DEBT |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 02, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEBT | DEBT Senior Secured Credit Facilities First Lien Credit Agreement On May 29, 2026, the First Lien Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $868.5 million (the New Term Loans), in which the New Term Loans replaced or refinanced in full all the existing term loans outstanding under the First Lien Term Tranche in effect immediately prior to the amendment (the Existing Term Loans). The loans under the First Lien Credit Agreement, as amended (the First Lien Credit Agreement), amortize in an amount equal to approximately $2.2 million per quarter through September 30, 2030, with the balance of $829.4 million due on December 6, 2030. The replacement of the Existing Term Loans with the New Term Loans resulted in a loss on extinguishment of debt of $1.7 million in the Condensed Consolidated Statements of Income for the nine months ended October 2, 2026. On January 2, 2025, the First Lien Credit Agreement was amended to provide, among other things, a new tranche of term loans to replace or refinance in full all the existing term loans outstanding under the First Lien Term Tranche, resulting in a loss on extinguishment of debt of $2.2 million in the Condensed Consolidated Statements of Income for the nine months ended September 26, 2025. V2X LLC (V2X Borrower)'s obligations under the First Lien Credit Agreement are guaranteed by V2X Intermediate LLC and V2X Borrower’s wholly-owned domestic subsidiaries (collectively, the Guarantors), subject to customary exceptions and limitations. The V2X Borrower’s obligations under the First Lien Credit Agreement and the Guarantors’ obligations under the related guarantees are secured by a first priority lien on substantially all the V2X Borrower’s and the Guarantors’ assets which exists on a pari passu basis with the lien held by the 2023 Credit Agreement (as defined below) lenders. The borrowings under the First Lien Credit Agreement bear interest at rates that, at the V2X Borrower’s option, can be either a base rate, determined by reference to the greater of (a) (i) the federal funds rate plus 0.50%, (ii) the prime lending rate, and (iii) an adjusted Secured Overnight Financing Rate (SOFR) rate plus 1.00%, plus a margin of 1.00% per annum, or (b) SOFR, plus a margin of 2.00% per annum. As of October 2, 2026, the effective interest rate for the First Lien Credit Agreement was 6.44%. The First Lien Credit Agreement contains customary representations and warranties and affirmative covenants. The First Lien Credit Agreement also includes negative covenants that limit, among other things, the incurrence of additional indebtedness and additional liens, certain sales of assets, dividends, investments and advances, prepayments of debt and certain mergers and acquisitions. The First Lien Credit Agreement contains customary events of default, including, but not limited to, payment defaults, material breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the First Lien Credit Agreement to be in full force and effect, and changes of control without lender consent. If an event of default occurs and is continuing, the V2X Borrower may be required immediately to repay all amounts outstanding under the First Lien Credit Agreement. As of October 2, 2026, the carrying value of the First Lien Credit Agreement was $864.2 million, excluding deferred discount and unamortized deferred financing costs of $19.7 million. The estimated fair value of the First Lien Credit Agreement as of October 2, 2026, was $863.1 million. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2). 2023 Credit Agreement On February 28, 2023, the V2X Borrower entered into a credit agreement (the 2023 Credit Agreement) among the lenders identified therein and Bank of America, N.A., as administrative agent, collateral agent, swingline lender and letter of credit issuer. The 2023 Credit Agreement provides for $750.0 million in senior secured financing, with a first lien on substantially all the V2X Borrower’s assets and consists of (a) a $500.0 million five-year revolving credit facility (the 2023 Revolver) (which includes (i) a $50.0 million sublimit of availability for letters of credit, and (ii) a $50.0 million sublimit for short-term borrowings on a swingline basis) and (b) a five-year $250.0 million term loan (the 2023 Term Loan). On March 31, 2025, the 2023 Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $237.5 million (the 2025 Term Loans), which replaced or refinanced in full all the existing term loans outstanding under the 2023 Credit Agreement in effect immediately prior to the amendment. The 2023 Credit Agreement was further amended to provide a new tranche of revolving credit commitments in an aggregate original principal amount of $500.0 million (the 2025 Revolver), which replaced or refinanced in full all the existing revolving credit