v3.26.1
DEBT AND CREDIT FACILITIES
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
DEBT AND CREDIT FACILITIES DEBT AND CREDIT FACILITIES
Senior Notes Due 2026

The components of our Senior Notes due 2026 are as follows:
6.50% (1)
(in thousands)March 31, 2026December 31, 2025
Senior Notes due 2026
$69,793 $84,792 
Unamortized deferred financing costs(692)(919)
Net debt balance$69,101 $83,873 
(1) The 6.50% Senior Notes mature in December 2026 and is included in Current senior notes in the Condensed Consolidated Balance Sheets at March 31, 2026 and December 31, 2025. As of March 31, 2026 the 6.50% Senior Notes bear an effective interest rate of 7.9%.

During the three months ended March 31, 2026, we repurchased $15.0 million of our 6.50% Senior Notes.

Senior Notes Due 2030

The components of our Senior Notes due 2030 are as follows:

8.75% (1)
(in thousands)March 31, 2026December 31, 2025
Senior Notes due 2030
$129,473 $129,473 
Unamortized deferred financing costs(5,560)(5,867)
Unamortized premium
25,356 27,364 
Net debt balance$149,269 $150,970 
(1) The 8.75% Senior Notes mature in June 2030 and is included in Senior Notes due 2030 in the Condensed Consolidated Balance Sheets at March 31, 2026 and December 31, 2025. As of March 31, 2026 the 8.75% Senior Notes bear an effective interest rate of 5.3%.

In May 2025, we completed privately negotiated exchange transactions (the "Exchanges") in which we issued $100.7 million aggregate principal amount of newly-issued 8.75% Senior Secured Second Lien Notes due 2030 as consideration for $84.0 million aggregate principal amount of our 8.125% Senior Notes and $47.8 million aggregate principal amount of our 6.50% Senior Notes. As a result of the Company's financial situation as a going concern entity at the time of refinancing, and the fact the creditors had granted concessions, the Exchanges were accounted for as a troubled debt restructuring. Therefore, the Company recognized the difference between the face value of the original Senior Notes due 2026 and the face value of the 8.75% Senior Notes as debt premium, which is amortized using the effective interest method over the 5-year term through May 2030.
Credit Agreement with Axos

We entered into the Credit Agreement in January 2024, with certain of our subsidiaries as guarantors, the lenders party thereto from time to time and Axos, as administrative agent, swingline lender and letter of credit issuer.

The Credit Agreement provides for an up to $150.0 million asset-based Credit Facility, including a $100.0 million letter of credit sublimit. Our obligations under the Credit Agreement are guaranteed by certain of our domestic and foreign subsidiaries. B. Riley originally provided a guaranty of payment with regard to our obligations under the Credit Agreement; however, this guaranty is no longer in place due to the Tenth Amendment as further described below. We used and expect to use the proceeds and letter of credit availability under the Credit Agreement to (i) provide for working capital needs, (ii) provide cash collateral to secure letters of credit to be issued under the Credit Agreement and (iii) provide for general corporate purposes.

The Credit Agreement has a maturity date of January 18, 2028 as amended by the Tenth Amendment. The interest rates applicable under the Credit Agreement are: (i) with respect to SOFR Loans, (a) SOFR plus 5.25% if the outstanding principal amount of loans is equal to or less than $100.0 million or (b) SOFR plus 4.00% if the outstanding principal amount of loans is
greater than $100.0 million; (ii) with respect to Base Rate Loans, the greater of (a) the Federal Funds Rate plus 2.00% plus the Applicable Margin, (b) the prime rate as designated by Axos plus the Applicable Margin and (c) Daily Simple SOFR plus 1.00% plus the Applicable Margin; and (iii) with respect to the default rate under the Credit Agreement, the then-existing interest rate plus 2.00%.

In connection with the Credit Agreement, we are required to pay (i) a commitment fee equal to 0.50% per annum multiplied by the positive difference by which the Aggregate Revolving Commitments exceed the Total Revolvings Outstanding (as defined in the Credit Agreement), subject to adjustment, (ii) a facility fee equal to the Applicable Margin for SOFR Loans multiplied by the positive difference by which the actual daily amount of L/C Obligations the Administrative Agent is then holding Specified Cash Collateral exceeds the actual daily Outstanding Amount of Revolving Loans, and (iii) a collateral monitoring fee of $1,000 per month. We are permitted to prepay all or any portion of the loans under the Credit Agreement prior to maturity, subject to the payment of an early termination fee. The Credit Agreement requires mandatory prepayments under certain circumstances, including in the event of an overadvance.

The obligations under the Credit Agreement are secured by substantially all assets of B&W and each of the guarantors, in each case subject to intercreditor arrangements. The Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar financings. The Credit Agreement requires us to comply with certain financial maintenance covenants, including a quarterly fixed charge coverage test, a quarterly total net leverage ratio test, a cash repatriation covenant, a minimum liquidity covenant, an annual cap on maintenance capital expenditures and a limit on unrestricted cash.

