Debt |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Debt | |
| Debt | Note 4. Debt Bank Revolving Credit Notes On June 28, 2023, we entered into an amended and restated credit agreement (the Credit Agreement) with certain lenders and Wells Fargo Bank, National Association, as administrative agent (the Agent). On June 26, 2025, we entered into the First Amendment to the Credit Agreement (First Amendment) which increased the amount of total allowable borrowings under the revolving credit facility from $250,000 to $350,000, by exercising the previously available $100,000 accordion feature. All other material terms of the Credit Agreement, including applicable interest rates, remained unchanged. On February 25, 2026, we entered into the Third Amendment to the Credit Agreement (Third Amendment) which lowered the amount of total allowable borrowings under the revolving credit facility from $350,000 to $275,000 and reduced our minimum consolidated interest coverage ratio to 2.75 to 1.00, through the fourth quarter of 2026. The Third Amendment also increased our maximum consolidated leverage ratio to 5.25 to 1.00 for the first and second quarter of 2026, 5.00 to 1.00 for the third quarter of 2026, 4.00 to 1.00 for the fourth quarter of 2026 and 3.50 to 1.00 for 2027 and thereafter. As a result of these financial covenant changes, the interest pricing grid now includes additional interest rate tiers. All other material terms of the Credit Agreement remained unchanged. All amounts borrowed under the Credit Agreement (as amended by the amendments) mature on June 28, 2028. The Credit Agreement contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on our ability to, subject to certain exceptions, create, incur or assume indebtedness; create, incur, assume or suffer to exist liens; make certain investments; allow our subsidiaries to merge or consolidate with another entity; make certain asset dispositions; pay certain dividends or other distributions to shareholders; enter into transactions with affiliates; enter into sale leaseback transactions; and exceed the limits on annual capital expenditures. The Credit Agreement also requires us to satisfy certain financial covenants, including a minimum consolidated interest coverage ratio of 2.75 to 1.00, as well as a consolidated total leverage ratio not to exceed 5.25 to 1.00. The Company incurred financing costs of $818 and $397 associated with executing the First Amendment and Third Amendment, respectively. Additionally, upon executing the Third Amendment, the Company incurred a loss on extinguishment of debt of $134 associated with unamortized debt issuance costs from prior amendments to the Credit Agreement during the three and six months ended June 30, 2026. As of June 30, 2026, short-term and long-term balances of $719 and $585, respectively, were recorded in prepaid expenses and other current assets and other long-term assets in the Condensed Consolidated Balance Sheets. These deferred financing costs will be amortized over the remaining duration of the Credit Agreement. At June 30, 2026, our consolidated total leverage ratio under the Credit Agreement was 2.91 to 1.00 as compared to a covenant maximum of 5.25 to 1.00. At June 30, 2026, our consolidated interest coverage ratio under the Credit Agreement was 3.27 to 1.00 as compared to a covenant minimum of 2.75 to 1.00. Under the Credit Agreement, interest is payable quarterly at the adjusted secured overnight financing rate (SOFR) plus an applicable margin based on the current consolidated total leverage ratio (which may be adjusted for certain reserve requirements), plus 1.25% to 3.25% depending on the current consolidated total leverage ratio. Under certain circumstances, we may not be able to pay interest based on SOFR. If that happens, we will be required to pay interest at the Base Rate, which is the sum of the higher of (i) the Prime Rate (as publicly announced by the Agent from time to time), (ii) the Federal Funds Rate plus 0.50% and (iii) Adjusted Term SOFR for a one-month tenor in effect on such day plus 1.00%. The interest rate was 6.65% and 5.98% as of June 30, 2026 and December 31, 2025, respectively. Additionally, the agreement has a fee on the average daily unused portion of the aggregate unused revolving commitments. This fee was 0.35% and 0.30% as of June 30, 2026 and December 31, 2025, respectively. The Company was in compliance with all financial covenants of its Credit Agreement as of June 30, 2026 and December 31, 2025. The amount borrowed on the revolving credit notes was $125,718 and $202,525 as of June 30, 2026 and December 31, 2025, respectively. In connection with the Credit Agreement: (i) the Company has pledged, subject to certain exceptions, security interests and liens in and on (a) substantially all its respective personal property assets and (b) certain of its respective real property assets, in each case, to secure the Credit Agreement and related obligations; and (ii) certain of the Company’s subsidiaries have guaranteed the Company’s obligations under the Credit Agreement. The Credit Agreement contains customary events of default. If an event of default under the Credit Agreement occurs, then, the lenders may declare any outstanding obligations under the Credit Agreement to be immediately due and payable and exercise rights and remedies against the pledged collateral. Other Debt Additionally, the Company has a Fond du Lac County and Fond du Lac Economic Development Corporation term note (Fond du Lac Term Note). The Fond du Lac Term Note is secured by a security agreement, payable in annual installments of $500 plus interest at 2.00% and is due in full in December 2028. The balance outstanding as of June 30, 2026 and December 31, 2025 was $1,375. As of June 30, 2026 and December 31, 2025, the short-term and long-term balance was $500 and $875, respectively. These balances are recorded in other current liabilities and other long-term liabilities in the Condensed Consolidated Balance Sheets. |