Long-term Debt

9 Months Ended

Sep. 28, 2024

Debt Disclosure [Abstract]

Long-term Debt

10.LONG-TERM DEBT

Long-term debt included the following (in thousands):

	September 28, 2024			December 30, 2023
First lien term loans	$	1,578,754		$	1,321,687
Debt issuance costs, net		(66,504	)		(71,463	)
Total debt		1,512,250			1,250,224
Current portion of long-term debt		(15,827	)		(13,250	)
Long-term debt, net	$	1,496,423		$	1,236,974

Senior Secured Credit Facilities—The Company's Credit Agreement includes $1,750.0 million senior secured credit facilities which consist of a $1,325.0 million first lien term loan and a $265.0 million incremental first lien term loan (collectively, the "First Lien Term Loan Facility") and a $160.0 million revolving credit facility (the “First Lien Revolving Credit Facility”) (collectively, the “Senior Secured Credit Facilities”).

The Company issued the incremental first lien term loan of $265.0 million in March 2024 through an amendment to the Credit Agreement. The amendment increased the required quarterly principal payments on the First Lien Term Loan Facility to $4.0 million from $3.3 million, beginning with the payment due for the quarter ended March 30, 2024. In April 2024, the Company entered into a repricing amendment to the Credit Agreement. As of the effective date of the amendment, the First Lien Term Loan Facility bears interest at a variable rate equal to the Secured Overnight Financing Rate ("SOFR") plus 4.50% per annum. Additionally, as of the effective date of the amendment, amounts drawn under the First Lien Revolving Credit Facility bear interest at SOFR plus an applicable rate between 4.00% and 4.50% per annum, and fees on the outstanding balance of letters of credit bear interest at an applicable rate between 4.00% and 4.50% per annum, based on a pricing grid of the Company’s First Lien Term Loan Facility net leverage ratio. The Credit Agreement allows for letters of credit to be drawn against the current borrowing capacity of the First Lien Revolving Credit Facility, capped at $115.0 million. The Company pays certain fees under the First Lien Revolving Credit Facility, including a fronting fee of 0.125% per annum, as well as fees on the unused portion of the First Lien Revolving Credit Facility at a rate between 0.25% and 0.50% per annum, based on a pricing grid of the Company's First Lien Term Loan Facility net leverage ratio. Prior to the amendment, the First Lien Term Loan Facility bore interest at a variable rate equal to SOFR plus 5.00% per annum. Additionally, prior to the April 2024 amendment, amounts drawn under the First Lien Revolving Credit Facility bore interest at SOFR plus an applicable rate between 4.50% and 5.00% per annum, and fees on the outstanding balance of letters of credit bore interest at an applicable rate between 4.50% and 5.00% per annum, based on a pricing grid of the Company’s First Lien Term Loan Facility net leverage ratio. All other terms under the Credit Agreement remain unchanged as a result of the amendments. Refer to Note 18, Subsequent Events, for information on debt transactions that occurred subsequent to September 28, 2024.

Principal payments on the First Lien Term Loan Facility are payable in arrears on the last business day of each calendar year quarter, with the final payment of the remaining principal balance due in June 2030 when the First Lien Term Loan Facility matures. Interest payments on the Senior Secured Credit Facilities are payable in arrears on the last business day of each calendar year quarter. The First Lien Revolving Credit Facility matures in June 2028.

All obligations under the Credit Agreement are secured by substantially all the assets of the Company and its subsidiaries. The Credit Agreement contains various financial and nonfinancial loan covenants and provisions. Commencing with the fiscal quarter ended December 30, 2023, the Company must comply with a quarterly maximum First Lien Term Loan Facility net leverage ratio financial loan covenant. The First Lien Term Loan Facility net leverage ratio is required to be tested only if, on the last day of each fiscal quarter, the amount of revolving loans outstanding under the First Lien Revolving Credit Facility, excluding all letters of credit, exceeds 35% of total revolving commitments on such date. Nonfinancial loan covenants restrict the Company’s ability to, among other things, incur additional debt; make fundamental changes to the business; make certain restricted payments, investments, acquisitions, and dispositions; or engage in certain transactions with affiliates. As of September 28, 2024, the Company was in compliance with the covenants of the Credit Agreement.

An annual calculation of excess cash flows, commencing with the fiscal year ending December 28, 2024, determines if the Company will be required to make a mandatory prepayment on the First Lien Term Loan Facility. Mandatory prepayments would reduce future required quarterly principal payments.

Other Credit Facilities—In February 2024, the Company entered into a credit facilities agreement (the "LOC Agreement") which allows for $20.0 million in letters of credit to be issued. The Company pays certain fees under the LOC Agreement, including fees on the outstanding balance of letters of credit at a rate of 5.95% per annum and fees on the unused portion of letters of credit at a rate of 0.25% per annum. Fees on the letters of credit are payable in arrears on the last business day of each March, June, September, and December. The LOC Agreement matures in December 2026. Upon entering into the LOC Agreement, the Company issued $20.0 million in letters of credit and cancelled $16.7 million of outstanding letters of credit under the First Lien Revolving Credit Facility.

The Company had no outstanding borrowings on the First Lien Revolving Credit Facility and had an available borrowing capacity of $104.2 million after giving effect to the outstanding letters of credit under the Credit Agreement of $55.8 million as of September 28, 2024. Additionally, the Company had no outstanding borrowings on the First Lien Revolving Credit Facility and had an available borrowing capacity of $87.5 after giving effect to the outstanding letters of credit under the Credit Agreement of $72.5 million as of December 30, 2023. The Company had $20.0 million outstanding letters of credit under the LOC Agreement as of September 28, 2024.

The Company capitalized original issue discount and debt issuance costs of $0.9 million during the nine months ended September 28, 2024, related to the March 2024 and April 2024 amendments to the Credit Agreement. The Company capitalized original issue discount and debt issuance costs of $73.6 million during the nine months ended September 30, 2023, related to the June 2023 refinancing. These costs are being amortized over the terms of the related debt instruments and amortization expense

is included within interest expense in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. No debt issuance costs were incurred during the three months ended September 28, 2024 and September 30, 2023.

The Company recognized a $0.9 million loss on extinguishment of debt during the nine months ended September 28, 2024 related to the unamortized original issue discount and deferred financing costs that were written off in connection with certain lenders that had reduced principal holdings or did not participate in the loan syndication as a result of the April 2024 amendment to the Credit Agreement. The Company recognized a $4.4 million loss on extinguishment of debt during the nine months ended September 30, 2023 related to the unamortized deferred financing costs that were written off in connection with the term loans and senior secured notes that were extinguished. Losses from extinguishment of debt are recognized in interest expense in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. The Company did not incur any gain or loss on extinguishment of debt during the three months ended September 28, 2024 and September 30, 2023.

Future principal payments on long-term debt for the remaining fiscal year ending December 28, 2024 and for the fiscal years thereafter are as follows (in thousands):

Remainder of 2024	$	3,957
2025		19,784
2026		15,827
2027		15,827
2028		15,827
Thereafter		1,507,532
	$	1,578,754