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Debt Agreements
 3 Months Ended
Mar. 31, 2023
Debt Disclosure [Abstract]  
Debt Agreements Debt Agreements
On December 8, 2021, the Company entered into and became a party to a credit agreement by and between the Company, the various financial institutions and Morgan Stanley Senior Funding, Inc., as administrative agent (the “Administrative Agent”) (as amended from time to time, the “Credit Agreement”) consisting of $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”).

Additionally, on October 2, 2022, the Company became a party to an incremental agreement (the “Incremental Agreement”) with the lenders party thereto and the Administrative Agent to provide incremental term loans (the “Incremental Term Loan”) in an aggregate principal amount of $55,000. The Incremental Term Loan matures in three years. The Incremental Agreement amended the Credit Agreement (the Credit Agreement, as amended by the Incremental Agreement, the “Amended Credit Agreement”).

On October 26, 2022, the Company entered into an interest rate cap agreement, on the London Inter-bank offered rate (“LIBOR”) component of interest, with Bank of America as the counterparty. The interest rate cap became 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 the 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 is not lower than a floor of 0.50%.

The interest rate for the Term Loan was 9.13% as of March 31, 2023 and 7.38% as of December 30, 2022. The interest rate for the Incremental Term Loan was 11.48% as of March 31, 2023 and 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. The interest rate for the Revolving Credit Facility was 9.39% as of March 31, 2023 and 9.22% as of December 30, 2022.

Subsequent to the period end, the Company, on April 17, 2023, amended the Credit Agreement to modify 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 to utilize the forward-looking term rate based on the Secured Overnight Financing Rate (“SOFR”) in place of LIBOR going forward. See Note 19. Subsequent Events for further discussion.

The Term Loan amortizes in fixed equal quarterly installments in an amount equal to 1.00% 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 March 31, 2023 and December 30, 2022 was as follows:

InstrumentMaturity DateMarch 31, 2023December 30, 2022
Credit Agreement
Term LoanDecember 8, 2028$460,350 $461,513 
Incremental Term LoanOctober 2, 2025$54,863 $55,000 
Revolving Credit FacilityDecember 8, 2026$50,000 $12,000 
Outstanding letters of CreditDecember 8, 2026$9,760 $5,060 


The amount available under the Revolving Credit Facility was $40,240 and $82,940 as of March 31, 2023 and December 30, 2022, respectively.

As of March 31, 2023, the future scheduled maturities of the above notes payable are as follows:

Remainder of 2023
$3,900 
20243,900 
202558,688 
202654,650 
20275,813 
Thereafter438,262 
Total future maturities of debt565,213 
Unamortized debt issuance costs(15,083)
Total indebtedness550,130 
Less: Current maturities of long-term debt5,200 
Long-term debt and revolving credit facility$544,930 

Unamortized costs related to the issuance of the Term Loan were $13,959 and $14,655 as of March 31, 2023 and December 30, 2022, respectively, and were 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 $1,124 and $1,200 as of March 31, 2023 and December 30, 2022, respectively, and were presented as a direct deduction from the carrying amount of the revolving
credit facility. The costs related to debt issuances are amortized to interest expense over the life of the related debt. As of March 31, 2023, the future amortization of debt issuance costs was as follows:

Remainder of 2023
$2,395 
20243,396 
20253,374 
20262,123 
20271,918 
Thereafter1,877 
Total$15,083 

Debt Covenants and Default Provisions — There have been no changes to the debt covenants or default provisions related to the Company’s outstanding debt arrangements or other obligations during the current year. The Company was in compliance with all debt covenants as of March 31, 2023 and December 30, 2022. For additional information on the Company’s debt arrangements, debt covenants and default provisions, see Note 8 of the Notes to the Consolidated Financial Statements for the year ended December 30, 2022, in the Annual Report.

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. As of December 30, 2022, the Company did not incur a required additional payment.