The Credit Agreement also contains customary events of default (subject, in certain instances, to specified grace periods) including, but not limited to, the failure to make payments of interest or premium, if any, on, or principal under the Credit Agreement, the failure to comply with certain covenants and agreements specified in the Credit Agreement, defaults in respect of certain other indebtedness, and certain events of insolvency. If any event of default occurs, Axos may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the Credit Agreement may become due and payable immediately. At March 31, 2026, after giving consideration to the Amendments to the Credit Agreement, we are in compliance with all financial and other covenants contained in the Credit Agreement.

The key terms of the Credit Agreement described above reflect the various amendments completed since the original Credit Agreement was entered into and reflect changes in the Company's capital structure, borrowing base, collateral requirements and financial covenant levels. These amendments addressed, among other items, (i) authorization of specified asset dispositions, (ii) adjustments to borrowing base components, including increases in inventory valuation percentages and changes to PBGC reserve requirements, (iii) temporary and permanent modifications to minimum liquidity thresholds, (iv) deferral or modification of certain covenant ratios, (v) add‑backs related to discontinued operations and capital expenditures for covenant calculations and (vi) updates to maturity provisions tied to the refinancing or repayment of other outstanding debt instruments.

On February 25, 2026, the Company with certain subsidiaries of the Company as guarantors, B. Riley, and the lenders party to the Credit Agreement with Axos, as administrative agent, entered into the Tenth Amendment to the Credit Agreement. Pursuant to the Tenth Amendment, Axos and the Lenders party to the Credit Agreement consented to amend certain provisions of the Credit Agreement to, among other things, (i) increase the amounts available to be borrowed based on inventory and receivables in the borrowing base under the Credit Agreement; (ii) extend the maturity date of the Credit Agreement to January 18, 2028; (iii) suspend the PBGC Reserve (provided that the PBGC Reserve shall be re-imposed in the amount of $3.0 million on January 1, 2027 unless the Company has provided evidence to Axos that the $3.0 million installment due to the PBGC on or prior to September 15, 2026 has been paid); (iv) modify the covenants relating to deposit account control agreements and institutions to allow for certain holdings in foreign currencies; and (v) release B. Riley as a specified guarantor thereunder.

At March 31, 2026, we had a total of $37.9 million outstanding on the Credit Agreement, all of which is drawn on the letter of credit portion of the agreement. At March 31, 2026, cash collateralizing the letters of credit totaling $37.9 million is classified as Current and Long-term restricted cash included in the Condensed Consolidated Balance Sheets.
A summary of usage of letters of credit under domestic facilities is as follows:

(in thousands)March 31, 2026December 31, 2025
Letters of credit under domestic facilities:
Performance letters of credit$27,890 $45,236 
Financial letters of credit13,341 14,365 
Total outstanding$41,231 $59,601 
Backstopped letters of credit$5,096 $7,194 
Surety backstopped letters of credit2,017 16,452 
Letters of credit subject to currency revaluation24,550 27,105 

Other Letters of credit, bank guarantees and surety bonds

Certain of our subsidiaries, that are primarily outside of the United States, have credit arrangements with various commercial banks and other financial institutions for the issuance of letters of credit and bank guarantees in association with contracting activity.

We have posted surety bonds to support contractual obligations to customers relating to certain contracts. We utilize bonding facilities to support such obligations, but the issuance of bonds under those facilities is typically at the surety's discretion. These bonds generally indemnify customers should we fail to perform our obligations under our applicable contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds the underwriters issue in support of some of our contracting activity.

The following table provides a summary of outstanding letters of credit issued outside of the domestic facilities and outstanding surety bonds:

(in thousands)March 31, 2026December 31, 2025
Letters of credit under non-domestic facilities$5,204 $6,545 
Surety Bonds 255,689 253,407 
Our ability to obtain and maintain sufficient capacity under our current debt facilities is essential to allow us to support the issuance of letters of credit, bank guarantees and surety bonds. Without sufficient capacity, our ability to support contract security requirements in the future will be diminished.

Other Loans Payable

As of March 31, 2026 and December 31, 2025, we had loans payable of approximately $8.4 million, net of debt issuance costs of $0.5 million, related to sale-leaseback financing transactions.

As of March 31, 2026 and December 31, 2025, we had loans payable of $5.0 million owed to the State of West Virginia relating to our BrightLoop™ project. The loan will be forgiven in full when certain employment and capital expenditure milestones are met during the course of project.
Interest expense in the Condensed Consolidated Financial Statements consisted of the following components:

Three Months Ended March 31,
(in thousands)20262025
Components associated with borrowings from:
Senior Notes due 2026$1,172 $6,320 
Senior Notes due 20302,832 — 
Credit Agreement3 1,168 
4,007 7,488 
Components associated with amortization or accretion of:
Credit Agreement230 1,609 
Senior Notes due 2026227 656 
Senior Notes due 2030(1,701)— 
(1,244)2,265 
Components associated with interest from:
Lease liabilities562 591 
Letter of Credit interest1,406 452 
Other interest expense39 246 
Capitalized interest(322)— 
1,685 1,289 
Total interest expense$4,448 $11,042