9.FINANCING ARRANGEMENTS

On June 2, 2016, we entered into a new first lien term loan in the aggregate amount of $1,300,000, which matures on June 2, 2023 (the “2016 First Lien Term Loan”). On the same date, we also entered into an amendment to our revolving credit facility (referred to as our asset based facility or ABL Facility), which extended its maturity date to June 2, 2021. We refer to the 2016 First Lien Term Loan together with the ABL Facility as our credit facilities. The net proceeds from the 2016 First Lien Term Loan of $1,293,500 (which is net of original issue discount of $6,500), were used to repay our 2012 First Lien Term Loan, our 2012 Second Lien Term Loan (collectively, the “ Prior Term Loans”), pay related accrued interest of $11,990, pay a prepayment penalty of $3,735 and loan origination fees of $15,449. We retained proceeds of $3,619 for working capital and other purposes.

Debt at July 2, 2016 and January 2, 2016 consisted of the following:

	July 2,			January 2,
	2016			2016
2016 First Lien Term Loan, with floating interest rates, maturing June 2, 2023, net of original issue discount of $9,003	$	1,240,997		$	—
2016 First Lien Term Loan, held by related party, net of original issue discount of $360	49,640			—
2012 First Lien Term Loan, net of original issue discount of $2,399	—			894,851
2012 Second Lien Term Loan, net of original issue discount of $2,438	—			340,562
2012 Second Lien Term Loan, held by related party, net of original issue discount of $228	—			31,772
Revolving line of credit, maximum borrowings of $175,000 with floating interest rates, maturing June 2, 2021	183			—
Loan origination fees	(12,131		)	(11,071		)
Capitalized lease obligations maturing through fiscal 2018	565			861
Insurance premium financing	—			1,583

Total debt	$	1,279,254		$	1,258,558
Less: current maturities	$	(13,482	)	$	(24,721	)

	$	1,265,772		$	1,233,837

The original issue amount, in aggregate, for the Prior Term Loans was $1,300,000 ($925,000 and $375,000 for the 2012 First Lien Term Loan and the 2012 Second Lien Term Loan, respectively). The financing of the 2016 First Lien Term Loan and the repayment of the Prior Term Loans were accounted for pursuant to ASC 470-50, Debt - Modification and Extinguishments (ASC 470-50). Accordingly, we recognized $825 and $1,336 in interest expense related to the write off of the original issue discount and a portion of the unamortized deferred financing fees, respectively, that were associated with the Prior Term Loans. Fees paid of $15,449 were assessed under ASC 470-50, to be expensed or capitalized and amortized over the lives of the new loans. Of the new fees incurred, $11,896 were expensed and $3,553 were capitalized. Fees expensed are recognized in “Other debt issuance costs” in our unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. Fees capitalized of $2,896 related to the 2016 First Lien Term Loan are recognized in “Long-term debt, net of current maturities” and $657 related to the ABL Facility are recognized in “Other assets” in our unaudited Condensed Consolidated Balance Sheets. After considering the impact of the amortization of original issue discount and deferred financing fees, the effective interest rate for the 2016 First Lien Term Loan was approximately 5.03% at the issue date.

The 2016 First Lien Term Loan is collateralized by a first-priority security interest in substantially all of our assets except for accounts receivable, inventory and cash and cash equivalents that serve as first-priority collateral for the ABL Facility, on which the 2016 First Lien Term Loan maintains a second-priority interest.

Interest on borrowings under the 2016 First Lien Term Loan varies based on either LIBOR or a bank base rate, plus a margin. Between June 2, 2016 and the date of delivery of the compliance certificate related to the financial statements for 2nd Quarter 2016, interest varies based on either LIBOR plus 3.75% or a bank base rate plus 2.75%, subject to a minimum LIBOR rate of 1.00%, in the case of the LIBOR option. Thereafter, interest varies based on either LIBOR or a bank base rate, plus a margin as set forth in the following table:

Total Net	LIBOR		Bank Base
Leverage Ratio	Loans		Rate Loans
Less than or equal to 4.00:1.00	3.50	%	2.50	%
Greater than 4.00:1.00	3.75	%	2.75	%

Interest based on the bank base rate is subject to the prime rate plus a margin. The agreement governing the 2016 First Lien Term Loan stipulates mandatory quarterly principal repayments of $3,250 between September 30, 2016 and the maturity date, at which point, it stipulates a balloon payment of $1,212,250.

Similar to the Prior Term Loans, the agreement governing the 2016 First Lien Term Loan includes certain non-financial covenants, which include limitations on our ability to incur additional indebtedness, issue preferred stock, pay dividends, make distributions on our capital stock, repurchase our capital stock, make certain investments, create liens on our assets, enter into transactions with affiliates, transfer and sell assets, merge, consolidate or sell all or substantially all of our assets. Such covenants also create restrictions on dividends and certain payments by our restricted subsidiaries. At July 2, 2016, we were in compliance with all such covenants. Financial maintenance covenants are also included in the agreement but these only apply under certain conditions. The 2016 First Lien Term Loan also requires mandatory annual prepayment of Excess Cash Flow (as defined in the Credit Agreement governing the 2016 First Lien Term Loan).

Prior to its pay-off, the agreement governing the 2012 First Lien Term Loan required a mandatory prepayment of amounts equal to Excess Cash Flow (as defined in the Credit Agreement governing the 2012 First Lien Term Loan). For the fiscal year ended January 2, 2016, a mandatory prepayment related to Excess Cash Flow of approximately $13,407 was determined. This payment was made in the second quarter of 2016. However, certain debt holders exercised their option to reject the prepayment and $2,815 of the payment was returned to us.

The maximum borrowing limit on the ABL Facility is $175,000 and such maximum borrowing base limit is further subject to a borrowing base limitation that is derived from applying defined calculations to inventory and accounts receivable balances. The agreement governing the ABL Facility continues to include certain non-financial covenants as well as certain financial maintenance covenants that only go into effect under certain conditions. At July 2, 2016 and January 2, 2016, availability under the ABL Facility were derived as follows:

	July 2,		January 2,
	2016		2016
Borrowing base limitation	$	128,058	$	130,941
Less: outstanding letters of credit	5,498		5,498
Less: revolving facility balance	183		—

Net availability	$	122,377	$	125,443

At July 2, 2016, the interest rate for borrowings on the ABL Facility was 4.00% (base rate 3.50% plus 0.50% margin) and, for the term loans, the interest rate was 4.75%.

Future maturities of total debt excluding capital leases, were as follows as of July 2, 2016:

Fiscal Year
Remainder of 2016	$	6,500
2017	13,000
2018	13,000
2019	13,000
2020	13,000
Thereafter	1,241,683

	$	1,300,183
Less: amounts representing unamortized original issue discount and loan origination fees	(21,494		)

	$	1,278,689

Future maturities of the 2016 First Lien Term Loan that are included in the table above are based on the contractual maturity schedule. However, on July 21, 2016, we voluntarily repaid $205,000 of the 2016 First Lien Term Loan using proceeds from the sale of our common stock in the IPO that is more fully discussed in Note 21. We applied the repayment to the scheduled payments that would have fallen due between September 30, 2016 and June 2, 2023, and also, to a portion of the balloon payment due June 2, 2023. As a result, as of July 21, 2016, the only required future payment under the 2016 First Lien Term Loan is an amended balloon payment of $1,095,000 which is due June 2, 2023.