v3.25.1
DEBT
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
DEBT DEBT
Recent Refinancing Transactions. On March 12, 2025, we entered into the Refinancing Transactions (described in further detail below) that included the entry into a new First Lien Term Loan Credit Agreement (described below) with the initial proceeds therefrom utilized to repay loans (together with any accrued interest and prepayment premium) outstanding under our 2022 ABL Credit Agreement (defined below) and the Existing A&R Term Loan Agreement (defined below). The completion of the Refinancing Transactions lowered our blended cost of capital, extended our term loan maturities out to 2030 and improved lending covenants.
As of March 31, 2025 and December 31, 2024, our total long-term debt and finance lease obligations are summarized as follows (in thousands):
March 31, 2025December 31, 2024
(unaudited)
2022 ABL Credit Agreement
$85,886 $112,671 
First Lien Term Loan1
167,451 — 
2025 Second Lien Term Loan1
93,868 — 
ME/RE Loans1
— 22,119 
Corre Uptiered Loan1
— 143,955 
Corre Incremental Term Loan1
— 39,824 
Equipment Finance Loan
898 1,399 
Total 348,103 319,968 
Finance lease obligations5,521 5,143 
Total long-term debt and finance lease obligations353,624 325,111 
Current portion of long-term debt and finance lease obligations(3,811)(6,485)
Total long-term debt and finance lease obligations, less current portion$349,813 $318,626 
1    Comprised of principal amount outstanding, less unamortized debt issuance costs. See below for additional information.
2022 ABL Credit Facility
On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loans (defined below), we fully paid off the delayed draw term loan of $35.0 million (the “Corre Delayed Draw Term Loan”) originally provided by Corre Partners Management, LLC (“Corre”) and certain of its affiliates, and the ME/RE Loans (described below) of $22.3 million provided by Eclipse (defined below) previously outstanding under the 2022 ABL Credit Agreement (as defined below).

On March 12, 2025, we entered into Amendment No. 6 (“ABL Amendment No. 6”) to that certain credit agreement dated as of February 11, 2022, with the lender parties thereto and Eclipse Business Capital, LLC, a Delaware limited liability company, as agent (“Eclipse”) (such agreement, as amended by Amendment No.1 dated as of May 6, 2022, Amendment No.2 dated as of November 1, 2022, Amendment No.3 dated as of June 16, 2023 (“ABL Amendment No.3”), Amendment No.4 dated as of March 6, 2024, Amendment No.5 dated as of September 30, 2024 and ABL Amendment No.6, the “2022 ABL Credit Agreement”).

ABL Amendment No.6 amended the 2022 ABL Credit Agreement to, among other things,
(i)permit the entry of the Company into the First Lien Term Loan Agreement (defined below), the borrowing of the First Lien Term Loans thereunder and the granting of liens with respect thereto;
(ii)make conforming changes to align the 2022 ABL Credit Agreement with certain terms of the First Lien Term Loan Agreement and the Second A&R Second Lien Term Loan Agreement (defined below), and
(iii)reflect the payoff of the term loan tranches previously outstanding under the 2022 ABL Credit Agreement prior to March 12, 2025 as described above.

Available funding commitments to us under the 2022 ABL Credit Agreement, subject to certain conditions, include a revolving credit line in an amount of up to $130.0 million to be provided by certain affiliates of Eclipse, with a $35.0 million sublimit for swingline borrowings, and a $26.0 million sublimit for issuances of letters of credit (the “Revolving Credit Loans”).

The terms of the Revolving Credit Loans are described in the table below (dollar amounts are presented in thousands):
Maturity date9/30/2027
Interest rateSOFR + applicable margin (base + applicable margin)
Actual interest rate:
3/31/20258.69%
3/31/202410.09%
Interest paymentsmonthly
Cash paid for interest
YTD 3/31/2025$1,761
YTD 3/31/2024$2,000
Principal balance
3/31/2025$85,886
12/31/2024$77,905
Unamortized balance of deferred financing cost
3/31/2025$1,026
12/31/2024$693
Available amount at 3/31/2025$6,273

As of December 31, 2024, the Corre Delayed Draw Term Loan had a net carrying balance of $34.8 million, which consisted of the principal balance of $35.0 million less the unamortized balance of debt issuance cost of $0.2 million. The actual interest rate at March 31, 2024 was 15.44% and cash paid for interest was $1.4 million during the quarters ended March 31, 2025 and 2024.

