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Note 10 - Debt
 9 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Debt Disclosure [Text Block]

NOTE 10 - DEBT

 

The Company’s long-term debt as of March 31, 2026, and June 30, 2025, consisted of the following:

 

  

March 31,

  

June 30,

 

(In thousands)

 

2026

  

2025

 
         

Secured line of credit

 $200,000  $36,956 

Term loan, net of debt issuance costs of $8 and $14, respectively

  61,006   11,601 

Total debt

 $261,006  $48,557 

Less: amounts due within one year

  58,000   3,571 

Total amounts due after one year, net

 $203,006  $44,986 

 

In March of 2026, the Company entered into a $350 million senior secured credit facility consisting of a $200 million five-year term loan and a $150 million revolving credit facility.  The Company is required to make quarterly amortization payments of $2.5 million against the term loan, with the balance of the term loan due at maturity on March 24, 2031.  The revolving credit facility is also scheduled to expire on March 24, 2031. Interest on the term loan and any loans made under the revolving credit facility is based on the Secured Overnight Financing Rate (“SOFR”) or a customary base rate (which may include Daily Simple SOFR or the Prime Rate), to be determined by reference to customary market benchmarks, in each case plus an applicable margin that is anticipated to vary based on the Company’s consolidated total net leverage ratio, which is calculated to be consolidated funded debt minus unrestricted cash and cash equivalents against earnings before interest, taxes, depreciation, and amortization (“EBITDA”), as defined in the line of credit agreement.  As of March 31, 2026, the interest rate applicable to the term loan was 5.5% and the Company’s borrowing rate against its revolving line of credit was 6.2%. The increment over the SOFR borrowing rate is 250 basis points for the third quarter of fiscal year 2026. In addition to interest on outstanding amounts, the Company also pays a commitment fee on the unused balance of the revolving credit facility, fluctuates between 17.5 and 27.5 basis points based on the Company’s consolidated total net leverage ratio. Under the terms of the credit agreement, the Company is required to comply with a financial covenant that limits the ratio of indebtedness and unrestricted cash to EBITDA measured on a quarterly basis, with a maximum net leverage ratio of 4.00 to 1.00 at closing, which then steps down  to 3.75 to 1.00 in the fiscal quarter ending December 31, 2026 and further to 3.50 to 1.00 in the fiscal quarter ending September 30, 2027. The Company is also required to maintain an interest coverage ratio, measured on a quarterly basis, equal to or above the minimum set forth in the agreement, which as of closing was 1.15 to 1.00. As of March 31, 2026, there was $88.9 million available for borrowing under the revolving credit facility for general business purposes.

 

The Company is in compliance with all of its loan covenants as of March 31, 2026.