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Debt Agreements
 12 Months Ended
Dec. 30, 2022
Debt Disclosure [Abstract]  
Debt Agreements Debt Agreements
On August 4, 2017, the Company’s wholly owned subsidiary, Wirepath, LLC, (“Borrower”), entered into a credit agreement (as amended from time to time, “Old Credit Agreement”), consisting of a senior secured term loan (“Old Initial Term Loan”) and a senior secured revolving credit facility (“Old Revolving Credit Facility”). On August 1, 2019, the Borrower amended the Old Credit Agreement to borrow an additional senior secured term loan (“Old Incremental Term Loan” and, together with the Old Initial Term Loan, as amended, “Old Term Loans”) and increased the commitments under the Old Revolving Credit Facility.

On August 4, 2021, the Company used a portion of the net proceeds from the IPO to prepay $216,902 in aggregate of the amount of the Old Incremental Term Loan consisting of $215,874 in principal plus accrued interest of $1,028. In connection with the prepayment, the Company incurred a charge of $6,645 related to the write-off of the proportionate amount of the unamortized debt issuance costs at the time of the prepayment which was recorded in loss on extinguishment of debt on the Company’s consolidated statement of operations for the year ended December 31, 2021. The unamortized
debt issuance costs are allocated between the remaining original loan balance and the portion of the loan paid down on a pro-rata basis.

On December 8, 2021, the Company entered into a Credit Agreement (the “Credit Agreement”) with various financial institutions consisting of a $465,000 in aggregate principal amount of senior secured term loans maturing in seven years (the “Term Loan”) and a $100,000 senior secured revolving credit facility (which includes borrowing capacity available for letters of credit) maturing in five years (the “Revolving Credit Facility”).

In connection with the closing of the Credit Agreement, the Company repaid in full approximately $451,400 of existing borrowings, including accrued interest. The Old Term Loans and Old Revolving Credit Facility and related agreements and documents under the Old Credit Agreement were terminated upon the effectiveness of the Credit Agreement.

The issuance of the Credit Agreement and repayment of the Old Term Loans were evaluated in accordance with ASC 470-50-40 - Debt-Modifications and Extinguishments - Derecognition, to determine whether the refinancing transaction should be accounted for as a debt modification or extinguishment. Each lender involved in the refinancing transaction was analyzed to determine if its participation was a debt modification or an extinguishment. Debt issuance costs for exiting lenders who chose not to participate in the Term Loan were accounted for as extinguishments. Debt discounts and costs incurred with third parties for the issuance of the Term Loan totaling $9,079 were capitalized and amortized over the term of the Term Loan. These capitalized fees associated with new and continuing lenders are presented as cash flows from financing activities on the consolidated statements of cash flows. The Company wrote off $5,427 in debt issuance costs related to the extinguishment of the Old Term Loans which was recorded in loss on extinguishment of debt on our consolidated statement of operations for the year ended December 31, 2021.

On October 2, 2022, the Company entered into an Incremental Agreement (the “Incremental Agreement”) with the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent (the “Administrative Agent”) to provide incremental term loans (the “Incremental Term Loan”) in an aggregate principal amount of $55,000. The Incremental Agreement amended the Credit Agreement, dated as of December 8, 2021, among the Company, the lenders party thereto from time to time, the Administrative Agent and the other parties party thereto (as amended by the Incremental Agreement, the “Amended Credit Agreement’). The Company used the proceeds from the Amended Credit Agreement to pay down the existing revolver balance, further increasing its liquidity and allowing for additional flexibility to invest in organic or inorganic growth or use for general corporate purposes. The term loans issued under the Incremental Agreement will mature on the third anniversary of the funding date.
On October 26, 2022, the Company entered into an interest rate cap agreement, on the LIBOR component of interest, with Bank of America as the counterparty. The interest rate cap is effective December 31, 2022. The Company will pay a premium of $6,573 at the maturity date of December 31, 2025. The notional amount of the interest rate cap is $350,000 and has a strike rate of 5.00%, which effectively caps the LIBOR rate on $350,000 of the floating rate debt at 5.00%.

Borrowings under the Term Loan will 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, (b) the prime rate and (c) the eurocurrency 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 eurocurrency 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 such rate is not lower than a floor of 0.50%. Borrowings under the Incremental Term Loan will 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, (b) the prime rate and (c) the forward-looking term rate based on Secured Overnight Financing Rate (“SOFR”) for an interest period of one month plus 1.00%; provided that such rate is not lower than a floor of 1.50% or (2) an applicable margin plus a forward-looking rate based on SOFR for the interest period relevant to such borrowing provided that such rate in not lower than a floor of 0.50%. The interest rate for the Term Loan was 7.38% as of December 30, 2022 and 5.00% December 31, 2021. The interest rate for the Incremental Term Loan was 10.42% as of December 30, 2022.

