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Long-Term Debt | 3 Months Ended
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Mar. 29, 2025
Debt Disclosure [Abstract] |
Long-Term Debt | 6. Long-Term Debt The components of the Company’s long-term debt were as follows:
|  | March 29, 2025 |  |  | December 28, 2024 |
|  | Principal Balance |  |  | Unamortized Deferred Financing Costs |  |  | Unamortized Debt Discount |  |  | Effective Rate (1) |  |  | Principal Balance |  |  | Unamortized Deferred Financing Costs |  |  | Unamortized Debt Discount |  |  | Effective Rate (1) |
Revolving Credit Facility due April 13, 2026 |  | $ | 171,341 |  |  | $ | — |  |  | $ | — |  |  |  | 7.46 | % |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  | 0.00 | %
Term Loan Facility due April 13, 2028 |  |  | 945,000 |  |  |  | 3,326 |  |  |  | 6,894 |  |  |  | 8.48 | % |  |  | 945,000 |  |  |  | 3,604 |  |  |  | 7,468 |  |  |  | 9.37 | %
Senior Secured Notes due April 15, 2029 |  |  | 500,000 |  |  |  | 3,092 |  |  |  | — |  |  |  | 4.63 | % |  |  | 500,000 |  |  |  | 3,285 |  |  |  | — |  |  |  | 4.69 | %
Total |  | $ | 1,616,341 |  |  | $ | 6,418 |  |  | $ | 6,894 |  |  |  | 7.17 | % |  | $ | 1,445,000 |  |  | $ | 6,889 |  |  | $ | 7,468 |  |  |  | 7.74 | %
Less: Current portion |  |  | 1,603,029 |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  |  |  |  |  |  |  |
Unamortized deferred financing costs |  |  | 6,418 |  |  |  |  |  |  |  |  |  |  |  |  | 6,889 |  |  |  |  |  |  |  |  |  |
Unamortized debt discount |  |  | 6,894 |  |  |  |  |  |  |  |  |  |  |  |  | 7,468 |  |  |  |  |  |  |  |  |  |
Total long-term debt |  | $ | — |  |  |  |  |  |  |  |  |  |  |  | $ | 1,430,643 |  |  |  |  |  |  |  |  |  |
(1) Includes amortization of deferred financing costs and debt discount. In the second quarter of fiscal 2021, in connection with its refinancing of its then-existing credit facilities, the Company incurred approximately $1,000,000 in an aggregate principal amount of borrowings under its new credit facilities (as amended from time to time, the “Credit Facilities”) and issued $500,000 in aggregate principal amount of 4.500% Senior Secured Notes due 2029 (the “Senior Secured Notes”), each as described in further detail below. Credit Facilities The Credit Facilities were issued under a credit agreement, dated April 13, 2021 (as amended from time to time, the “Credit Agreement”), among the Company, as borrower, the lenders party thereto, and Bank of America, N.A. (“Bank of America”), as administrative agent and an issuing bank. The Credit Facilities consist of (1) $1,000,000 in aggregate principal amount of senior secured tranche B term loans due in 2028 (the “Term Loan Facility”) and (2) $175,000 in an aggregate principal amount of commitments under a senior secured revolving credit facility (which includes borrowing capacity available for letters of credit) due in 2026 (the “Revolving Credit Facility”). On January 2, 2025 and January 31, 2025, the Company borrowed $50,000 and $121,341, respectively, under the Revolving Credit Facility. These borrowings under the Revolving Credit Facility were incurred i n order to provide flexibility in assessing strategic options and to create financial flexibility. As of March 29, 2025, the Company had $1,116,341 in an aggregate principal amount of loans outstanding under the Credit Facilities, with $0 of availability and $3,659 in issued but undrawn letters of credit outstanding under the Revolving Credit Facility subject to its terms and conditions as discussed below. There were $171,341 of borrowings outstanding under the Revolving Credit Facility as of March 29, 2025. All obligations under the Credit Agreement are guaranteed by, subject to certain exceptions, each of the Company’s current and future wholly-owned material domestic restricted subsidiaries. All obligations under the Credit Agreement, and the guarantees of those obligations, are secured by substantially all of the assets of the Company and each guarantor, subject to customary exceptions, including: • a pledge of 100% of the equity interests directly held by the Company and each guarantor in any wholly-owned material subsidiary of the Company or any guarantor (which pledge, in the case of any non-U.S. subsidiary of a U.S. subsidiary, will not include more than 65% of the voting stock of such first-tier non-U.S. subsidiary), subject to certain exceptions; and • a security interest in substantially all other tangible and intangible assets of the Company and each guarantor, subject to certain exceptions. The Credit Facilities require the Company to prepay outstanding term loans, subject to certain exceptions, with: • 50% (which percentage will be reduced to 25% and 0% if the Company attains certain first lien secured net leverage ratios) of the Company’s annual excess cash flow; • 100% of the net cash proceeds of certain non-ordinary course asset sales by the Company and its restricted subsidiaries (including casualty and condemnation events, subject to de minimis thresholds), and subject to the right to reinvest 100% of such proceeds, subject to certain qualifications; and • 100% of the net proceeds of any issuance or incurrence of debt by the Company or any of its restricted subsidiaries, other than certain debt permitted under the Credit Agreement. The foregoing mandatory prepayments will be used to reduce the installments of principal on the Term Loan Facility. The Company may voluntarily repay outstanding loans under the Credit Facilities at any time without penalty, except for customary “breakage” costs with respect to Term SOFR loans under the Credit Facilities. In June 2023, in connection with the planned phase-out of LIBOR, the Company amended its Credit Facilities to replace LIBOR with Term SOFR as the benchmark rate under the Credit Agreement, which is calculated to include a credit spread adjustment of 0.11448%, 0.26161%, 0.42826%, or 0.71513% for 1, 3, 6, or 12 months period, respectively, in addition to the Term SOFR Screen Rate (as defined in the Credit Agreement) and the margin (which was not amended). Borrowings under the Term Loan Facility bear interest at a rate per annum equal to, at the Company’s option, either (1) an applicable margin plus a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of Bank of America and (c) the Term SOFR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; provided that such rate is not lower than a floor of 1.50% or (2) an applicable margin plus a Term SOFR rate determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, provided that Term SOFR is not lower than a floor of 0.50%. