Note 12 - Credit Agreements |
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| Debt Disclosure [Text Block] |
12. Credit Agreements
Short-term borrowings included in the condensed consolidated balance sheets as of June 30, 2026, and December 31, 2025, consisted of borrowings by the Company’s foreign subsidiaries on local lines of credit totaling $48,318 and $50,618, respectively. As of June 30, 2026, the weighted-average interest rate on the short-term borrowings was 6.15%.
Long-term borrowings are included in the condensed consolidated balance sheets as follows:
As of June 30, 2026, there were $4,437 of unamortized deferred financing costs associated with the New Revolving Facility (as defined below) included in operating lease and other assets in the condensed consolidated balance sheets, and $5,142 of unamortized original issue discount and deferred financing costs linked to the New Tranche A Term Loan Facility and Term Loan B Facility (as defined collectively below) included in long-term borrowings and finance lease obligations in the condensed consolidated balance sheets.
The New Tranche A Term Loan Facility and New Revolving Facility mature on July 1, 2030. The New Tranche A Term Loan Facility is repayable in quarterly installments commencing October 1, 2026, with a balloon payment due at maturity. The Term Loan B Facility matures on July 3, 2031, and is repayable in quarterly installments which commenced September 2024, with a balloon payment due at maturity. Maturities of the Company's New Tranche A Term Loan Facility, Term Loan B Facility, and New Revolving Facility outstanding on June 30, 2026, before considering original issue discount and deferred financing costs, were as follows:
The Company’s credit agreements originally provided for a
$1,200,000 Tranche B Term Loan Facility (Original Term Loan B Facility) and included a
$300,000 uncommitted incremental term loan on that facility. After several amendments, the Original Term Loan B Facility bore interest at rates based on either a base rate plus an applicable margin of
0.75% or adjusted SOFR rate plus an applicable margin of
1.75%, subject to a SOFR floor of
0.0%, and was scheduled to mature on
December 13, 2026.
In July 2024, the Company extinguished the $530,000 balance then outstanding under the Original Term Loan B Facility and replaced it with a new $500,000 Tranche B Term Loan Facility maturing on July 3, 2031 (New Term Loan B Facility and, together with the Original Term Loan B Facility, the Term Loan B Facility). The New Term Loan B Facility continues to include a $300,000 uncommitted incremental term loan on that facility. In accordance with ASC 470-50, the Company capitalized $2,991 of debt issuance costs related to this transaction. Additionally, the Company wrote-off the unamortized deferred financing costs related to the Original Term Loan B of $4,236 and expensed $625 of fees paid to creditors as a loss on refinancing of debt. The New Term Loan B Facility bears interest at the SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%, resulting in a 5.37% combined rate as of June 30, 2026.
The New Term Loan B Facility does not require an Excess Cash Flow payment (as defined in the New Term Loan B Facility credit agreement) if the Company’s net secured leverage ratio is maintained below 3.75 to 1.00. As of June 30, 2026, the Company’s net secured leverage ratio was 1.15 to 1.00, and the Company was in compliance with all covenants under the facility. There are no financial maintenance covenants on the New Term Loan B Facility.
The Company's original Tranche A Term Loan Facility provided an aggregate principal amount of $750,000 (Original Tranche A Term Loan Facility), along with a $1,250,000 revolving facility (Original Revolving Facility), with all LIBOR provisions replaced with SOFR provisions. The Original Tranche A Term Loan Facility and the Original Revolving Facility bore interest at a rate based on adjusted SOFR plus an applicable margin between 1.25% and 1.75%, depending on the Company's total leverage ratio and subject to a SOFR floor of 0.0%.
On July 1, 2025, the Company amended the Original Tranche A Term Loan Facility and Original Revolving Facility (Prior Amended Credit Agreement), extending the maturity of both to July 1, 2030, revising the Original Tranche A Term Loan Facility outstanding principal balance to $700,000 (New Tranche A Term Loan Facility), reducing the Original Revolving Facility borrowing capacity to $1,000,000 (New Revolving Facility) (collectively the New Credit Agreements), and redefined the Term Benchmark (as defined in the Prior Amended Credit Agreement) to replace the Adjusted Term SOFR Rate (as defined in the Prior Amended Credit Agreement) with the Term SOFR Rate (as defined in the New Credit Agreement), resulting in an interest rate reduction of 0.10%. Except for redefining the Term Benchmark, interest rates for the New Credit Agreements remain unchanged from the original credit agreements. As of June 30, 2026, the interest rate for the New Tranche A Term Loan Facility and the New Revolving Facility is 4.87%. In accordance with ASC 470-50, the Company capitalized $5,275 of debt issuance costs related to this transaction. Additionally, the Company wrote-off certain unamortized deferred financing costs related to the Original Revolving Facility of $443 and expensed $782 of third-party fees as a loss on refinancing of debt.
Both the New Tranche A Term Loan Facility and the New Revolving Facility contain certain financial covenants that require the Company to maintain a total leverage ratio below 3.75 to 1.00, as well as an interest coverage ratio above 3.00 to 1.00. As of June 30, 2026, the Company’s total leverage ratio was 1.20 to 1.00, and the Company's interest coverage ratio was 15.72 to 1.00. The Company was also in compliance with all other covenants of the New Credit Agreements as of June 30, 2026.
The New Term Loan B Facility, New Tranche A Term Loan Facility and New Revolving Facility are guaranteed by substantially all of the Company’s wholly-owned domestic restricted subsidiaries and are secured by associated collateral agreements which pledge a first priority lien on virtually all of the Company’s assets, including fixed assets and intangibles, cash, trade accounts receivable, inventory, and other current assets and proceeds thereof.
As of June 30, 2026, there were no amounts outstanding under the New Revolving Facility, leaving $999,250 of unused capacity, net of outstanding letters of credit.
See Item 7A of the Annual Report on Form 10-K for the year ended December 31, 2025, for further information on interest rate swaps that are currently outstanding that partially offset the interest expense associated with the above outstanding borrowings.
Also see Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2025, for further information on finance lease obligations.
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