Debt |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Debt | |
| Debt | Note 3. Debt Bank Revolving Credit Notes On June 28, 2023, and as last amended on June 26, 2025, we entered into an amended and restated credit agreement (the Credit Agreement) with certain lenders and Wells Fargo Bank, National Association, as administrative agent (the Agent). The Credit Agreement provides for a $350,000 revolving credit facility, with a letter of credit sub-facility, and a swingline facility in an aggregate amount of $25,000. All amounts borrowed under the credit agreement mature on June 28, 2028. The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on our ability to, subject to certain exceptions, create, incur or assume indebtedness; create, incur, assume or suffer to exist liens; make certain investments; allow our subsidiaries to merge or consolidate with another entity; make certain asset dispositions; pay certain dividends or other distributions to shareholders; enter into transactions with affiliates; enter into sale leaseback transactions; and exceed the limits on annual capital expenditures. The Credit Agreement also requires us to satisfy certain financial covenants, including a minimum consolidated interest coverage ratio of 3.00 to 1.00 as well as a consolidated total leverage ratio not to exceed 3.50 to 1.00. The Company entered into an amendment (First Amendment) to the Credit Agreement on June 26, 2025. The First Amendment increased the amount of total allowable borrowings under the revolving credit facility to $350,000 from $250,000, by exercising the previously available $100,000 accordion feature. All other material terms of the credit agreement, including applicable interest rates, remained unchanged. The Company incurred financing costs of $793 associated with executing the First Amendment, with the short-term and long-term balance of $264 and $529, respectively, recorded in prepaid expenses and other current assets and other long-term assets in the Condensed Consolidated Balance Sheets. These deferred financing costs will be amortized over the remaining duration of the agreement. At June 30, 2025, our consolidated total leverage ratio was 1.36 to 1.00 as compared to a covenant maximum of 3.50 to 1.00 under the Credit Agreement. At June 30, 2025, our consolidated interest coverage ratio was 5.59 to 1.00 as compared to a covenant minimum of 3.00 to 1.00 under the Credit Agreement. Under the Credit Agreement, interest is payable quarterly at the adjusted secured overnight financing rate (SOFR) plus an applicable margin based on the current consolidated total leverage ratio (which may be adjusted for certain reserve requirements), plus 1.25% to 2.75% depending on the current consolidated total leverage ratio. Under certain circumstances, we may not be able to pay interest based on SOFR. If that happens, we will be required to pay interest at the Base Rate, which is the sum of the higher of (i) the Prime Rate (as publicly announced by the Agent from time to time), (ii) the Federal Funds Rate plus 0.50%, and (iii) Adjusted Term SOFR for a one-month tenor in effect on such day 1.00%. The interest rate was 5.66% and 6.55% as of June 30, 2025 and December 31, 2024, respectively. Additionally, the agreement has a fee on the average daily unused portion of the aggregate unused revolving commitments. This fee was 0.20% and 0.25% as of June 30, 2025 and December 31, 2024, respectively. The Company was in compliance with all financial covenants of its credit agreements as of June 30, 2025 and December 31, 2024. The amount borrowed on the revolving credit notes was $69,280 and $79,725 as of June 30, 2025 and December 31, 2024, respectively. Other Debt Additionally, the Company has a Fond du Lac County and Fond du Lac Economic Development Corporation term note (Fond du Lac Term Note). The Fond du Lac Term Note is secured by a security agreement, payable in annual installments of $500 plus interest at 2.00% and is due in full in December 2028. The balance outstanding as of June 30, 2025 and December 31, 2024 was $1,875. The short-term and long-term balance of $500 and $1,375, respectively, are recorded in other current liabilities and other long-term liabilities in the Condensed Consolidated Balance Sheets, respectively. |