v3.26.1
Debt
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Debt Debt
Long-term debt consists of the following obligations as of:
(in thousands)March 31, 2026December 31, 2025
Wintrust Revolving Loans32,380 10,000 
Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 4.40% to 8.60% through 2031
19,268 20,570 
Financing liability5,351 5,351 
Total debt56,999 35,921 
Less - Current portion of long-term debt(4,906)(5,031)
Less - Unamortized discount and debt issuance costs(350)(354)
Long-term debt$51,743 $30,536 
Wintrust Revolving Loans
The Company maintains a senior secured revolving credit facility with Wheaton Bank & Trust Company, N.A., a subsidiary of Wintrust Financial Corporation (collectively, “Wintrust”), as administrative agent, pursuant to a Second Amended and Restated Credit Agreement originally entered into on May 5, 2023 (the “Second A&R Wintrust Credit Agreement”).
On June 27, 2025, LFS, LHLLC, and other designated parties entered into a second amendment to the second amended and restated Wintrust Credit Agreement (the “Second Amendment to the Second A&R Wintrust Credit Agreement”) with Wintrust, as administrative agent, and the other lenders party thereto (the “Wintrust Revolving Loan”). The Second Amendment to the Second A&R Wintrust Credit Agreement provides for, among other things, (i) an upsize of the aggregate principal amount of the senior secured revolving credit facility from $50.0 million to $100.0 million, (ii) modifying the definition of “L/C Sublimit” to increase the sublimit for the issuance of letters of credit from $10.0 million to $20.0 million, (iii) an extension of the revolving credit scheduled maturity date from February 24, 2028 to July 1, 2030, (iv) a decrease in the applicable margins for Term SOFR and Prime Rate (each defined in the Second Amendment to the Second A&R Wintrust Credit Agreement) revolving loans as determined with reference to LFS’s Senior Leverage Ratio (as defined in the Second Amendment to the Second A&R Wintrust Credit Agreement), (v) a term loan conversion feature, allowing LFS, subject to certain conditions, to convert outstanding revolving loans into one or more term loan tranches, (vi) the removal of certain covenant requirements, specifically in relation to LFS’s Borrowing Base, as formerly defined in the Second A&R Wintrust Credit Agreement, and (vii) modification to certain defined terms to reflect updated operational and financial terms.
Following the execution of the Second Amendment to the Second A&R Wintrust Revolving Loan, the Wintrust Revolving Loan bears interest, at LFS’s option, at either the Term SOFR (with a 0.15% floor) plus 2.50% or the Prime Rate (with a 3.0% floor), subject to a 95 basis point step-down based on the ratio between the senior debt of the Company and its subsidiaries to the EBITDA of LFS and its subsidiaries for the most recently ended four fiscal quarters.
As of March 31, 2026 and December 31, 2025, the Company had $32.4 million and $10.0 million in borrowings outstanding under the Wintrust Revolving Loans, respectively. During the three months ended March 31, 2026, the maximum outstanding borrowings under the Wintrust Revolving Loans at any time was $32.4 million, and the average daily balance was $13.7 million. During the three months ended March 31, 2025, the maximum outstanding borrowings under the Wintrust Revolving Loans at any time was $10.0 million and the average daily balance was $10.0 million. For the three months ended March 31, 2026 and 2025, the Company incurred interest on the Wintrust Revolving Loans at a weighted average annual interest rate of 5.49% and 5.72%, respectively, inclusive of the net impact associated with the Company's interest rate swap arrangement.
At March 31, 2026 and December 31, 2025, the Company had irrevocable letters of credit in the amount of $7.0 million and $5.1 million, respectively, with its lender to secure obligations under its self-insurance program.
As of March 31, 2026, the Company was in compliance with all financial maintenance covenants as required by the Second A&R Wintrust Credit Agreement.
The following is a summary of the applicable margin and commitment fees payable on the Wintrust Revolving Loan, as amended, credit commitment:
LevelSenior Leverage RatioApplicable Margin for SOFR Revolver loansApplicable Margin for
Prime Revolving loans		Applicable Margin for commitment fee
I
Greater than 1.00 to 1.00
2.50 %(0.70)%0.25 %
II
Less than or equal to 1.00 to 1.00
2.25 %(0.95)%0.25 %
Interest Rate Swap
The Company is party to an interest rate swap agreement to manage the risk associated with a portion of its variable-rate long-term debt. The interest rate swap involves the exchange of fixed-rate and variable-rate payments without the exchange of the underlying notional amount on which the interest payments are calculated. The swap agreement became effective on July 14, 2022 and will terminate on July 31, 2027. The notional amount of the swap agreement is $10.0 million with a fixed interest rate of 3.12% plus the SOFR Applicable Margin. If the one-month SOFR (as defined in the Second Amendment to the Second A&R Credit Agreement) is above the fixed rate, the counterparty pays the Company, and if the one-month SOFR is less than the fixed rate, the Company pays the counterparty, the difference between the fixed rate of 3.12% and the one-month SOFR. The Company has not designated this instrument as a hedge for accounting purposes. As a result, the change in fair value of the derivative instrument is recognized directly in earnings on the Company's condensed consolidated statements of operations as a gain or loss on interest rate swap.
Sale-Leaseback Financing Transaction
On September 29, 2022, the Company completed a sale and leaseback transaction related to its facility in Pontiac, Michigan (the “Pontiac Facility”), with an aggregate transaction value of approximately $7.8 million, consisting of a purchase price of approximately $5.4 million and up to $2.4 million of tenant improvement allowances.
In connection with the transaction, the Company entered into a 25-year lease agreement with two five-year renewal options. Annual minimum rent is approximately $0.5 million, payable monthly and subject to annual escalations of approximately 2.5%. The lease includes a one-time termination option at the end of the fifteenth lease year, which would require payment of a termination fee of approximately $1.7 million if exercised.
The Company accounted for the transaction as a failed sale-leaseback and financing arrangement under ASC 842, as the lease was classified as a finance lease and control of the property did not transfer. Accordingly, no gain or loss was recognized, and the property was not derecognized from the Company’s condensed consolidated balance sheets. Proceeds received were recorded as a financing liability and are repaid through lease payments, which are allocated between principal and interest.
As of March 31, 2026, the financing liability was $5.0 million, net of issuance costs, which was recognized within long-term debt on the Company's condensed consolidated balance sheets. For both the three months ended March 31, 2026 and 2025, approximately $0.1 million of interest expense associated with the financing was recognized, respectively.