Company: CAVA
Filing Date: 2025-05-16
Form Type: 10-Q
Source: 0001628280-25-026077
Chunk: 16

Company: CAVA GROUP, INC.
Filing Date: 2025-05-16
Form: 10-Q
Item: Item 1
Chunk 16
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 loan commitment with available borrowing capacity of $74.1 million, net of $0.9 million of outstanding letters of credit (the “2022 Credit Facility”), with JPMorgan Chase Bank, N.A. as administrative agent. The 2022 Credit Facility has a five-year term and matures on March 11, 2027. Interest on loans under the 2022 Credit Facility are based on the one, three or six months Adjusted Term Secured Overnight Financing Rate (as described in the 2022 Credit Facility), as applicable, plus an applicable margin of 1.50% to 2.50% based on the Company’s Total Rent Adjusted Net Leverage Ratio (as defined in the 2022 Credit Facility). The Company is also required to pay a commitment fee for unused amounts under the 2022 Credit Facility, which ranges from 0.20% to 0.35% based on the Total Rent Adjusted Net Leverage Ratio. The 2022 Credit Facility is unconditionally guaranteed by certain of the Company’s domestic restricted subsidiaries and is secured, subject to permitted liens and other exceptions, by a first-priority security interest in and pledge of certain assets of the borrower and the guarantors. The 2022 Credit Facility includes customary restrictive covenants and covenants that require compliance with certain leverage ratios. As of April 20, 2025, the Company was in compliance with these financial and other covenants, and the Company had no borrowings under the 2022 Credit Facility.

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7.    INCOME TAXES

Income taxes for the sixteen weeks ended April 20, 2025 has been included in the accompanying unaudited condensed consolidated financial statements on the basis of an estimated annual effective tax rate. In addition to the amount of tax resulting from applying the estimated annual effective tax rate to pre-tax income, the Company includes, when appropriate, certain items treated as discrete events to arrive at an estimated overall tax amount. The effective income tax rate for the sixteen weeks ended April 20, 2025 was a benefit of 26.3% due to a $10.7 million reduction to income tax expense associated with equity-based compensation. The effective tax rate in the prior year quarter was 1.8% as the amount of income tax expense was immaterial prior to the Company’s release of its valuation allowance against deferred tax assets in the fourth quarter of fiscal 2024.

8.    LEASES

The Company leases