Financial instruments

3 Months Ended

Apr. 02, 2022

Debt Disclosure [Abstract]

Financial instruments

Financial instruments

Long-term debt consists of the following:

	April 2, 2022		December 31, 2021
Term Loan due December 2026 (2.46% at April 2, 2022)	$	356,240	$	360,750
Revolver due December 2026 (2.46% at April 2, 2022)	15,000		—
Less:
Current portion of long-term debt	(20,292)		(18,038)
Unamortized debt issuance cost	(1,600)		(1,687)
Unamortized discount	(1,309)		(1,381)
	$	348,039	$	339,644

The 2019 Credit Agreement requires the Company to comply with financial and other covenants. The Company complied with all covenants as of April 2, 2022. The 2019 Credit Agreement contains a $50,000 revolving credit facility, from which there was $15,000 in outstanding borrowings as of April 2, 2022 and none at December 31, 2021.

The estimated fair value of the Term Loan as of April 2, 2022 was $322,768. The fair value of these obligations was determined by using a discounted cash flow model based on current market interest rates available to the Company. These inputs are corroborated by observable market data for similar obligations and are classified as Level 2 instruments within the fair value hierarchy.

The Company enters into interest rate swap agreements to limit its exposure to changes in the variable interest rate on its long-term debt. The Company has one non-designated interest rate swap agreement and has no other active derivatives. The swap is carried at fair value on the balance sheet (Refer to Note 5. Fair value measurements) with changes in fair value recorded as interest income or expense within the consolidated statements of operations and comprehensive (loss) income. Net interest income of $3,924 and $1,565 were recorded related to the change in fair value of the interest rate swap for the three months ended April 2, 2022 and April 3, 2021, respectively.

The notional amount of the swap totaled $100,000, or 28.1% of the Term Loan outstanding principal at April 2, 2022. The swap locked in the variable portion of the interest rate on the $100,000 notional at 0.64%