The 2022 ABL Credit Agreement contains customary conditions to borrowings and covenants, as described in the 2022 ABL Credit Agreement. As of March 31, 2025, we are in compliance with the covenants.

As of March 31, 2025, $9.4 million in letters of credit were issued under the 2022 ABL Credit Agreement. Such amounts remain undrawn and are off-balance sheet.
ME/RE Loans
On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loans (defined below), we fully paid off the ME/RE Loans of $22.3 million provided to us pursuant to ABL Amendment No.3. ME/RE Loans were secured by a first priority lien and mortgage on certain real estate and machinery and equipment of the Company.
As of December 31, 2024, the ME/RE Loans had net carrying balance of $22.1 million, which consisted of the principal balance of $23.0 million less the unamortized balance of debt issuance cost of $0.9 million. The actual and effective interest rates at March 31, 2024 were 11.19% and 17.38%, respectively. Cash paid for interest during the quarters ended March 31, 2025 and 2024 was $0.6 million and $0.7 million, respectively.

First Lien Term Loan Agreement
On March 12, 2025, we entered into a First Lien Term Loan Credit Agreement (the “First Lien Term Loan Agreement”) with the lenders party thereto and HPS Investment Partners, LLC. Available funding commitments include a $225.0 million senior secured first lien term loan (the “First Lien Term Loan”) consisting of a $175.0 million initial term loan tranche (the “Initial First Lien Term Loans”) and a $50.0 million delayed draw term loan tranche (the “First Lien Delayed Draw Term Loans”), which is available to be drawn from March 12, 2025 to June 30, 2027, subject to satisfying certain conditions, including pro forma compliance with a First Lien Net Leverage Ratio (as defined in the First Lien Term Loan Agreement) of 3.75 to 1.00 and Liquidity (as defined in the First Lien Term Loan Agreement) of not less than $40.0 million. All outstanding amounts in respect of the First Lien Term Loan mature and become due and payable on March 12, 2030. The Initial First Lien Term Loans borrowed under the First Lien Term Loan Agreement bear interest at an annual rate of the Secured Overnight Financing Rate (“SOFR”) for interest periods of one-, three- or six-months, at the Company’s election, plus a margin of 6.50% per annum. Beginning with the quarter ending September 30, 2025, the interest rate margin may vary from 7.00% to 6.00% depending on the First Lien Net Leverage Ratio.

The proceeds of the Initial First Lien Term Loans were used to redeem and repay the Corre Delayed Draw Term Loan and the ME/RE Loans under the 2022 ABL Credit Agreement and a portion of the outstanding balance of the A&R Term Loan Agreement (as defined below). To the extent borrowed, the proceeds of the First Lien Delayed Draw Term Loans will be used to solely repay the obligations under the Second A&R Second Lien Term Loan Agreement (as defined below). As of March 31, 2025, we have not drawn on the First Lien Delayed Draw Term Loans.

