v3.25.4
Note 7 - Long-term Debt
 12 Months Ended
Dec. 31, 2025
Notes to Financial Statements  
Debt Disclosure [Text Block]

7. LONG-TERM DEBT

 

On  April 26, 2024, we refinanced our existing debt by amending and restating our credit agreement with Bank of America, N.A., as agent, sole lead arranger and sole bookrunner and other lenders party thereto (the "ABL Agreement"). The ABL Agreement consists of a $175.0 million asset-based lending credit facility (the "ABL Facility") and a $50.0 million term loan facility (the "Term Facility"). The ABL Agreement is collateralized by a first-lien on substantially all of the Company's domestic assets. The ABL Facility includes a separate first in, last out (FILO) tranche, which allows the Company to borrow at higher advance rates on eligible accounts receivables and inventory balances. As of  December 31, 2025, we had borrowing capacity of $39.5 million under the ABL Facility. The Term Facility provides for monthly principal payments until the date of maturity, at which date the remaining principal balance is due.

 

The refinance resulted in a $2.6 million expense within Interest Expense and Other - net in the accompanying Consolidated Statements of Operations, consisting of a $1.1 million loss on term loan extinguishment and a $1.5 million term loan prepayment penalty for the twelve months ended December 31, 2024. The $1.1 million loss on term loan extinguishment is included as a noncash adjustment to net income and the $1.5 million prepayment penalty is included within Repayments of long-term debt in the accompanying Consolidated Statements of Cash Flows for the twelve months ended  December 31, 2024.

 

Loans under the ABL Agreement bear interest at a variable rate equal to either (i) the Base Rate (as calculated in the ABL Agreement) or (ii) Term SOFR (as calculated in the ABL Agreement), plus in each case an interest margin determined by the Company's average daily availability as a percentage of the aggregate amount of revolving commitments for revolving loans and term loans, with a range of Base Rate margins and term SOFR margins, as set forth of the following chart: 

 

Revolver Pricing Level

Average Availability as a Percentage of Commitments

 

Term SOFR Term Loan

  

Base Rate Term Loan

  

Term SOFR Revolver Loan

  

Base Rate Revolver Loan

  

Term SOFR FILO Loan

  

Base Rate FILO Loan

 

I

> 66.7%

  2.75%  1.50%  1.25%  0.00%  1.75%  0.50%

II

>33.3% and < or equal to 66.7%

  3.00%  1.50%  1.50%  0.00%  2.00%  0.50%

III

< or equal to 33.3%

  3.25%  1.75%  1.75%  0.25%  2.25%  0.75%

 

In connection with the ABL Agreement, we paid certain fees that were capitalized and will be amortized over the life of such agreement. 

 

Current and long-term debt under the ABL Agreement consisted of the following as of December 31:

 

  

December 31,

  

December 31,

 

($ in thousands)

 

2025

  

2024

 

Term Facility that matures in 2029 with an effective interest rate of 7.50% as of December 31, 2025, and 10.47% as of December 31, 2024

 $26,762  $35,123 

ABL Facility that matures in 2029:

        

SOFR borrowings with an effective interest rate of 5.62% as of December 31, 2025, and 6.24% as of December 31, 2024

  94,300   91,300 

Prime borrowings with an effective interest rate of 7.16% as of December 31, 2025, and 7.77% as of December 31, 2024

  3,321   4,577 

Total debt

  124,383   131,000 

Less: Unamortized debt issuance costs

  (1,741)  (2,263)

Total debt, net of debt issuance costs

  122,642   128,737 

Less: Debt maturing within one year

  (8,361)  (8,361)

Long-term debt

 $114,281  $120,376 

 

Contractual maturities of total debt are as follows:

 

   

Debt Payment

 

($ in thousands)

Year

 

Schedule

 
 

2026

  8,361 
 

2027

  8,361 
 

2028

  8,361 
 

2029

  99,300 
 

Total

 $124,383 

 

Credit Facility Covenants

 

Our ABL Facility and Term Facility require us to maintain a minimum fixed charge coverage ratio, as defined in the ABL Agreement. As of December 31, 2025 and 2024, we were incompliance with all credit facility covenants. The ABL Facility and Term Facility also contain restrictions on the amount of dividend payments and share repurchases. As of December 31, 2025 and 2024, the Company was in compliance with the amounts paid on dividends and share repurchases in accordance with our credit facilities. We were in compliance with all applicable credit facility covenants under our previous term debt and asset-based lending credit facility through April 26, 2024, the date on which we refinanced such debt.

 

Interest expense was approximately $10.0 million and $17.0 million for the years ended December 31, 2025 and 2024, respectively.