of operations. The 2022 Credit Facility contains a financial maintenance covenant which takes effect once total borrowings first exceed $60.0 million, and at all times thereafter, that requires the Company to maintain a maximum consolidated senior net leverage ratio of 3:1. The 2022 Credit Facility contains customary affirmative and negative covenants, including limits on indebtedness, liens, capital expenditures, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets, as well as representations, warranties and event of default provisions. The obligations of the Borrowers under the Credit Agreement are secured by first-lien security interests in substantially all of the assets of the Borrowers. In addition, the obligations are required to be guaranteed in the future by certain additional domestic subsidiaries of the Company. Other than letters of credit outstanding of $4.3 million and $4.2 million as of September 30, 2023 and December 31, 2022, respectively, used to secure certain leases in lieu of a cash security deposit, there were no other borrowings outstanding under the 2022 Credit Facility or 2013 Credit Facility. Litigation During the normal course of business, the Company may become subject to legal proceedings, claims and litigation. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. Accruals for loss contingencies are recorded when a loss is probable, and the amount of such loss can be reasonably estimated. On March 13, 2023, a former employee, on behalf of herself and a proposed class of California hourly employees, filed a complaint against the Company, alleging violations of various California wage and hour laws. The matter is currently pending in the United States District Court for the Northern District of California. Pham v. Warby Parker Inc. (Case No. 5:23-cv-01884-NC; N.D. Cal.). On June 16, 2023, another former employee filed a related representative action in the Santa Clara County Superior Court of California pursuant to California’s Private Attorneys General Act, asserting largely overlapping claims, seeking civil penalties on behalf of the state. Chery v. Warby Parker Inc. (Case No. 23CV417693; Cal. Super. Ct.). Since that time, one additional follow on Private Attorneys General Act lawsuit has been filed. We deny the allegations and intend to oppose the certification of any class or award of civil penalties, and to defend the each litigation vigorously. However, given the early stage of each litigation, the Company is unable to estimate the possible loss or range of loss, if any, that may result from these matters. In addition to the matters described above, as of September 30, 2023, the Company is currently involved in other legal proceedings which, in the opinion of the Company’s management, will not materially affect the Company’s financial position, results of operations, or cash flows should such litigation be resolved unfavorably.

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