The terms of the Initial First Lien Term Loans are described in the table below (dollar amounts are presented in thousands):
Maturity date3/12/2030
Stated interest rateSOFR+applicable margin (base+applicable margin)
Principal payments
$438 quarterly
Effective interest rate
3/31/2025
12.64%
Actual interest rate
3/31/202510.83%
Interest paymentsquarterly
Cash paid for interest
YTD 3/31/2025$—
Balances at 3/31/2025
Principal balance $175,000
Unamortized balance of debt discount and issuance cost1
$(7,549)
Net carrying balance$167,451
1    Consists of debt discount of $3,932 and debt issuance cost of $3,617.
The First Lien Term Loan Agreement contains certain conditions to borrowings, events of default and affirmative and negative covenants and a financial covenant prohibiting the Company from exceeding a maximum First Lien Net Leverage Ratio (as defined in the First Lien Term Loan Agreement), tested as of the end of each fiscal quarter, of 5.50 to 1.00. Further, the First Lien Term Loan Agreement includes certain events of default, the occurrence of which may require that we pay an additional 2.0% interest on the outstanding loans and other obligations under the First Lien Term Loan Agreement. As of March 31, 2025, we are in compliance with the covenants.
A&R Term Loan Credit Agreement / Second A&R Second Lien Term Loan Credit Agreement
On March 12, 2025, we entered into a Second Amended and Restated Second Lien Term Loan Credit Agreement with the lenders party thereto and Cantor Fitzgerald Securities, as Agent, (the “Second A&R Second Lien Term Loan Agreement”), which amended and restated the existing Amended and Restated Term Loan Credit Agreement, dated June 16, 2023 (the “Existing A&R Term Loan Agreement”). The Existing A&R Term Loan Agreement (prior to the Refinancing Transactions) included a term loan credit agreement entered into on November 9, 2021, as amended through March 29, 2023 (the “Corre Uptiered Loan”), and an additional funding commitment, subject to certain conditions, consisting of a $57.5 million senior secured first lien term loan (the “Corre Incremental Term Loan”) provided by Corre and certain of its affiliates and comprised of a $37.5 million term loan tranche and a $20.0 million delayed draw tranche, of which $10.0 million remained undrawn at March 12, 2025.
On March 12, 2025, using a portion of the proceeds from the Initial First Lien Term Loans, we fully paid off the outstanding principal balance on the Corre Incremental Term Loan in the amount of $46.3 million and paid down $54.1 million of the outstanding principal balance on the Corre Uptiered Loan. The remaining portion of the Corre Uptiered Loan of $93.9 million, together with certain fees and accrued interest, were rolled into the 2025 Second Lien Term Loans (defined below).

The Second A&R Second Lien Term Loan Agreement contains certain conditions to borrowings, events of default and affirmative and negative covenants and a financial covenant prohibiting the Company from exceeding a maximum First Lien Net Leverage Ratio (as defined in the Second A&R Second Lien Term Loan Agreement), tested at the end of each fiscal quarter of 6.00 to 1.00. Further, the Second A&R Second Lien Term Loan Agreement includes certain events of default, the occurrence of which may require that the Company pay an additional 2.0% interest on the outstanding loans and other obligations under the Second A&R Second Lien Term Loan Agreement. As of March 31, 2025, we are in compliance with the covenants.

Available funding commitments to the Company under the Second A&R Second Lien Term Loan Agreement, subject to certain conditions, include a $107.4 million second lien term loan (the “Second Lien Term Loans”), provided by Corre and certain of its affiliates, consisting of a $97.4 million term loan tranche (the “2025 Second Lien Term Loans”) and a $10.0 million delayed draw term loan tranche (the “Second Lien Delayed Draw Term Loans”) which is available to be drawn from March 12, 2025, until April 15, 2026, subject to satisfying certain conditions. All outstanding amounts in respect of the Second Lien Term Loans mature and become due and payable on June 10, 2030. To the extent borrowed, the proceeds of the Second Lien Delayed Draw Term Loans are permitted to be used by the Company for general working capital and liquidity purposes. As of March 31, 2025, we have not drawn on the Second Lien Delayed Draw Term Loans.

The Second Lien Term Loans bear interest at an annual rate of 13.5% through the earlier of (i) September 30, 2026, and thereafter, if the outstanding principal balance of the Second Lien Term Loans exceeds 50% of the principal balance at March 12, 2025, the interest rate will increase by 0.25% quarterly, subject to a maximum rate of 14.5% per annum, and (ii) the date on which the Second Lien Delayed Draw Term Loan is borrowed in full, in which case the interest rate will increase to the maximum rate of 14.5% per annum. Interest is payable quarterly and if the First Lien Net Leverage Ratio (as defined in the Second A&R Second Lien Term Loan Agreement) is greater than or equal to 3.50 to 1.00, then all interest shall be paid in kind; if the First Lien Net Leverage Ratio is less than 3.50 to 1.00 and greater than or equal to 3.00 to 1.00, 50% of the interest shall be payable in cash, with the other 50% to be paid in kind; and if the First Lien Net Leverage Ratio is less than 3.00 to 1.00, all interest will be payable in cash.

