Company: WW
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-029511
Chunk: 106

Company: WW INTERNATIONAL, INC.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1A
Chunk 106
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 on our leverage ratio, we are obligated to offer to prepay our term loan facilities in an aggregate amount determined by our excess cash flow. In addition, if the aggregate principal amount of extensions of credit (inclusive of outstanding letters of credit) under the Revolving Credit Facility as of any fiscal quarter end exceeds 35%, or $61.3 million, of the aggregate revolving commitments, we are required to be in compliance with a consolidated first lien secured net leverage ratio of 5.25:1.00 through and including the first fiscal quarter of 2025 and 5.00:1.00 thereafter. Our consolidated first lien secured net leverage ratio as of December 28, 2024 was 8.36:1.00, and we do not expect we will be able to meet the 5.25:1.00 consolidated first lien secured net leverage ratio as of March 29, 2025. If we have more than $61.3 million outstanding under the Revolving Credit Facility and are not in compliance with the specified leverage ratio at the required time, we would be in default under the Revolving Credit Facility.

Our failure to comply with covenants could result in an acceleration of our debt, cause cross-defaults under our other debt, lead to the foreclosure on assets collateralizing secured debt (and the lenders and holders of that secured debt would rank ahead of the holders of unsecured debt in the proceeds of those assets) and result in our lenders terminating all commitments to extend further credit. If our indebtedness is accelerated, we may not be able to repay our indebtedness, and we may not be able to borrow sufficient funds to refinance such indebtedness. Any such prepayment or refinancing could adversely affect our financial condition and liquidity. In addition, if we incur additional debt in the future, we may be subject to additional covenants, which may be more restrictive than those to which we are currently subject. We currently believe we have sufficient liquidity to meet our obligations, including compliance with the covenants under our Revolving Credit Facility and long-term debt agreements for at least the next twelve months from the issuance of the December 28, 2024 financial statements, however, thereafter if we do not enter into transaction(s) to strengthen our balance sheet and increase our financial flexibility, our liquidity, results of operations, cash flows and financial condition may be materially affected.

Additionally, borrowings under our credit facilities are at variable rates of interest and expose us to interest rate risk. If interest rates