v3.26.1
Long-Term Debt and Bank Facility Borrowings
 9 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Long-Term Debt and Bank Facility Borrowings

11) Long-Term Debt and Bank Facility Borrowings

The Company’s debt is as follows (in thousands):

 

 

June 30,

 

 

September 30,

 

 

 

2026

 

 

2025

 

 

 

Carrying
Amount

 

 

Fair Value (a)

 

 

Carrying
Amount

 

 

Fair Value (a)

 

Revolving Credit Facility Borrowings

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Senior Secured Term Loan (b)

 

 

172,569

 

 

 

173,250

 

 

 

188,118

 

 

 

189,000

 

Total debt

 

$

172,569

 

 

$

173,250

 

 

$

188,118

 

 

$

189,000

 

Total short-term portion of debt

 

$

21,000

 

 

$

21,000

 

 

$

21,000

 

 

$

21,000

 

Total long-term portion of debt (b)

 

$

151,569

 

 

$

152,250

 

 

$

167,118

 

 

$

168,000

 

 

(a)
The face amount of the Company’s variable rate long-term debt approximates fair value.
(b)
Carrying amounts are net of unamortized debt issuance costs of $0.7 million as of June 30, 2026, and $0.9 million as of September 30, 2025.

On September 27, 2024, the Company refinanced its five-year term loan and the revolving credit facility with the execution of the seventh amended and restated revolving credit facility agreement (the “credit agreement”) with a bank syndicate comprised of ten participants, which enables the Company to borrow up to $400 million ($475 million during the heating season of December through April of each year) on a revolving credit facility for working capital purposes (subject to certain borrowing base limitations and coverage ratios), provides for a $210 million five-year senior secured term loan (“Term Loan”), allows for the issuance of up to $25 million in letters of credit, and has a maturity date of September 27, 2029.

The Company can increase the revolving credit facility size by $200 million without the consent of the bank group. However, the bank group is not obligated to fund the $200 million increase. If the bank group elects not to fund the increase, the Company can add additional lenders to the group, with the consent of the Agent, which shall not be unreasonably withheld. Obligations under the credit agreement are guaranteed by the Company and its subsidiaries and are secured by liens on substantially all of the Company’s assets including accounts receivable, inventory, general intangibles, real property, fixtures and equipment.

All amounts outstanding under the credit agreement become due and payable on the facility termination date of September 27, 2029. The Term Loan is repayable in quarterly payments of $5.3 million, plus an annual payment equal to 25% of the annual Excess Cash Flow as defined in the credit agreement (an amount not to exceed $4.0 million annually), less certain voluntary prepayments made during the year, with final payment at maturity. The Company was not required to make additional term loan repayments due to Excess Cash Flow for the fiscal year ended September 30, 2025.

The interest rate on the revolving credit facility and the term loan is based on a margin over Adjusted Term Secured Overnight Financing Rate ("SOFR") or a base rate. At June 30, 2026, the effective interest rate on the term loan (considering the impact of interest rate hedges) and revolving credit facility borrowings was approximately 6.7% and 5.9%, respectively, compared to 7.1% and 6.4%, respectively at September 30, 2025.

The commitment fee on the unused portion of the revolving credit facility is 0.30% from December through April, and 0.20% from May through November.

The credit agreement requires the Company to meet certain financial covenants, including a fixed charge coverage ratio of 1.10 if Availability (as defined in the credit agreement) is less than the greater of (a) 12.5% of the Line Cap (lesser of the aggregate revolving commitment and the borrowing base) which was $29.1 million as of June 30, 2026, and (b) $35.0 million. In addition, as long as the Term Loan is outstanding, a senior secured leverage ratio cannot be more than 3.0 as calculated as of the quarters ending June or September, and no more than 5.5 as calculated as of the quarters ending December or March.

Certain restrictions are also imposed by the credit agreement, including restrictions on the Company’s ability to incur additional indebtedness, to pay distributions to unitholders, to pay certain inter-company dividends or distributions, repurchase units, make investments, grant liens, sell assets, make acquisitions and engage in certain other activities.

At June 30, 2026, $173.3 million of the Term Loan was outstanding, no borrowings were outstanding under the revolving credit facility, no hedge positions were secured under the credit agreement, and $3.0 million of letters of credit were issued and outstanding. At September 30, 2025, $189.0 million of the term loan was outstanding, no borrowings were outstanding under the revolving credit facility, $1.3 million hedge positions were secured under the credit agreement and $5.1 million of letters of credit were issued and outstanding.

At June 30, 2026, availability was $229.9 million, and the Company was in compliance with the financial covenants. At September 30, 2025, availability was $165.0 million, and the Company was in compliance with the financial covenants. The amount of availability is impacted by several factors, including outstanding debt, the valuation of our customer list, and accounts receivable and inventory balances. Each year, during the third quarter, the valuation of our customer list is re-evaluated based on the Company's performance.