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to an applicable margin based upon a leverage-based pricing grid, plus, at the Company’s option, either (1) a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate as determined by the Federal Reserve Bank of New York, (b) the prime rate of Bank of America and (c) the Term SOFR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; provided that such rate is not lower than a floor of 1.00% or (2) a Term SOFR rate determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, provided such rate is not lower than a floor of zero. As of March 29, 2025, the applicable margins for the Term SOFR rate borrowings under the Term Loan Facility and the Revolving Credit Facility were 3.50% and 2.75%, resp ectively. On a quarterly basis, the Company pays a commitment fee to the lenders under the Revolving Credit Facility in respect of unutilized commitments thereunder, which commitment fee fluctuates depending upon the Company’s Consolidated First Lien Leverage Ratio (as defined in the Credit Agreement). The Credit Agreement contains other customary terms, including (1) representations, warranties and affirmative covenants, (2) negative covenants, including limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, distributions, prepayments of subordinated debt, amendments of material agreements governing subordinated indebtedness, changes to lines of business and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions, and (3) customary events of default. The availability of certain baskets and the ability to enter into certain transactions are also subject to compliance with certain financial ratios. In addition, if the aggregate principal amount of extensions of credit (inclusive of outstanding letters of credit) under the Revolving Credit Facility as of any fiscal quarter end exceeds 35%, or $61,250, of the aggregate revolving commitments, the Company is required to be in compliance with a Consolidated First Lien Leverage Ratio not to exceed 5.25:1.00 through and including the first fiscal quar ter of 2025 and not to exceed 5.00:1.00 thereafter. There were $171,341 of borrowings outstanding under the Revolving Credit Facility as of March 29, 2025. The Company’s Consolidated First Lien Leverage Ratio as of March 29, 2025 was 7.37:1.00. Accordingly, the Company expects an Event of Default, as defined under the Revolving Credit Facility, to occur upon the delivery of the next compliance certificate, due on May 13, 2025, and the expiration of the applicable cure period, which is to occur on or before June 4, 2025. If the Revolving Credit Facility is accelerated, the Term Loan Facility and Senior Secured Notes may be accelerated as the Term Loan Facility and Senior Secured Notes contain cross-default and/or cross-acceleration provisions. Senior Secured Notes The Senior Secured Notes were issued pursuant to an Indenture, dated as of April 13, 2021 (as amended, supplemented or modified from time to time, the “Indenture”), among the Company, the guarantors named therein and The Bank of New York Mellon, as trustee and notes collateral agent. The Indenture contains customary terms, events of default and covenants for an issuer of non-investment grade debt securities. These covenants include limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, distributions, prepayments of subordinated debt and transactions with affiliates, in each case subject to baskets, thresholds and other exceptions. The Senior Secured Notes accrue interest at a rate per annum equal to 4.500% and will mature on April 15, 2029. Interest on the Senior Secured Notes is payable semi-annually on April 15 and October 15 of each year. Commencing April 15, 2024, the Company may on any one or more occasions redeem some or all of the Senior Secured Notes at a purchase price equal to 102.250% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date, such optional redemption price decreasing to 101.125% on or after April 15, 2025 and to 100.000% on or after April 15, 2026. If a change of control occurs, the Company must offer to purchase for cash the Senior Secured Notes at a purchase price equal to 101% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date. Following the sale of certain assets and subject to certain conditions, the Company must offer to purchase for cash the Senior Secured Notes at a purchase price equal to 100% of the principal amount of the Senior Secured Notes, plus accrued and unpaid interest, if any, to, but not including, the purchase date. The Senior Secured Notes are guaranteed on a senior secured basis by the Company’s subsidiaries that guarantee the Credit Facilities. The Senior Secured Notes and the note guarantees are secured by a first-priority lien on all the collateral that secures the Credit Facilities, subject to a shared lien of equal priority with the Company’s and each guarantor’s obligations under the Credit Facilities and subject to certain thresholds, exceptions and permitted liens. Outstanding Debt At March 29, 2025, the Company had $1,616,341 outstanding under the Credit Facilities and the Senior Secured Notes, consisting of borrowings under the Term Loan Facility of $945,000, $171,341 drawn down on the Revolving Credit Facility and $500,000 in aggregate principal amount of Senior Secured Notes issued and outstanding. At March 29, 2025 and December 28, 2024, the Company’s debt consisted of both fixed and variable-rate instruments. The Company has historically entered into interest rate swaps to hedge a portion of the cash flow exposure associated with the Company’s variable-rate borrowings. At March 29, 2025, the Company did not have any interest rate swaps in effect. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on the Company’s outstanding debt, exclusive of the impact of any applicable interest rate swaps, was approximately 7.18% and 7.75% per annum at March 29, 2025 and December 28, 2024, respectively, based on interest rates on these dates. The weighted average interest rate (which includes amortization of deferred financing costs and debt discount) on the Company’s outstanding debt, including the impact of any applicable interest rate swaps, was approximately 7.18% and 7.47% per annum at March 29, 2025 and December 28, 2024, respectively, based on interest rates on these dates.

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