Note 10 - Debt |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2026 | |||
| Notes to Financial Statements | |||
| Debt Disclosure [Text Block] |
The Company's Credit Agreement provides for the Revolver with aggregate commitments of up to $400.0 million. The Revolver matures on September 1, 2028. Borrowings under the Revolver bear interest at variable rates based on SOFR (daily simple or term) or a base rate, plus an applicable margin, as provided in the Credit Agreement, and the Company may also be required to pay customary fees in accordance with the Credit Agreement.
On June 4, 2026, the Company entered into a Limited Consent and Fifth Amendment Agreement to the CSA, which, among other things, (i) provided a one-time limited consent related to certain hedge agreements and (ii) eliminated the requirement to maintain control agreements over the deposit accounts and securities accounts of any Company.
At June 30, 2026, the Company had no outstanding borrowings under the Revolver and $400.0 million of unused availability. At December 31, 2025, outstanding borrowings under the Revolver amounted to $197.5 million, and unused availability under the Revolver was $202.5 million. The Company incurred $1.8 million and $4.0 million of interest expense during the three months ended June 30, 2026 and 2025, respectively, and $4.3 million and $8.1 million during the six months ended June 30, 2026 and 2025 respectively, in connection with interest due on its outstanding borrowings under the CSA during each period, including the effects of the 2021 Swaps discussed in Note 9, "Derivative Instruments and Hedging Activities", and amortization of deferred financing costs.
As of December 31, 2025, the Company’s borrowings consisted of (i) a $60.0 million SOFR-based borrowing that, after giving effect to the 2021 interest rate swaps, effectively bore interest at an average rate of 2.59% and (ii) a $137.5 million variable-rate tranche that bore interest at SOFR plus the applicable credit spread in accordance with the Credit Agreement. For comparability, the Company also presents the weighted-average effective interest rates on its borrowings after giving effect to the 2021 interest rate swaps: the weighted-average effective rate on the variable-rate tranche was 3.63% as of December 31, 2025, and the weighted-average effective rate on total borrowings (fixed and variable) was 4.42% as of December 31, 2025. The stated variable rate in effect at December 31, 2025 (before the impact of the swap) was 5.21%.
Deferred financing costs incurred in connection with obtaining or modifying recognized debt obligations are capitalized and presented in the consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability. These deferred costs are amortized to interest expense over the contractual term of the related debt using the effective interest method or a method that approximates the effective interest method.
The CSA contains customary representations and warranties, covenants and events of default. In addition, the CSA contains financial covenants that measure (i) the ratio of the Company’s total funded indebtedness, on a consolidated basis, less the aggregate amount of all unencumbered cash and cash equivalents, to the amount of the Company’s consolidated EBITDA, in each case as defined and calculated in accordance with the CSA, and (ii) the ratio of the amount of the Company’s consolidated EBITDA to the Company’s consolidated fixed charges (or the “Fixed Charge Coverage Ratio”), in each case as defined and calculated in accordance with the CSA. If an event of default occurs, the lenders under the CSA would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor.
At June 30, 2026, the Company was in compliance with its debt covenants, including its most restrictive covenant, the Fixed Charge Coverage Ratio.
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