Debt |
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| Debt | NOTE 10. DEBT Current and long-term debt obligations consisted of the following as of March 31, 2025 and December 31, 2024:
Term Loan and Revolving Credit Facility On February 27, 2025, the Company, as borrower, entered into the Third Amended and Restated Revolving Credit, Guaranty and Security Agreement (the “New Credit Agreement”), dated as of February 27, 2025, with PNC Bank, National Association (“PNC”) as the agent, to replace the Second A&R Credit Agreement (defined below) and provide for and govern a revolving credit facility (the “Revolving Credit Facility”). The New Credit Agreement matures on February 27, 2030. As of March 31, 2025, the Company has a $15.6 million outstanding balance on the Revolving Credit Facility, and borrowing capacity available on the Revolving Credit Facility was $103.3 million. Debt Modifications. In December 2023, the Second Amended and Restated Revolving Credit, Term Loan, Guaranty and Security Agreement (as amended, the “Second A&R Credit Agreement”) was amended to permit the repayment in full of the Subordinated Notes prior to the maturity date. At the time of the amendment, the availability of the revolving line of credit was $110.0 million, and the borrowing availability of a term loan (the “Term Loan”) was $25.0 million. The Term Loan required quarterly principle payments of $1.25 million, followed by a final payment of all unpaid principal and accrued and unpaid interest on the maturity date. The maturity date of the Second A&R Credit Agreement was June 10, 2026. In June 2024, the Second A&R Credit Agreement was amended to permit the change in control event and payment of the cash dividend contemplated by the Merger Agreement. Refer to Note 3. Mergers and Acquisitions for discussion of the Merger. On February 27, 2025, we entered into the New Credit Agreement to replace the Second A&R Credit Agreement. The New Credit Agreement, among other things, (i) extended the maturity of the agreement from June 2026 to February 2030, (ii) increased the maximum revolving amount from $110 million to $200 million, which may, subject to certain conditions, be increased to $250 million, (iii) eliminated the term loan commitment and (iv) provided for an applicable margin for interest on the loans to be based on availability, effective as of April 1, 2025. The applicable margin under the New Credit Agreement will range from 0.50% to 1.00% for swing loans and alternate base rate revolving loans and 1.50% to 2.00% for term SOFR revolving loans. The New Credit Agreement includes various financial and non-financial covenants, including a fixed charge coverage ratio if at any time an Event of Default (as defined in the New Credit Agreement) has occurred and is continuing or if Excess Availability (as defined in the New Credit Agreement) is less than 20%, of not less than 1.10 to 1.00. As defined by the New Credit Agreement, the fixed charge coverage ratio represents the ratio of Adjusted EBITDA (as defined in the Credit Agreement), less certain capital expenditures, dividends and tax payments, to all scheduled debt payments during the applicable period. We performed a debt modification analysis in accordance with Accounting Standards Codification Topic 470, Debt ("ASC 470"), and concluded that the elimination of the Term Loan represented a debt extinguishment. We recognized a loss in February 2025 due to the write-down of the remaining debt issuance costs pertaining to the Term Loan of $0.4 million. We were in compliance with our debt covenants at March 31, 2025 and December 31, 2024. |
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