Quarterly report [Sections 13 or 15(d)]

Line of Credit

v3.25.2
Line of Credit
 6 Months Ended
Jun. 28, 2025
Debt Disclosure [Abstract]  
Line of Credit Line of Credit
2023 ABL Credit and Guarantee Agreement - On August 3, 2023, we refinanced the revolving credit facility, pursuant to a new ABL Credit and Guarantee Agreement (the “2023 LOC Agreement”). The 2023 LOC Agreement, among other things, (i) increased the previous aggregate commitments from $80.0 to $125.0, subject to eligible collateral, (ii) updated the manner in which the previous borrowing base under the 2023 LOC Agreement was determined, and (iii) replaced the administrative agent with a new administrative agent. Interest payments with respect to the 2023 LOC Agreement are due in arrears. The maturity date is August 3, 2028.
The interest rate on the facility is based on a base rate, unless we choose an Adjusted Term SOFR Rate (as defined in the 2023 LOC Agreement). If the Adjusted Term SOFR Rate is elected, the interest rate is equal to the Adjusted Term SOFR Rate, which includes a 10 basis points flat CSA, plus the SOFR Margin (as defined in the 2023 LOC Agreement) of either 1.25%, 1.50%, or 1.75%, based on the Average Excess Availability (as defined in the 2023 LOC Agreement). As of June 28, 2025, the SOFR Margin Rate was 1.50%. As of June 28, 2025 and December 28, 2024, the interest rate in effect for the facility was 5.88% and 5.92%, respectively. The line of credit is collateralized by accounts receivable and inventories. We accrue an unused commitment fee to the administrative agent at the varying rate of 0.25% to 0.38%, based on the unused portion of the maximum commitment, as defined in the 2023 LOC Agreement.
We incurred $1.3 of debt issuance costs, which were capitalized and are being amortized over the term of the facility that expires on August 3, 2028, using the straight-line method, and are presented as part of other assets within our Unaudited Condensed Consolidated Balance Sheet. The amortization of the deferred loan costs is included in interest expense, net on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.
Amortization of approximately $0.1 was recognized for both three month periods ended June 28, 2025 and June 29, 2024. The unamortized portion of the fees as of June 28, 2025 and December 28, 2024, was approximately $0.8 and $0.9, respectively. There were no borrowings outstanding on the line of credit as of June 28, 2025 and December 28, 2024.
As of June 28, 2025 and December 28, 2024, we maintained one letter of credit totaling approximately $0.4 on which there were no balances due. As of June 28, 2025 and December 28, 2024, our borrowing base capacity was approximately $70.7 and $82.4, respectively.
Long-Term Debt
Long-term debt consists of the following for the periods presented:
(dollar amounts in millions)
 June 28, 2025 December 28, 2024
Note payable - First Lien
$ 555.5  $ 598.5 
Financing leases
 3.6  3.4 
$ 559.1  $ 601.9 
Less: unamortized deferred finance fees
 8.4  9.9 
Less: current maturities
 7.5  8.8 
Total long-term debt
 $ 543.2  $ 583.2 

Notes Payable - First Lien - As a result of a credit rating upgrade in March 2024, the First Lien term loan allowed the previous applicable margin rate to decrease from 3.25% to 3.00%. On April 18, 2024, we made a voluntary prepayment of $21.9 toward the First Lien Credit and Guarantee Agreement, dated as of February 12, 2018 (as amended to date, the “First Lien Term Loan”).
On April 30, 2024, we completed a repricing pursuant to Amendment No. 7 (the “Repricing Amendment”) to the First Lien Term Loan. The Repricing Amendment reduced the applicable interest rate margins on the $600.0 First Lien Term Loan from 2.00% to 1.50% for the term loans bearing interest at rates based on the base rate, and from 3.00% to 2.50% for the term loans bearing interest at rates based on the secured overnight financing rate. In addition to the change in the applicable margin rate, we are no longer subject to a CSA rate of 0.10%. Interest is payable in arrears (with respect to Base Rate loans) or at the end of an interest period selected by us (with respect to SOFR loans). The outstanding loan balance is to be repaid on a quarterly basis in an amount equal to 0.25% of the original balance of the amended loan, with the remaining principal due on the maturity date of August 3, 2030. The debt was secured by substantially all of our business assets. There are no prepayment penalties if we make voluntary prepayments on the outstanding principal balance. The interest rate on the First Lien Term Loan as of June 28, 2025 was 6.78%, which is a variable rate based on Adjusted Term SOFR and includes an applicable margin percentage of 2.50%. The Repricing Amendment was accounted for in accordance with ASC 470-50, Debt - “Modification and Extinguishment”. The First Lien Term Loan consists of a syndicate of lenders which were evaluated, for accounting purposes, as individual lenders. Certain lenders exited the Term Loan credit facility, which resulted in extinguishment accounting.
As a result, we wrote off an immaterial portion of unamortized debt financing costs associated with the First Lien Term Loan prior to the Repricing Agreement, that was deemed extinguished and recognized within “Loss on extinguishment and modification of debt” on the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income. In conjunction with the Repricing Amendment, during the three and six month periods ended June 29, 2024, we incurred $1.7 of costs from third parties that did not qualify for capitalization of deferred finance costs, and were expensed within “Loss on extinguishment and modification of debt” on the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income.
During the six months ended June 28, 2025, we made a voluntary prepayment of $40.0 on the Repricing Amendment. We used cash on hand to make the voluntary prepayment. As a result of the prepayment, we expensed an additional $0.6 of the unamortized debt issuance costs that were being amortized over the expected life of the borrowing.
Amortization of deferred loan costs is included in interest expense on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. Amortization of approximately $0.4 and $1.5 was recognized for the three and six month periods ended June 28, 2025, respectively, as a component of interest expense. Amortization of approximately $0.9 and $1.3 was recognized for the three and six month periods ended June 29, 2024, respectively, as a component of interest expense. These amounts are inclusive of the additional costs affiliated with voluntary prepayment of principal balances.