Long-Term Debt |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt |
Note 6 – Long-Term Debt Long-term debt consists of the following (in thousands):
Interest expense for the Company’s debt arrangements, excluding the amortization of debt issuance costs and other discounts and fees, was $8.9 million and $2.0 million for the three periods ended March 30, 2025 and the three months ended March 31, 2024, respectively. Capitalized interest was $0.6 million and $0.3 million for the three periods ended March 30, 2025 and the three months ended March 31, 2024, respectively. As of March 30, 2025, the Company had $6.4 million in standby letters of credit outstanding for certain restaurants and $33.6 million available in its revolving credit facility, subject to certain conditions. Credit and Guaranty Agreement In connection with the Benihana Acquisition, on May 1, 2024, the Company entered into a credit agreement (the “Credit Agreement”) with Deutsche Bank AG New York Branch, Deutsche Bank Securities Inc., HPS Investment Partners, LLC and HG Vora Capital Management, LLC (collectively, the “Lenders”). The Credit Agreement provides a $350.0 million senior secured term loan facility (the “Term Loan Facility”) and a $40.0 million senior secured revolving credit facility (the “Revolving Facility”, and together with the Term Loan Facility, the “Facilities”), which allows for up to $10.0 million of which to be available in the form of letters of credit. On May 1, 2024, the Company borrowed $350.0 million under the Term Loan Facility and the Revolving Facility was and remains undrawn. The Term Loan Facility is not subject to a financial covenant and the Revolving Facility’s financial covenant will apply only after 35% of the Revolving Facility’s capacity has been drawn. The Term Loan Facility bears interest at a margin over a reference rate selected at the option of the borrower. The margin for the Term Loan Facility is 6.5% per annum for SOFR borrowings and 5.5% per annum for base rate borrowings. The Term Loan Facility matures on the fifth anniversary of the date of the related loan agreement. The Term Loan Facility is payable in quarterly installments commencing with the fiscal quarter ending September 30, 2024, and are 1% per annum for the first year (through June 30, 2025), then 2.5% per annum for the next two years (through June 2027), then 5% per annum thereafter through maturity on April 30, 2029. The Revolving Facility bears interest at a margin over a reference rate selected at the option of the borrower. The margin for the Revolving Facility is set quarterly based on the Company’s Consolidated Net Leverage Ratio for the preceding four fiscal quarters and ranges from 5.5% to 6.0% per annum for SOFR borrowings and 4.5% to 5.0% for base rate borrowings. The Revolving Facility matures on November 1, 2028. The Company’s weighted average interest rate on the borrowings under the Credit Agreement as of March 30, 2025 and December 31, 2024 was 10.79% and 11.09%, respectively. As of March 30, 2025, the Company had $0.5 million of debt issuance costs and $12.7 million of debt original issuance discount related to the Credit Agreement, which were capitalized and are recorded as a direct deduction to long-term debt and less than $0.1 million in debt issuance costs and $1.4 million of debt original issuance discount recorded in Other Assets on the condensed consolidated balance sheets. |
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