Debt |
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | Debt Amended Oaktree Credit Agreement Prior to April 30, 2026, the Company was party to a Credit Agreement with Oaktree Fund Administration, LLC, as administrative agent, which provided for up to $225.0 million of secured term loans funded in four tranches. The facility bore interest at rates ranging from 8.25% to 10.0% per annum, was subject to a 2% original issue discount and certain exit and prepayment fees, and was guaranteed by certain subsidiaries of the Company and secured by substantially all of the assets of the Company and the guarantor subsidiaries. The Credit Agreement contained customary affirmative and negative covenants, including minimum liquidity and revenue-based financial covenants. On April 30, 2026, or the Closing Date, the Company entered into an Amended and Restated Credit Agreement and Guaranty, or the Amended Credit Agreement, together with certain of its subsidiaries as guarantors, the lenders from time to time party thereto and Oaktree Fund Administration, LLC, as administrative agent, pursuant to which the lenders agreed to make term loans to the Company in an aggregate principal amount of up to $300.0 million, or collectively, the New Term Loans. Approximately $259.0 million of the proceeds from the initial borrowing under the Amended Credit Agreement was used to repay all outstanding obligations under the prior Credit Agreement and to pay transaction costs associated with the New Term Loans. Pursuant to the terms of the Amended Credit Agreement, the New Term Loans will be advanced in two tranches: •The first tranche, or the Tranche E Term Loan, was advanced in the amount of $265.0 million on the Closing Date. •The second tranche, or the Tranche F Term Loan, in an amount up to $35.0 million will be advanced upon the mutual consent of lenders and the Company. The New Term Loans will mature on April 30, 2031, or the Maturity Date. The New Term Loans accrue interest at a rate equal to 8.75% per annum, subject to certain conditions. Accrued interest is due and payable in cash on the last business day of March, June, September, and December of each year, commencing on the first such date to occur after the Closing Date; provided, however, that prior to the first anniversary of the Closing Date, the Company may pay an amount of interest on the outstanding New Term Loans corresponding to 25, 50, 75 or 100% of the interest rate in kind, subject to prior written notice delivered to the Administrative Agent. If the Company elects to pay up to 50% of the interest rate in kind for any period, the Company will incur a step-up of 0.375% for such period, which shall be payable in cash, and if the Company elects to pay more than 50% of the interest rate in kind for any period, the Company will incur a step-up of 0.500% for such period, which shall be payable in cash. Further, the applicable interest rate will step down by 0.25% upon the Company’s achieving a gross leverage ratio of less than 4.0 to 1.0. Each of the New Term Loans will be subject to an original issue discount of 1% of the principal amount thereof upon the drawing of each applicable tranche. Upon any payment or prepayment in full or in part of the New Term Loans, whether voluntary or involuntary, the Company is required to pay an exit fee equal to 1.0% of the principal amount of the New Term Loan paid, or the New Exit Fee. The Company may elect to prepay all or any portion of the amounts owed prior to the Maturity Date, provided that the Company provides notice to the Administrative Agent, the amount is not less than $5,000,000, and the amount is accompanied by all accrued and unpaid interest thereon through the date of prepayment, plus the applicable yield protection premium and the applicable New Exit Fee. Prepayments of the New Term Loans on or prior to the second anniversary of the funding date thereof will be accompanied by a yield protection premium equal to the present value of all interest that would have accrued on the principal amount prepaid through such date (discounted at the Treasury Rate plus 50 basis points), plus 2% of the principal amount so prepaid. Prepayments of the New Term Loans after the second anniversary of the funding date thereof but on or prior to the third anniversary of such date will be accompanied by a yield protection premium equal to 2% of the principal amount so prepaid. No yield protection premium will be required for prepayments of the New Term Loans made after the third anniversary of the funding date thereof. Pursuant to the Amended Credit Agreement, the obligations of the Company are guaranteed by its subsidiaries that are party thereto as guarantors. The Amended Credit Agreement contains customary affirmative and restrictive covenants and representations and warranties. The Company and its subsidiaries are bound by certain affirmative covenants setting forth actions that are required during the term of the Amended Credit Agreement, including, without limitation, certain information delivery requirements, obligations to maintain certain insurance, and certain notice requirements. Additionally, the Company and its subsidiaries are bound by certain restrictive covenants setting forth actions that are not permitted to be taken during the term of the Amended Credit Agreement without prior written consent, including, without limitation, incurring certain additional indebtedness, consummating certain mergers, acquisitions or other business combination transactions, or incurring any non-permitted lien or other encumbrance on the assets of the Company or any of its subsidiaries. The Amended Credit Agreement also contains other customary provisions, such as confidentiality obligations and indemnification rights for the benefit of Lenders. The Amended Credit Agreement also contains financial covenants requiring (a) the Company to maintain minimum liquidity of at least $30,000,000 and (b) minimum gross sales of the Company and its subsidiaries for each consecutive 12-month period ending on the last day of each fiscal quarter in excess of an amount set forth in the Amended Credit Agreement for such period. The Amended Credit Agreement provides for a customary equity cure right in the event the Company fails to comply with the minimum gross sales covenant. For lenders that continued as parties to the Amended Credit Agreement, the amendment was accounted for as a modification of the existing debt arrangement, and the existing unamortized debt issuance costs and debt discount related to these lenders continue to be amortized over the revised term of the facility along with new fees paid to such lenders. For new lenders replacing former lenders as parties to the Amended Credit Agreement, the amendment was accounted for as an extinguishment of the existing debt agreement resulting in the unamortized debt issuance costs and debt discount related to these lenders being written off and the new debt issuance costs and debt discount paid included in the balance of unamortized debt issuance costs and debt discount. As of June 30, 2026, the effective interest rate under the Amended Credit Agreement was 9.7%. For the period following the Closing Date through June 30, 2026, the Company elected to pay interest in kind, or PIK, on 100% of the cash interest payment resulting in a step-up cash interest rate charge of 0.5%. The election is available quarterly through the second anniversary of the Closing Date. The Company incurred $6.4 million and $5.9 million in interest expense during the three months ended June 30, 2026 and 2025, respectively, and $13.2 million and $11.7 million in interest expense during the six months ended June 30, 2026 and 2025, respectively. No principal payments are due on the New Term Loans until the final maturity date on April 30, 2031. As of June 30, 2026, $271.6 million was outstanding under the Amended Credit Agreement representing the initial principal of $265.0 million for the Tranche E Term Loan, paid in kind interest of $3.9 million accrued into the principal balance, and the $2.7 million exit fee obligation to be paid upon exiting the facility. The Company recorded the debt arrangements on the condensed consolidated balance sheets as follows:
As of June 30, 2026, the Company was in compliance with all financial debt covenants.
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