v3.25.2
Debt
 9 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Debt
Note 10 - Debt
June 30, 2025September 30, 2024
Interest RateMaturity Date
Carrying Value of Debt(6)
Carrying Value of Debt(6)
Revolving Credit Facility(1)
6.14 %Nov 2027$6,000 $56,000 
Avondale Term Loan(2)
6.37 %May 202827,726 28,390 
Lisle Term Loan(3)
6.32 %Apr 202936,275 36,929 
Finance lease(4)
6.02 %Jan 20294,077 4,768 
Total debt74,078 126,087 
Debt issuance costs presented with debt (5)
(314)(383)
Total debt, net73,764 125,704 
Less: current portion of long-term debt(2,822)(2,697)
Long-term debt$70,942 $123,007 
(1)     Interest on the Revolving Credit Facility (as defined below) accrues at an annual rate equal to Daily Term SOFR plus a margin of 1.85%.
(2)    Interest on the Avondale Term Loan (as defined below) accrues at a rate equal to one-month Term SOFR plus 2.0% and a tranche adjustment of 0.046%.
(3)    Interest on the Lisle Term Loan (as defined below) accrues at a rate equal to one-month Term SOFR plus 2.0%.
(4)    The finance lease is related to a facility lease with an annual interest rate of 6.02% that matures in 2029. See Note 8 for additional details on our finance lease.
(5)    The unamortized debt issuance costs relate to the Avondale Term Loan and the Lisle Term Loan.
(6)    The Revolving Credit Facility, Avondale Term Loan, Lisle Term Loan and finance leases bear interest at rates commensurate with market rates, and therefore, the respective carrying values approximate fair value (Level 2).
Revolving Credit Facility
On November 18, 2022, we entered into a $100.0 million senior secured revolving credit facility with Fifth Third Bank (the “Credit Facility” or “Revolving Credit Facility”), which included a $20.0 million sub facility available for letters of credit. On September 26, 2024, we amended the Credit Facility to increase the commitment amount to $125.0 million, extend the maturity date to November 30, 2027, and provide for the option to request an increase of up to an additional $25.0 million, which may be granted at the lender’s discretion to grant such increase. Advances made under the Credit Facility bear interest at an annual rate equal to (i) the Term SOFR rate, (ii) the Daily Simple SOFR rate, or (iii) the Base Rate (i.e., the greater of 3.5% and the lender’s prime rate). In each case that a SOFR rate is selected, an applicable margin that varies from 1.85% up to 2.35%, based on our then-current total leverage ratio, is applied.
During the nine months ended June 30, 2025, we made payments on the Credit Facility of $56.0 million and we received proceeds of $6.0 million. The remaining availability under the Credit Facility as of June 30, 2025 was $119.0 million.
In July 2025, we used cash on hand to repay $6.0 million outstanding on the Credit Facility. Additionally in July 2025, we issued a letter of credit for $19.6 million, with an expiration date of June 30, 2026, to the ED in order to lift the core growth restrictions imposed on Concorde and MIAT campuses as a result of our acquisitions. These two transactions reduced the overall availability under the Credit Facility to $105.4 million and sub facility available for letters of credit to $0.4 million, respectively. It is likely that we will borrow from the Credit Facility in future periods based on future working capital or other needs.
Avondale Term Loan
In connection with the Avondale, Arizona building purchase in December 2020, we entered into a credit agreement with Fifth Third Bank (the “Avondale Lender”) on May 12, 2021 in the maximum principal amount of $31.2 million with a maturity of
seven years (the “Avondale Term Loan”). The Avondale Term Loan bears interest at the rate of Term SOFR plus 2.0% and a tranche rate adjustment of 0.046%. Principal and interest payments are due monthly. The Avondale Term Loan is secured by a first priority lien on our Avondale, Arizona property, including all land and improvements. Additionally, we entered into an interest rate swap agreement with the Avondale Lender. See Note 11 for further discussion on the interest rate swap.
Lisle Term Loan
On April 14, 2022, our consolidated subsidiary, 2611 Corporate West Drive Venture LLC (the “Borrower”), entered into a new Loan Agreement (“Lisle Loan Agreement”) with Valley National Bank (the “Lisle Lender”), to fund the acquisition and retire the prior loan agreement with Western Alliance bank, via a term loan in the original principal amount of $38.0 million with a maturity of seven years (the “Lisle Term Loan” and together with the Avondale Term Loan, the “Term Loans”). The Lisle Term Loan bears interest at a rate of one-month Term SOFR plus 2.0%. The Lisle Term Loan is secured by a mortgage on the Lisle, Illinois campus and is guaranteed by the Company. In connection with the Lisle Term Loan, we entered into an interest rate swap agreement. See Note 11 for further discussion on the interest rate swap.
Debt Covenants for our Credit Facility and Term Loans
We are subject to certain customary affirmative and negative covenants under the Revolving Credit Facility and the Term Loans, including, without limitation, certain reporting obligations, certain limitations on restricted payments, limitations on liens, encumbrances and indebtedness and various financial covenants, including debt service coverage ratios. As of June 30, 2025, we were in compliance with our debt covenants under our Term Loans. Under our Revolving Credit Facility, however, while we were in compliance with the Fixed Charge Coverage and Leverage ratios, our Quick Ratio of 0.62 at June 30, 2025 did not meet the required Quick Ratio of 0.65. The failure of this covenant was primarily due to paying down the Revolving Credit Facility with available cash and additional cash investments in held-to-maturity securities which are excluded from the Quick Ratio calculation. We have obtained a waiver for the failure to meet the Quick Ratio covenant as of June 30, 2025 from Fifth Third Bank.
Debt Maturities
Scheduled principal payments due on our debt for the remainder of 2025 and for each fiscal year through the period ended September 30, 2029, and thereafter were as follows at June 30, 2025:
MaturityRevolving Credit Facility & Term LoansFinance LeaseTotal
Remainder of 2025$445 $243 $688 
20261,837 1,029 2,866 
20271,909 1,131 3,040 
202832,610 1,239 33,849 
202933,200 435 33,635 
Thereafter— — — 
Subtotal70,001 4,077 74,078 
Debt issuance costs presented with debt(314)— (314)
Total$69,687 $4,077 $73,764