The terms of the 2025 Second Lien Term Loans are described in the table below (dollar amounts are presented in thousands):
Maturity date6/10/2030
Principal payments
$244 quarterly
Effective interest rate
3/31/202516.01%
Actual interest rate
3/31/202513.50%
Interest paymentsquarterly
Cash paid for interest
3/31/2025$—
PIK interest added to principal balance
3/31/2025$—
Balances at 3/31/2025
Principal balance$97,413
Unamortized balance of debt issuance cost$(3,545)
Net carrying balance$93,868

As of December 31, 2024, the Corre Incremental Term Loan had a net carrying balance of $39.8 million, which consisted of the principal balance of $46.6 million less the unamortized balance of debt issuance cost of $6.8 million. The stated and effective interest rates at March 31, 2024 were 12.0% and 22.96%, respectively. Cash paid for interest during the quarters ended March 31, 2025 and 2024 was $2.5 million and $1.4 million, respectively.
As of December 31, 2024, the Corre Uptiered Loan had a net carrying balance of $144.0 million, which consisted of the principal balance of $144.5 million less the unamortized balance of debt issuance cost of $0.5 million. The stated and effective interest rates at March 31, 2024 were 13.5% and 14.56%, respectively. Cash paid for interest during the quarters ended March 31, 2025 and 2024 was $2.7 million and $0.3 million, respectively.

Warrants
As of March 31, 2025 and December 31, 2024, APSC Holdco II, L.P. held 500,000 warrants and certain affiliates of Corre collectively held 500,000 warrants, in each case providing for the purchase of one share of the Company’s common stock per warrant at an exercise price of $15.00. The warrants will expire on December 8, 2028.
The exercise price and the number of shares of our common stock issuable on exercise of the warrants are subject to certain antidilution adjustments, including for stock dividends, stock splits, reclassifications, noncash distributions, cash dividends, certain equity issuances and business combination transactions. The warrants can be exercised by rendering cash or by means of a cashless option as set forth in the agreement.
Equipment Finance Loan
On March 6, 2024, we entered into agreements to sell various equipment to an equipment finance lender for $2.9 million and lease the equipment for monthly payments of $181 thousand over eighteen months. The lease agreement provides for a bargain purchase option at the end of the lease term which we intend to exercise. The Company determined that the transaction did not meet the criteria for sale-leaseback in accordance with ASC 842, Leases and accounted for this arrangement as an equipment financing. The assets subject to the transaction remain on our balance sheet and continue to depreciate in accordance with our depreciation policy.
Fair Value of Debt
The fair value of our debt obligations is representative of the carrying value based upon the respective interest rate terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the debt obligations.
1970 Group Substitute Insurance Reimbursement Facility
On September 16, 2024, we entered into an amended and restated substitute insurance reimbursement facility agreement with the 1970 Group Inc. (“1970 Group”) (such agreement, the “Substitute Insurance Reimbursement Facility Agreement”). Under the Substitute Insurance Reimbursement Facility Agreement, the 1970 Group extended credit to us in the form of a substitute reimbursement facility (the “Substitute Reimbursement Facility”) to provide up to approximately $19.0 million of letters of credit on our behalf in support of our workers’ compensation, commercial automotive and general liability insurance policies. As of March 31, 2025, we have $19.0 million of letters of credit outstanding under the Substitute Reimbursement Facility.
According to the provisions of ASC 470, Debt, the arrangement is a “Substitute Insurance Reimbursement Facility” limited to the amounts drawn under the letters of credit. Therefore, until we use or draw on the Substitute Insurance Reimbursement Facility, the letters of credit are treated as an off-balance sheet credit arrangement. The fees paid by us periodically under this arrangement are deferred and amortized to interest expense over the term of the arrangement. As of March 31, 2025, we had approximately $1.0 million of unamortized deferred fees.
Liquidity
As of March 31, 2025, we had $12.8 million of unrestricted cash and cash equivalents and $4.0 million of restricted cash, including $2.8 million of restricted cash held as collateral for letters of credit and commercial card programs. International cash balances included in total cash as of March 31, 2025 were $4.8 million, and approximately $1.1 million of such cash is restricted. As of March 31, 2025, we had approximately $16.3 million of available borrowing capacity under our various credit agreements, consisting of $6.3 million available under the Revolving Credit Loans and $10.0 million available under the Incremental Delayed Draw Term Loan under the Second A&R Second Lien Term Loan Credit Agreement. As of March 31, 2025, we had $30.5 million in letters of credit and $1.6 million in surety bonds outstanding.