Long-Term Debt |
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Jun. 26, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt | LONG-TERM DEBT Long-term debt was as follows:
Term Loan and Revolving Credit Facilities On April 23, 2026, the Company entered into the Tenth Amendment to its Credit Agreement, dated as of August 27, 2018 (as amended, the “Credit Agreement”), which increased the revolving credit facility from $150.0 million to $250.0 million and extended the maturity date from August 27, 2027 to April 23, 2031. The revolving credit facility bears interest at Term SOFR plus an applicable margin ranging from 1.25% to 1.75%, based on the Company's Consolidated Secured Net Leverage Ratio. The amended Credit Agreement requires the Company to maintain a maximum Consolidated Secured Net Leverage Ratio of 3.25 to 1.00 (or 3.75 to 1.00 for any reference period in which a Material Acquisition is consummated) and a minimum Cash Interest Coverage Ratio of 3.00 to 1.00. The Company incurred approximately $1.3 million in new debt issuance costs and had approximately $0.9 million of unamortized deferred issuance costs from the prior facility; of these amounts, approximately $1.9 million will be deferred and amortized over the new five-year term, while approximately $0.3 million was recognized as expense in the second quarter of fiscal 2026. As of June 26, 2026, total unamortized debt issuance costs related to the revolving credit facility were $1.9 million, which is included in other non-current assets in the accompanying condensed consolidated balance sheets. The Company pays a quarterly commitment fee in arrears on the average daily available commitment outstanding, at a rate ranging from 0.20% to 0.25% based on the Company's Consolidated Secured Net Leverage Ratio. Outstanding letters of credit and outstanding borrowings reduce the availability of the revolving credit facility. As of June 26, 2026, the Company had $230.9 million available under the revolving credit facility, net of $4.1 million of outstanding letters of credit and $15.0 million of outstanding borrowings. The letter of credit facility has an available commitment of $50.0 million and a maturity date of April 23, 2031. The Company pays a quarterly fee in arrears on the dollar equivalent of all outstanding letters of credit equal to the applicable margin for Term SOFR loans under the revolving credit facility, and a fronting fee equal to 0.125% per annum of the undrawn and unexpired amount of each letter of credit. As of June 26, 2026, the Company had $4.1 million of outstanding letters of credit and $45.9 million of available commitments remaining under the letter of credit facility. During the second quarter, the Company drew $15.0 million under the revolving credit facility, which remained outstanding as of June 26, 2026 and bore interest at a rate of 5.4%. As of June 26, 2026, the Company was in compliance with the financial covenants contained within the Credit Agreement. In addition, the Company maintains credit agreements with financial institutions in Czechia and in Israel, which provide for revolving credit facilities of up to 7.0 million euros (approximately $8.0 million) and $5.0 million, respectively. As of June 26, 2026, there were no borrowings outstanding under these facilities; however, $2.1 million of the Czechia facility was utilized for outstanding bank guarantees. As of June 26, 2026, the Company had $230.9 million, $5.9 million and $5.0 million available to draw from its credit facilities in the U.S., Czechia and Israel, respectively. During the quarter ended June 26, 2026, the Company prepaid the remaining $19.4 million outstanding under its term loan facility, retiring the facility in full. In connection with the prepayment, the Company wrote off $0.1 million of remaining unamortized debt issuance costs. Convertible Notes and Related Capped Call Transactions On March 3, 2026, the Company issued $600.0 million principal amount of 0% Convertible Senior Notes due 2031 (the “Convertible Notes”) in a private offering, which amount included the full exercise of the initial purchasers’ option to purchase an additional $75.0 million principal amount of the Convertible Notes. The Convertible Notes mature on March 15, 2031 and do not bear regular interest. The total net proceeds from the issuance of the Convertible Notes, after deducting initial purchasers’ discounts and commissions and estimated debt issuance costs, were approximately $583.3 million. Each $1,000 principal amount of the Convertible Notes is initially convertible into 11.80 shares of the Company’s common stock (the “Conversion Option”), which is equivalent to an initial conversion price of approximately $84.75 per share of common stock, subject to adjustment upon the occurrence of specified events. The initial conversion price represents a premium of approximately 42.5% to the $59.47 per share closing price of the Company’s common stock on February 26, 2026. The Convertible Notes are convertible at the option of the holders prior to the close of business on the business day immediately preceding December 16, 2030, only under the following conditions: (1) during any fiscal quarter (and only during such fiscal quarter) commencing after the fiscal quarter ending on June 26, 2026, if the last reported sale price per share of common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter; (2) during the 5 consecutive business days immediately after any 10 consecutive trading day period (the “Measurement Period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of common stock and the conversion rate on such trading day; (3) if the Company calls any Notes for redemption; or (4) upon the occurrence of specified distributions or corporate events. On or after December 16, 2030, holders may convert the Convertible Notes at any time until the close of business on the 2nd scheduled trading day immediately prior to the maturity date regardless of the foregoing conditions. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, in respect of the remainder, if any, of the conversion value in excess of the aggregate principal amount of the Convertible Notes being converted. If the Company undergoes a fundamental change (as defined in the indenture governing the Convertible Notes), subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their Notes, at a price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The Company has the right, at its election, to redeem all or any portion of the Convertible Notes on or after March 20, 2029 and on or before the 40th scheduled trading day immediately preceding the maturity date, at a price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if the Convertible Notes are freely tradable and the last reported sale price per share of common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding the redemption notice date. During any fiscal quarter commencing after June 26, 2026, if the last reported sale price of the Company’s common stock exceeds 130% of the initial conversion price for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter, the Convertible Notes are convertible at the option of the holders. There have been no changes to the initial conversion price of the Convertible Notes since issuance. The closing market price of the Company's common stock of $118.82 per share as of June 26, 2026 was higher than $110.17 per share, which represents 130% of the initial conversion price of $84.75 per share. However, the closing market price of the Company's common stock did not exceed $110.17 per share for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the quarter ended June 26, 2026. Accordingly, the Convertible Notes are not convertible at the option of the holders pursuant to this condition during the quarter ending September 25, 2026. The Convertible Notes are the Company’s senior unsecured obligations and rank equal in right of payment to any of the Company’s existing and future senior, unsecured indebtedness; senior to any of the Company’s existing and future indebtedness that is expressly subordinated to the Convertible Notes; effectively subordinated to any of the Company’s existing and future secured indebtedness to the extent of the value of the collateral securing that indebtedness; and structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and preferred equity, if any, of the Company’s subsidiaries. The net carrying amount of the Convertible Notes as of June 26, 2026 was as follows (in millions):
Interest expense related to the Convertible Notes for the three and six months ended June 26, 2026 was $0.8 million and $1.0 million, consisting of amortization of debt issuance costs. The Convertible Notes do not bear contractual interest. The debt issuance costs are amortized into interest expense over the term of the Convertible Notes at an effective interest rate of 0.6%. In connection with the issuance of the Convertible Notes, the Company entered into a privately negotiated capped call transactions (the “Capped Call”) with certain financial institutions. The Capped Call has an initial strike price of approximately $84.75, subject to certain adjustments, which corresponds to the initial conversion price of the Convertible Notes. The Capped Call has an initial cap price of $104.07 per share, subject to certain adjustments. The Capped Call is expected to partially offset the potential dilution to the Company’s common stock upon any conversion of the Convertible Notes, with such offset subject to a cap based on the cap price. The Capped Call is subject to adjustment upon the occurrence of specified extraordinary events affecting the Company, including merger events, tender offers, and announcement events. In addition, the Capped Call is subject to certain specified additional disruption events that may give rise to a termination of the Capped Call, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings, and hedging disruptions. The Capped Call meets the conditions under the related accounting guidance for equity classification and is recorded in Additional paid-in capital. The Capped Call will not be remeasured as long as it continues to meet the conditions for equity classification. The fair value of the Company’s long-term debt, which consists of a term loan facility and the Convertible Notes, is based on Level 2 inputs and was determined using quoted prices for the notes and similar instruments in inactive markets as of the last trading day of the reporting period. The Company’s long-term debt has been classified as Level 2 in the fair value hierarchy. As of June 26, 2026, the carrying value of the term loan approximates its fair value, and the estimated fair value of the Convertible Notes was $982.4 million.
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