Borrowings under the Revolving Credit Facility will 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, (b) the prime rate and (c) the eurocurrency rate determined by reference to the cost of funds adjusted for certain additional costs, plus 1.00%; provided such rate is not lower than a floor of 1.00% or (2) a eurocurrency rate determined by reference to the applicable cost of funds for such borrowing adjusted for certain additional costs; provided such rate is not lower than a floor of zero. As of December 30, 2022, the interest rate of borrowings for the Revolving Credit facility was 9.22%.

The Term Loan amortizes in fixed equal quarterly installments in an amount equal to 1.0% per annum of the total aggregate principal amount thereof immediately after borrowing, with the balance due at maturity. The Company may voluntarily prepay loans or reduce commitments under the Credit Agreement, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty (subject to customary exceptions).

The Company’s outstanding debt as of December 30, 2022 and December 31, 2021 was as follows:

Maturity Date
December 30, 2022
December 31, 2021
Credit Agreement
Term Loan12/8/2028$461,513 $465,000 
Incremental Term Loan10/2/2025$55,000 $— 
Revolving Credit Facility12/8/2026$12,000 $— 
Outstanding letters of credit12/8/2026$5,060 $4,894 

The amount available under the Revolving Credit Facility was $82,940 and $95,106 as of December 30, 2022 and December 31, 2021.

As of December 30, 2022, the future scheduled maturities of the above notes payable are as follows:

2023$5,200 
20243,900 
202558,688 
202616,650 
20275,813 
Thereafter438,262 
Total future maturities of long-term debt528,513 
Unamortized debt issuance costs(15,855)
Total indebtedness512,658 
Less: Current maturities of long-term debt5,063 
Long-term debt$507,595 

Unamortized costs related to the issuance of the Term Loan were $14,655 as of December 30, 2022 and $12,256 as of December 31, 2021, and was presented as a direct deduction from the carrying amount of long-term debt. Unamortized costs related to the issuance of the Revolving Credit Facility were $1,200 as of December 30, 2022 and were presented as a direct deduction from the carrying amount of the Revolving Credit Facility. As of December 31, 2021, unamortized costs related to the issuance of the Revolving Credit Facility were $1,506 and were included in other assets in the consolidated balance sheet. The costs related to debt issuances are amortized to interest expense over the life of the related debt.
As of December 30, 2022, the future amortization of debt issuance costs was as follows:

2023$3,166 
20243,396 
20253,374 
20262,123 
20271,918 
Thereafter1,878 
Total$15,855 

Interest expense as of December 30, 2022, December 31, 2021 and December 25, 2020 consisted of the following:

202220212020
Interest expense from Old Credit Agreement$— $26,586 $39,408 
Interest expense from Term Loan30,993 1,485 — 
Interest expense from Revolving Credit Facility2,462 38 — 
Interest expense, Other
238 — 20 
Amortization of debt issuance costs2,146 5,053 6,101 
Total interest expense
$35,839 $33,162 $45,529 

Debt Covenants and Default Provisions — The Credit Agreement contains various customary affirmative and negative covenants, including restrictive covenants that place restrictions on us and may limit our ability to, among other things, incur additional debt and liens, repurchase our securities, undertake transactions with affiliates, make other investments, consolidate, merge, sell or otherwise dispose of all or substantially all of our assets, pay dividends or distribute excess cash flow. The Company was in compliance with all debt covenants as of December 30, 2022 and December 31, 2021.

In addition, the Revolving Credit Facility is subject to a first lien secured net leverage ratio of 7.50 to 1.00, tested quarterly commencing with the fiscal quarter ending on or about June 30, 2022, if, and only if, the aggregate principal amount from the Revolving Credit Facility loans, letters of credit (to the extent not cash collateralized or backstopped or, in the aggregate, not in excess of the greater of $10,000 and the stated face amount of letters of credit outstanding on the initial closing date of the Credit Agreement) and swingline loans outstanding and/or issued, as applicable, exceeds 35.0% of the total amount of the Revolving Credit Facility commitments.

The Company may also be required to make additional payments under the financing agreement equal to a percentage of the Company’s annual excess cash flows or net proceeds from any non-ordinary course asset sales or certain debt issuances, if any. The lender has the option to decline the prepayment. The Company did not incur any expected mandatory excess cash flow payments for the period ended December 30, 2022 or December 31, 2021.