Credit Agreement

9 Months Ended

Sep. 28, 2024

Debt Disclosure [Abstract]

Credit Agreement

Credit Agreement

As of September 28, 2024, the Company’s credit facility had a total commitment amount of $680 million. The credit

facility is for general corporate purposes and to meet seasonal working capital requirements. The Amended and

Restated Credit and Security Agreement, dated February 14, 2018, among the Company, U.S. Bank National Association

and the several banks and other financial institutions from time to time party thereto (as amended, the Credit

Agreement), includes an accordion feature which allows the Company to increase the amount of the credit facility from

$680 million to $1.0 billion, subject to lenders’ approval. The Credit Agreement provides the lenders with a collateral

security interest in substantially all of the Company’s assets and those of its subsidiaries and requires the Company to

comply with, among other things, a maximum net leverage ratio and a minimum interest coverage ratio.

The maximum net leverage ratio permitted by the Credit Agreement is 5.00 to 1.00 for the quarterly period ended

September 28, 2024; 4.80 to 1.00 for the quarterly reporting period ending December 28, 2024; and 4.00 to 1.00 for

each quarterly reporting period occurring thereafter until maturity.

The minimum interest coverage ratio permitted by the Credit Agreement is 1.50 to 1.00 for both quarterly reporting

periods ending September 28, 2024 and December 28, 2024; and 3.00 to 1.00 for each quarterly reporting period

occurring thereafter until maturity.

The carrying amount of the outstanding borrowings under the Credit Agreement approximates fair value because

interest rates approximate the current rates available to the Company. Under the terms of the Credit Agreement, the

Company pays a variable rate of interest and a commitment fee based on its leverage ratio. The Credit Agreement

matures in December 2026. The Company was in compliance with all financial covenants as of September 28, 2024.

The following table summarizes the Company’s borrowings under the credit facility ($ in thousands):

	September 28, 2024	December 30, 2023
Outstanding borrowings	$516,500	$539,500
Outstanding letters of credit	$7,147	$7,147
Additional borrowing capacity	$156,353	$138,353
Weighted-average interest rate	8.2%	8.5%