Long-Term Obligations |
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Jul. 04, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Obligations | 5. LONG-TERM OBLIGATIONS Long-term obligations consisted of the following as of July 4, 2026 and January 3, 2026, respectively (dollar amounts in thousands):
On May 26, 2026, Aveanna Healthcare LLC (the “Borrower”), a wholly owned subsidiary of the Company, entered into the thirteenth amendment (the "Amendment") to its First Lien Credit Agreement, dated as of March 16, 2017 (as further amended, supplemented, or otherwise modified from time to time, the "Existing Credit Agreement"), which constituted a repricing of the facilities under the Existing Credit Agreement resulting in a 0.50% reduction to applicable interest rate margins (the Existing Credit Agreement, as amended by the Amendment, the "Credit Agreement"). Pursuant to the Amendment, the outstanding senior secured term loans under the Existing Credit Agreement were refinanced with new senior secured term loans in an aggregate principal amount of $1.3 billion (the “2026 Term Loans”) and the existing $250.0 million senior secured revolving credit facility was refinanced with a new $250.0 million senior secured revolving credit facility (the “2026 Refinancing Revolving Credit Facility” and, together with the 2026 Term Loans, the “2026 Facilities”). On May 28, 2026, based on certain terms of the Amendment, and as the result of a favorable credit agency rating improvement, the applicable interest rate margins were decreased by an additional 0.25%.
In accordance with ASC 470-50-40, Debt Modification and Extinguishments, the Amendment related to the 2026 Facilities was accounted for as a modification of debt, as lenders in the 2026 Facilities did not change. Third party fees were recorded as debt modification expense of $1.5 million and included in Corporate expenses on the consolidated statements of operations for both the three and six-month periods ended July 4, 2026.
As a result of the repricing above, as of July 4, 2026, the 2026 Term Loans under the Credit Agreement bear interest at a rate equal to, at the election of the Borrower, Term SOFR (as defined in the Credit Agreement) plus an applicable margin equal to 3.00% per annum or an alternative base rate ("ABR") plus an applicable margin equal to 2.00% per annum. Loans under the 2026 Refinancing Revolving Credit Facility bear interest at a rate equal to, at the election of the Borrower, Term SOFR, plus an applicable margin equal to 3.00% per annum or a base rate plus an applicable margin equal to 2.00% per annum, so long as the Consolidated First Lien Net Leverage Ratio (as defined in the Credit Agreement) is greater than 3.90 to 1.00 as of the last day of the preceding fiscal quarter, subject to (a) a decrease of 0.25% in the event that, and for so long as, the Consolidated First Lien Net Leverage Ratio is less than or equal to 3.90 to 1.00 and greater than 3.40 to 1.00 as of the last day of the preceding fiscal quarter and (b) a decrease of 0.50% in the event that, and for so long as, the Consolidated First Lien Net Leverage Ratio is less than or equal to 3.40 to 1.00 as of the last day of the preceding fiscal quarter. As of July 4, 2026, the principal amount of the 2026 Term Loans and borrowings under the 2026 Refinancing Revolving Credit Facility each accrued interest at a rate of 6.64%. Debt issuance costs related to the term loans are recorded as a direct deduction from the carrying amount of the debt. The balances for debt issuance costs related to the term loans as of July 4, 2026 and January 3, 2026 were $20.5 million and $21.8 million, respectively. Debt issuance costs related to the 2026 Refinancing Revolving Credit Facility are recorded within other long-term assets. The balances for debt issuance costs related to the 2026 Refinancing Revolving Credit Facility as of July 4, 2026 and January 3, 2026 were $2.9 million and $3.2 million, respectively. The Company recognized interest expense related to the amortization of debt issuance costs of $0.8 million and $1.6 million for the three and six-month periods ended July 4, 2026, respectively, and $1.5 million and $3.1 million for the three and six-month periods ended June 28, 2025, respectively. Issued letters of credit as of July 4, 2026 and January 3, 2026 were both $24.5 million. There were no swingline loans outstanding as of July 4, 2026 or January 3, 2026. Borrowing capacity under the Company's 2026 Refinancing Revolving Credit Facility was approximately $225.5 million as of July 4, 2026. Available borrowing capacity under the 2026 Refinancing Revolving Credit Facility is subject to a maintenance leverage covenant that becomes effective if more than 40% of the total commitment is utilized. The fair value of the Company's long-term obligations was estimated using market-observable inputs from the Company’s comparable peers with public debt, including quoted prices in active markets, which are considered Level 2 inputs. The aggregate fair value of the Company's long-term obligations was $1,323.3 million at July 4, 2026. The Company was in compliance with all financial covenants and restrictions under the foregoing instruments at July 4, 2026. |
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