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Indebtedness
 12 Months Ended
Dec. 28, 2024
Debt Disclosure [Abstract]  
Indebtedness Indebtedness
Long-term debt consisted of the following:
(in thousands)December 28, 2024December 30, 2023
Senior Secured Notes$445,500 $495,000 
Term Loan Facility315,756 321,756 
Total face value of debt761,256 816,756 
Less: current portion of long-term debt6,000 4,500 
Less: unamortized debt issuance costs and debt discount20,123 27,663 
Long-term debt, net$735,133 $784,593 
In 2023, the Company used the net proceeds from its IPO, the net proceeds from issuing $550.0 million aggregate principal amount of Senior Secured Notes (the “Notes”) and cash on hand, in whole or in part, to repay $485.8 million in outstanding borrowings on its Term Loan Facility and $55.0 million aggregate principal amount of its Notes, resulting in a loss on extinguishment of debt of $16.6 million. Proceeds from the February 2023 Notes issuance were also used to pay a $262.2 million dividend and a $23.6 million one-time bonus to certain employees and directors participating in our management equity incentive plan who were unable to participate in the dividend. The bonus was recorded in salaries, wages and benefits in the Consolidated Statements of Operations and Comprehensive Income.
On January 30, 2024, the Company entered into the third amendment to its Senior Secured Credit Facilities resulting in a loss on extinguishment of debt of $0.7 million. On March 4, 2024, the Company redeemed $49.5 million aggregate principal amount of the Notes, equal to 10% of the outstanding balance at December 30, 2023. In addition to paying accrued interest, the Company paid a premium of 3%, or $1.5 million, on the partial redemption. This transaction resulted in a loss on extinguishment of debt of $3.4 million.
On February 6, 2025, the Company redeemed $44.5 million aggregate principal amount of the Notes, equal to 10% of the outstanding balance at December 28, 2024. In addition to paying accrued interest, the Company paid a premium of 3%, or $1.3 million, on the partial redemption. This transaction resulted in a loss on extinguishment of debt of $2.7 million.
Senior Secured Notes
The Notes bear interest at a fixed rate of 9.75% with interest due every February 15 and August 15. As of December 28, 2024, the Company had a $16.1 million balance for accrued interest on the Notes, which is classified in accounts payable & accrued liabilities in the Consolidated Balance Sheets. The Notes are due in full at maturity in April 2028, coterminous with the Term Loan Facility. The Company’s principal subsidiaries in the U.S. are issuers of the Notes. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by most of the Company’s U.S. and Canadian subsidiaries (other than the issuers). The Notes are secured by a first priority lien on substantially all assets of the issuers and guarantors, subject to certain exceptions, on an equal and ratable basis with indebtedness under the Term Loan Facility. The Notes rank pari passu with the Term Loan Facility in right of payment and are subordinated to our existing super-priority Revolving Credit Facility in right of payment.
We may redeem the Notes in whole or in part at the redemption prices set forth below, plus accrued and unpaid interest:
For the Period
Redemption Price
February 15, 2025 through February 14, 2026104.875 %
February 15, 2026 through February 14, 2027102.438 %
On or after February 15, 2027100.000 %
If a change in control occurs, we will be required to repurchase the Notes at a purchase price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest.
The indenture, pursuant to which the Notes were issued, contains customary affirmative and negative covenants, which are similar in scope to those in the Senior Secured Credit Facilities (see below), although there are no financial maintenance covenants in the indenture governing the Notes. Certain covenants may be suspended in the event the Notes are assigned an investment grade rating from two of three rating agencies.
Senior Secured Credit Facilities
The Senior Secured Credit Facilities consist of a term loan facility (“Term Loan Facility”) and a revolving credit facility (“Revolving Credit Facility”). The Company’s principal subsidiaries in the U.S. and Canada are borrowers under the Senior Secured Credit Facilities and most of the Company’s U.S. and Canadian subsidiaries are guarantors. The Senior Secured Credit Facilities are secured by a first priority lien on substantially all assets of the borrowers and guarantors, subject to certain exceptions. The Revolving Credit Facility is senior to the Term Loan Facility in right of payment.
The Senior Secured Credit Facilities have customary affirmative and negative covenants, including restrictions on our ability to incur additional indebtedness, incur liens, make investments, make restricted payments (including restrictions on the payment of dividends), make optional prepayments on junior financings, engage in transactions with affiliates and make asset sales, in each case subject to customary exceptions and baskets.
The Senior Secured Credit Facilities also have a customary uncommitted incremental facility of (i) the greater of $136.0 million or EBITDA for the prior four fiscal quarters plus (ii) additional amounts based on the Company’s net leverage ratio or interest coverage ratio plus (iii) certain specific additional amounts.
Term Loan Facility
Borrowings under the Term Loan Facility are due in full at maturity in April 2028. The Term Loan Facility bears interest at a variable rate equal to a reference rate plus a margin ranging from 2.50% to 3.75% based on loan type and our first lien net leverage ratio.
The Company is required to prepay the Term Loan Facility with a percentage of the Company’s annual excess cash flow if the first lien net leverage ratio is greater than or equal to 3.50 to 1.00. The Company is also required to prepay the Term Loan Facility with a percentage of the net cash proceeds of certain asset sales, subject to customary reinvestment provisions, when the first lien net leverage ratio is greater than or equal to 3.50 to 1.00. The Company is able to prepay amounts outstanding under the Term Loan Facility without a prepayment premium.
Revolving Credit Facility
The Revolving Credit Facility matures in April 2027. The maximum available amount under the Revolving Credit Facility is $125.0 million, with $60.0 million available for letters of credit and a swingline sublimit of $10.0 million. As of December 28, 2024, there were no advances on the Revolving Credit Facility, there were $1.2 million of letters of credit outstanding and $123.8 million was available to borrow.
The interest rate on revolver draws is variable at a rate equal to the reference rate plus a margin of 2.25% or 3.25% based on loan type. A 0.5% commitment fee is payable quarterly on the unused portion of the Revolving Credit Facility.
The Revolving Credit Facility is subject to a financial maintenance covenant that requires us to ensure the first lien net leverage ratio, which is tested quarterly, does not exceed 7.75 to 1.00. The financial maintenance covenant is only applicable if the aggregate amount of revolving loans, swingline loans and letters of credit outstanding under the Revolving Credit Facility (excluding up to $20 million of undrawn letters of credit and certain other amounts) exceeds 35% of the committed amount. The Revolving Credit Facility provides for customary equity cure rights.