Line of Credit |
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| Line of Credit |
9. Line of Credit
2023 ABL Credit and Guarantee Agreement - We maintain a $125.0 revolving credit facility, pursuant to an ABL Credit and Guarantee Agreement (the “2023 LOC Agreement”). 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 January 3, 2026, the SOFR Margin Rate was 1.50%. If the Alternate Base Rate (as defined in the 2023 LOC Agreement) is elected, the interest computation is equal to the Alternate Base Rate of the greatest of (a) the federal funds rate plus 0.50%, (b) the Adjusted Term SOFR Rate for a one month tenor plus 1.00%, or (c) the financial institution’s Prime Rate (as defined in the 2023 LOC Agreement), plus the Base Rate Margin (as defined in the 2023 LOC Agreement) of either 0.25%, 0.50%, or 0.75% (as of January 3, 2026, the Base Rate Margin was 0.25%). At the beginning of each quarter, the applicable margin is set and determined based on the average net availability on the line of credit for the previous quarter. As of January 3, 2026, the Adjusted Term SOFR interest rate for the facility was 5.42%. 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.
Amortization of approximately $0.3, $0.2 and $0.3 was recognized for the years ended January 3, 2026, December 28, 2024 and December 30, 2023, respectively. The unamortized portion of the fees, included in Other assets, as of January 3, 2026 and December 28, 2024, was approximately $0.6 and $0.9, respectively. There were no borrowings outstanding on the line of credit as of January 3, 2026 and December 28, 2024.
As of January 3, 2026, and December 28, 2024, our borrowing base capacity was $66.5 and $82.4, respectively.
As of January 3, 2026, and December 28, 2024, we maintained one letter of credit totaling approximately $0.4. The amount available on the revolving credit facility as of January 3, 2026 and December 28, 2024, was approximately $66.1, and $82.0, respectively.
10. Long-Term Debt
Long-term debt consists of the following for the periods presented:
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 “2024 Repricing Amendment”) to the First Lien Term Loan. The 2024 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 January 3, 2026 was 6.32%, which is a variable rate based on Adjusted Term SOFR and includes an applicable margin percentage of 2.50%. The 2024 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 2024 Repricing Amendment, that was deemed extinguished and recognized within “Loss on extinguishment and modification of debt” on the Consolidated Statement of Operations and Comprehensive Income. In conjunction with the 2024 Repricing Amendment, during the year ended December 28, 2024, we incurred $1.7 of costs from third parties that did not qualify for capitalization of deferred financing costs, and were expensed within “Loss on extinguishment and modification of debt” on the Consolidated Statement of Operations and Comprehensive Income.
During the year ended January 3, 2026, we made a voluntary prepayment of $40.0 on the 2024 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 approximately $2.3, $2.2, and $3.4 was recognized for the years ended January 3, 2026, December 28, 2024, and December 30, 2023 respectively, as a component of interest expense. These amounts are inclusive of the additional costs affiliated with voluntary prepayment of principal balances.
During the year ended January 3, 2026, the Company’s finance lease obligation primarily consists of vehicle lease agreements. The leases expire at various dates through 2029 with terms between and five years.
Aggregate annual maturities of long-term debt and finance leases at January 3, 2026, are:
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