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Long-Term Debt | 6 Months Ended
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Jun. 26, 2024
Debt Disclosure [Abstract] |
Long-Term Debt | Long-Term Debt The Company and certain of its subsidiaries have a credit facility consisting of a five-year $400 million senior secured revolver (with a $25 million letter of credit sublimit). The credit facility includes an accordion feature that would allow us to increase the size of the facility to $450 million. Borrowings bear a tiered interest rate, which is based on the Company's consolidated leverage ratio. The maturity date for the credit facility is August 26, 2026. The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by the Company and its material subsidiaries and is secured by assets of the Company and its subsidiaries, including the stock of its subsidiaries (other than its insurance captive subsidiary). It includes negative covenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. We were in compliance with all financial covenants as of June 26, 2024. As of June 26, 2024, we had outstanding revolver loans of $257.5 million and outstanding letters of credit under the credit facility of $16.3 million. These balances resulted in unused commitments of $126.2 million as of June 26, 2024 under the credit facility. As of June 26, 2024, borrowings under the credit facility bore interest at a rate of Adjusted Daily Simple SOFR plus 2.25%. Letters of credit under the credit facility bore interest at a rate of 2.38%. The commitment fee, paid on the unused portion of the credit facility, was set to 0.35%. Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 7.68% and 7.41% as of June 26, 2024 and December 27, 2023, respectively. Taking into consideration our interest rate swaps that are designated as cash flow hedges, the weighted-average interest rate of outstanding revolver loans was 5.18% and 5.04% as of June 26, 2024 and December 27, 2023, respectively. Interest Rate Hedges We have receive-variable, pay-fixed interest rate swaps to hedge the forecasted cash flows of our floating rate debt. A summary of our interest rate swaps as of June 26, 2024 is as follows:
Trade Date |  | Effective Date |  | Maturity Date |  | Notional Amount |  | Fair Value |  | Fixed Rate
|  |  |  |  |  | (In thousands) |  |
Swaps designated as cash flow hedges |  |  |  |  |  |  |  |  |  |
March 20, 2015 |  | March 29, 2018 |  | March 31, 2025 |  | $ | 120,000 |  |  | $ | 2,464 |  |  | 2.34 | %
October 1, 2015 |  | March 29, 2018 |  | March 31, 2026 |  | $ | 50,000 |  |  | $ | 1,910 |  |  | 2.37 | %
February 15, 2018 |  | March 31, 2020 |  | December 31, 2033 |  | $ | 52,000 |  | (1) | $ | 13,764 |  |  | 3.09 | %
Total |  |  |  |  |  | $ | 222,000 |  |  | $ | 18,138 |  |  |
(1) The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $335 million on August 31, 2033. Termination and Designation of Certain Interest Rate Swaps During the quarter ended March 29, 2023, we terminated a portion of our hedging relationship entered into in 2018 (“2018 Swaps”), reducing the previous maximum notional amount of $425 million on August 31, 2033 to $335 million. We received $1.5 million of cash as a result of the termination, which is recorded as a component of operating activities in our Consolidated Statement of Cash Flows for the year-to-date period ended June 28, 2023. In addition, during the quarter ended March 29, 2023, we designated the remaining 2018 Swaps as cash flow hedges of our exposure to variability in future cash flows attributable to variable rate interest payments due on forecasted notional amounts. Changes in Fair Value of Interest Rate Swaps To the extent the swaps are highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in the Consolidated Statements of Income but are reported as a component of other comprehensive income (loss). Our interest rate swaps are designated as cash flow hedges with unrealized gains and losses recorded as a component of accumulated other comprehensive loss, net. As of June 26, 2024, the fair value of the swaps designated as cash flow hedges was an asset of $18.1 million, recorded as a component of other noncurrent assets. The designated swaps have an offsetting amount (before taxes) recorded as a component of accumulated other comprehensive loss, net in our Consolidated Balance Sheets. See Note 13 for amounts recorded in accumulated other comprehensive loss related to interest rate swaps. During the year-to-date period ended June 26, 2024, we reclassified $3.0 million from accumulated other comprehensive loss, net as a reduction to interest expense, net. We expect to reclassify $6.5 million from accumulated other comprehensive loss, net as a reduction to interest expense, net in our Consolidated Statements of Income related to swaps designated as cash flow hedges during the next 12 months. For the periods prior to their designation as cash flow hedges, changes in the fair value of the 2018 Swaps were recorded as a component of other nonoperating (income) expense, net in our Consolidated Statements of Income. For the year-to-date period ended June 28, 2023, we recorded expense of $10.6 million as a component of other nonoperating (income) expense, net related to the 2018 Swaps resulting from changes in fair value. Amortization of Certain Amounts Included in Accumulated Other Comprehensive Loss, Net At June 26, 2024, we had a total of $63.9 million (before taxes) included in accumulated other comprehensive loss, net related to (i) the discontinuance of hedge accounting treatment related to certain cash flow hedges in prior years and (ii) the fair value of certain swaps at the date of designation as cash flow hedges that are being amortized into our Consolidated Statements of Income as a component of interest expense, net over the remaining term of the related swap. For the quarter and year-to-date period ended June 26, 2024, we recorded unrealized losses of $0.2 million and $0.3 million, respectively, to interest expense, net. For the quarter and year-to-date period ended June 28, 2023, we recorded unrealized losses of $0.1 million to interest expense, net. We expect to amortize $1.6 million from accumulated other comprehensive loss, net to interest expense, net in our Consolidated Statements of Income related to dedesignated interest rate swaps during the next 12 months.

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