v3.26.1
Financial Instruments
 3 Months Ended
Mar. 28, 2026
Debt Disclosure [Abstract]  
Financial Instruments Financial Instruments
Long-term debt consisted of the following as of:
2025 Credit AgreementMarch 28, 2026December 31, 2025
2025 Term Loan$274,250 $296,250 
Less:
Current portion of long-term debt(18,750)(15,000)
Unamortized debt issuance cost(539)(570)
Unamortized discount(1,635)(1,729)
$253,326 $278,951 
2025 Credit Agreement
On July 31, 2025, the Company entered into a Credit Agreement (the “2025 Credit Agreement”) with Wells Fargo Bank, National Association, and a syndicate of financial institutions and other entities (collectively, the “Lenders”). The 2025 Credit Agreement consists of a $300,000 term loan facility (the “2025 Term Loan”) and a $100,000 revolving credit facility (the “2025 Revolver” and, together with the 2025 Term Loan, the “2025 Term Loan Facilities”).
Proceeds from the 2025 Term Loan, borrowings of $30,000 under the 2025 Revolver, and $2,562 in available cash were used to repay the outstanding balance under the 2019 Credit and Guaranty Agreement, as amended, which totaled $332,562 as of July 31, 2025.
The Company evaluated the refinancing of the 2019 Credit and Guaranty Agreement on a creditor‑by‑creditor basis. Transactions with continuing lenders were recognized as modifications of existing debt. In relation to the new lender, the transaction was recognized as the issuance of new debt. The Company accounted for transactions with exiting lenders as debt extinguishments.
As a result of the 2025 Credit Agreement, the Company received cash proceeds of $28,125 from a new creditor and $5,078, net of repayments, from several continuing creditors. In connection with the termination of the 2019 Credit and Guaranty Agreement, the Company paid $65,765, primarily to exiting creditors, with a portion paid to a continuing creditor that was partially extinguished. The Company recorded an original issue discount of $1,296 related to the 2025 Credit Agreement, which was capitalized within the consolidated condensed balance sheets. These capitalized discounts are amortized as interest expense, net, on a straight-line basis over the term of the 2025 Term Loan Facilities, which approximates the effective interest method. The majority of the capitalized discounts originated from loans with continuing creditors.
As of March 28, 2026, the outstanding balance on the 2025 Term Loan was $272,076, net of discount of $1,635 and deferred financing costs of $539. These amounts include portions of the original issue discounts and deferred financing costs attributable to returning Lenders from the 2019 Credit and Guaranty Agreement. Interest expense, net includes deferred cost amortization of $163 and $381 for the three months ended March 28, 2026 and March 29, 2025, respectively. The effective interest rate on the 2025 Term Loan was 5.67% as of March 28, 2026.
The 2025 Term Loan and 2025 Revolver mature on July 31, 2030 (“Maturity”). On March 27, 2026, the Company made a discretionary prepayment of $22,000 on the 2025 Term Loan that reduced the final payment due at Maturity. The remaining scheduled principal payments for the 2025 Term Loan as of March 28, 2026 are as follows:
Period
Scheduled Quarterly Payments(a)
Annually
20263,750 15,000 
20273,750 15,000 
20283,750 15,000 
20293,750 15,000 
20303,750 7,500 
2030 - Final payment at Maturity— 206,750 
(a)Scheduled quarterly payments occur on March 31, June 30, September 30, and December 31 of each year.
The estimated fair value of the 2025 Term Loan, using the midpoint of the Bloomberg Valuation, was $261,566 as of March 28, 2026. This is classified as a Level 2 instrument within the fair value hierarchy.
Interest - 2025 Credit Agreement
The 2025 Term Loan and the 2025 Revolver permit the Company to elect either the Secured Overnight Financing Rate (“SOFR”) or the Base Rate (“BR”) option for all or portions of the borrowings. Both rate options are calculated using a base interest rate plus a margin, which is determined based on the Company’s leverage ratio, which is the ratio of consolidated net indebtedness to consolidated EBITDA, as specified in the 2025 Credit Agreement.
