v3.26.1
Debt
 3 Months Ended
Apr. 04, 2026
Debt Disclosure [Abstract]  
Debt
(8)
Debt

Debt is comprised of the following (in thousands):

 

 

 

Interest Rates
at April 4, 2026

 

April 4,
2026

 

 

December 31,
2025

 

Outstanding Debt:

 

 

 

 

 

 

 

 

Revolving Credit Facility (1)

 

5.51%

 

$

213,878

 

 

$

217,380

 

CTL Financing (2)

 

 

 

 

189,352

 

 

 

193,324

 

Equipment Financing (3)

 

2.50% to 7.31%

 

 

268,904

 

 

 

286,317

 

Real Estate Facility (4)

 

5.78%

 

 

82,566

 

 

 

105,260

 

Unamortized debt issuance costs

 

 

 

 

(4,399

)

 

 

(4,710

)

 

 

 

 

 

750,301

 

 

 

797,571

 

Less current portion of long-term debt

 

 

 

 

115,975

 

 

 

114,850

 

Total long-term debt, net of current portion

 

 

 

$

634,326

 

 

$

682,721

 

(1) Our Revolving Credit Facility provides us with a revolving credit commitment of up to $500 million. We may borrow under the Revolving Credit Facility until maturity on September 30, 2027, and this indebtedness bears interest at index-adjusted SOFR, or a base rate, plus an applicable margin based on the Company’s leverage ratio. The Revolving Credit Facility is secured by a first-priority pledge of the capital stock of applicable subsidiaries, as well as first-priority perfected security interests in cash, deposits, accounts receivable, and selected other assets of the applicable borrowers. The Revolving Credit Facility includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayments provisions. At April 4, 2026, we were in compliance with all covenants under the facility, and $286.1 million was available for borrowing on the revolver.

(8)
Debt – continued

(2) In October 2025, we completed a credit tenant lease (“CTL”) financing transaction by issuing a senior secured promissory note in the principal amount of $195.9 million. We used the net proceeds of the CTL financing to repay existing indebtedness. The note bears interest at a fixed rate of 6.84% per annum and matures on November 15, 2034. The note is secured primarily by our interests under a long-term composite sublease agreement. The CTL debt is generally non-recourse to the Company and its subsidiaries, except for customary limited-recourse obligations under indemnity and guaranty agreements relating to environmental matters, lease-term compliance, and certain representations, warranties, and covenants. At April 4, 2026, we were in compliance with all covenants under the note.

(3) Our Equipment Financing consists of a series of promissory notes issued by wholly owned subsidiaries. The equipment notes are secured by liens on specific titled vehicles and operating equipment. The notes are generally payable in monthly installments over terms of approximately 60 months and bear interest at fixed rates ranging from 2.50% to 7.31%. One equipment note is payable over a 72-month term and bears interest at Term SOFR plus an applicable margin of 2.25%.

(4) Our Real Estate Facility consists of a $165.4 million term loan that matures on April 29, 2032. Obligations under the facility are secured by first-priority mortgages on specified parcels of real estate owned by the Company, including related land, buildings and improvements, together with first-priority assignments of rents and related leases of the loan parties. The credit agreement includes customary affirmative and negative covenants, including financial covenants relating to leverage and fixed charge coverage. Principal and interest are payable monthly based on an annual amortization rate of 10%. The facility bears interest at Term SOFR plus an applicable margin of 2.12%. At April 4, 2026, we were in compliance with all covenants under the facility.

The Company is also party to an interest rate swap agreement that qualifies for hedge accounting. The Company executed the swap agreement to fix a portion of the interest rate on its variable rate debt. Under the swap agreement, the Company receives interest at Term SOFR and pays a fixed rate of 2.88%. The swap agreement has an effective date of April 29, 2022, a maturity date of April 30, 2027, and an amortizing notional amount of $60.8 million. At April 4, 2026, the fair value of the swap agreement was an asset of $0.5 million, which is included in other assets on the Consolidated Balance Sheets. Because the swap agreement qualifies for hedge accounting, changes in fair value are recorded in other comprehensive income (loss), net of tax. See Note 9 for additional information pertaining to interest rate swaps.