National Vision Holdings Inc

6. Debt

Our debt consists of the following:

Scheduled annual maturities of debt are as follows:

Credit Agreement

On August 9, 2024, Nautilus Acquisition Holdings, Inc. (“Holdings”), a Delaware corporation and a wholly-owned subsidiary of National Vision Holdings, Inc., National Vision, Inc. (“Borrower”), a Georgia corporation and a wholly-owned subsidiary of the Company, and certain other subsidiaries of the Company entered into a Joinder Agreement (the “Joinder Agreement”) to the Second Amended and Restated Credit Agreement, dated as of June 13, 2023 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Holdings, Borrower, the other credit parties party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent.

The Joinder Agreement provides for, among other things, the establishment of incremental term loans in an aggregate principal amount of $115.0 million, provided to the borrower on August 9, 2024. These incremental term loans under the Joinder Agreement have the same terms as the existing term loans under the Second Amended and Restated Credit Agreement, dated as of June 13, 2023.

The additional borrowings resulted in $0.9 million of fees deferred on the Condensed Consolidated Balance Sheets during the three and nine months ended September 28, 2024. After giving effect to additional borrowings, $257.5 million principal remains outstanding under Term Loan A.

2025 Notes

On August 12, 2024, the Company used the proceeds of the incremental term loan, together with cash from the balance sheet, to repurchase $217.7 million aggregate principal amount of the 2025 Notes for an aggregate cash repurchase price of $215.0 million plus accrued and unpaid interest on such notes. The repurchase was accounted for as an extinguishment of debt and resulted in an extinguishment gain of $0.9 million on the Company’s Condensed Consolidated Statements of Operations during the three and nine months ended September 28, 2024, which includes a write-off of related deferred issuance costs of $1.0 million and immediate recognition of third party-fees of $0.8 million. After giving effect to the repurchase, $84.8 million principal amount remains outstanding. Our effective interest rate remained at 3.2% as of September 28, 2024.

Based on the initial conversion rate, the 2025 Notes were convertible into 12.9 million shares of our common stock and we reserved for the possible issuance of 16.5 million shares, which is the maximum amount that could be issued upon conversion. As of September 28, 2024, the 2025 Notes are convertible into 2.7 million shares of our common stock and a maximum of 3.5 million shares of our common stock. See Note 13. “Earnings Per Share” for the treatment of earnings per share in relation to the 2025 Notes.

The 2025 Notes mature on May 15, 2025, and due to the upcoming maturity the outstanding principal balance of $84.8 million is reflected as a current liability in the accompanying Condensed Consolidated Balance Sheets as of September 28, 2024. As of September 28, 2024, the Company has $293.6 million of availability under its revolving credit facility, in addition to $81.2 million of cash on hand, which provides the Company with sufficient liquidity to repay the remaining balance of the 2025 Notes as they become due.

We recognized the following in Interest expense (income), net related to the 2025 Notes:

As of September 28, 2024, the stock price conditions under which the 2025 Notes can be converted at the holders’ option were not met.

We were in compliance with all covenants related to our debt as of September 28, 2024.