BR borrowings accrue interest based on the Federal Funds Rate plus 0.50%, with interest payments due on the last day of each calendar quarter. SOFR borrowings accrue interest over a designated interest period (“Interest Period”) of one, three or six months at the Company’s discretion. Interest is payable on the last day of each Interest Period, or every three months for Interest Periods longer than three months. The applicable interest margins under the 2025 Credit Agreement are 2.50% and 1.50% for SOFR and BR loans, respectively.
The applicable interest margin is subject to adjustment based on a pricing grid, which reflects changes in the Company’s leverage ratio following delivery of quarterly financial statements to the Lenders:
Leverage ratioSOFRBRCommitment Fee
< 2.00 to 1.00
1.75 %0.75 %0.20 %
≥ 2.00 to 1.00 < 2.50 to 1.00
2.00 %1.00 %0.20 %
≥ 2.50 to 1.00 < 3.00 to 1.00
2.25 %1.25 %0.30 %
≥ 3.00 to 1.00 < 3.50 to 1.00
2.50 %1.50 %0.30 %
≥ 3.50 to 1.00
2.75 %1.75 %0.30 %
2025 Revolver and Letters of Credit
The five-year 2025 Revolver includes an initial annual commitment fee of 0.30%, calculated on the average daily amount of the unused revolving commitment, inclusive of revolving loans, swingline loans, and letters of credit (“LOC”). The commitment fee is payable quarterly in arrears on the last day of each calendar quarter and at Maturity. The commitment fee rate is subject to adjustment based on the Company’s leverage ratio. Swingline loans are available as BR option loans and total LOC availability is limited to $7,500 under the 2025 Credit Agreement.
As of March 28, 2026, the Company had three LOCs outstanding, reducing LOC capacity to approximately $5,893. All outstanding LOCs incur fees equal to the interest margin for SOFR based loans under the 2025 Revolver, applied to the undrawn and unexpired amount of each LOC. These LOC fees are payable quarterly in arrears. As of December 31, 2025, the Company had $100,000 available under the 2025 Revolver, excluding the effect of outstanding LOCs.
Covenants - 2025 Credit Agreement
The 2025 Credit Agreement contains affirmative and negative covenants applicable to senior secured credit facilities, including covenants that, among other things, limit or restrict the ability of the Company to, subject to negotiated exceptions, incur additional indebtedness, liens on its assets, engage in acquisitions or dispositions, pay dividends or make other distributions, enter into transactions with affiliated persons, make investments, change the nature of its business or organizational documents, or prepay or make modifications to other indebtedness that would adversely affect the Lenders.
The 2025 Credit Agreement also contains financial covenants including a maximum consolidated total net leverage quarterly ratio of 3.50 to 1.00. The Company may elect to increase such ratio level by 0.50 to 1.00 following certain permitted acquisitions. A minimum interest coverage ratio of 2.50 to 1.00 must also be maintained. The 2025 Revolver also includes standard provisions related to conditions of borrowing and customary events of default. The Company does not expect any of these covenants or restrictions to affect or limit its ability to conduct business in the ordinary course.
The Company was in compliance with the financial covenants under the 2025 Credit Agreement as of March 28, 2026.
Interest Rate Swaps
The Company uses two interest rate swaps to mitigate the interest rate risk associated with its floating-rate SOFR-based borrowings under the 2025 Credit Agreement. Under the terms of the swaps, the Company pays a fixed interest rate in exchange for SOFR-based variable interest throughout the life of the instruments, the majority of which expire July 31, 2028. The interest rate swaps have a weighted average fixed interest rate of 3.60% and an aggregate notional value of $150,000, or 50.0% of the initial 2025 Term Loan. Refer to Note 5. Fair Value Measurements for additional information regarding the valuation of the interest rate swaps.