loans and commitments outstanding under the 2023 Revolver in effect immediately prior to the amendment. The 2025 Term Loans amortize at approximately $1.5 million per quarter for the fiscal quarters ending June 30, 2025 through March 31, 2027, increasing to $3.0 million per quarter for the fiscal quarters ending June 30, 2027, through December 31, 2029, with the balance of $173.0 million due on March 31, 2030. The amendment to the 2023 Credit Agreement resulted in a loss on extinguishment of debt of $0.3 million in the Condensed Consolidated Statements of Income for the nine months ended September 26, 2025. The V2X Borrower’s obligations under the 2023 Credit Agreement are guaranteed by the Guarantors, subject to customary exceptions and limitations. The V2X Borrower’s obligations under the 2023 Credit Agreement and the Guarantors’ obligations under the related guarantees are secured by a first priority lien on substantially all of the V2X Borrower’s and the Guarantors’ assets (subject to customary exceptions and limitations) which exists on a pari passu basis with the lien held by the First Lien Credit Agreement lenders. The borrowings under the 2023 Credit Agreement bear interest at rates that, at the V2X Borrower’s option, can be either a base rate, determined by reference to the greater of (a) (i) the federal funds rate plus 0.50%, (ii) the prime lending rate, and (iii) an adjusted SOFR rate plus 1.00%, plus a margin of 0.50% to 1.50% per annum, or (b) SOFR, plus a margin of 1.50% to 2.50% per annum, in each case, depending on the consolidated total net leverage ratio of the V2X Borrower and its subsidiaries. As of October 2, 2026, the effective interest rate for the 2025 Term Loans was 5.84%. Unutilized commitments under the 2025 Revolver are subject to a per annum fee ranging from 0.25% to 0.375% depending on the consolidated total net leverage ratio of the V2X Borrower and its subsidiaries. The V2X Borrower is also required to pay a letter of credit fronting fee to each letter of credit issuer equal to 0.125% per annum of the amount available to be drawn under each such letter of credit (or such other amount as may be mutually agreed by the V2X Borrower and the applicable letter of credit issuer), as well as a fee to all lenders equal to the applicable margin to SOFR of revolving credit loans times the average daily amount available to be drawn under all outstanding letters of credit. The 2023 Credit Agreement contains customary representations and warranties, which must be accurate for the V2X Borrower to borrow under the 2023 Credit Agreement, and affirmative covenants. The 2023 Credit Agreement also includes customary negative covenants that limit, among other things, the incurrence of additional indebtedness, and additional liens, transactions with affiliates, sales of assets, dividends, investments and advances, prepayments of debt, and certain mergers and acquisitions. The 2023 Credit Agreement contains financial covenants requiring (a) the consolidated total net leverage ratio not to exceed 4.75 to 1.00 for the reporting periods ending on or prior to December 31, 2026, with further step downs thereafter, and (b) the consolidated interest coverage ratio be at least 2.00 to 1.00, which commenced with the reporting period ended on June 30, 2023. The 2023 Credit Agreement contains customary events of default, including, but not limited to, payment defaults, material breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the 2023 Credit Agreement to be in full force and effect, and changes of control without the lender's consent. If an event of default occurs and is continuing, the V2X Borrower may be required immediately to repay all amounts outstanding under the 2023 Credit Agreement. As of October 2, 2026, there were no outstanding borrowings and $15.3 million of outstanding letters of credit under the 2025 Revolver. The Company had available borrowing capacity under the 2025 Revolver of $484.7 million as of October 2, 2026. Unamortized deferred financing costs related to the 2025 Revolver of $3.3 million are included in other non-current assets in the Condensed Consolidated Balance Sheets. As of October 2, 2026, the fair value of the 2025 Revolver approximated the carrying value because the debt bears a floating interest rate. As of October 2, 2026, the carrying value of the 2025 Term Loans was $208.6 million, excluding unamortized deferred financing costs of $1.4 million. The estimated fair value of the 2025 Term Loans as of October 2, 2026, was $208.9 million. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2). The aggregate scheduled maturities under the First Lien Credit Agreement and 2023 Credit Agreement as of October 2, 2026, are as follows:
As of October 2, 2026, the Company was in compliance with all covenants related to the First Lien Credit Agreement and the 2023 Credit Agreement.
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