v3.26.3
Long-Term Debt and Loan Agreements
 9 Months Ended
Sep. 30, 2026
Debt Disclosure [Abstract]  
Long-Term Debt and Loan Agreements

11. Long-Term Debt and Loan Agreements

Long-term debt consisted of the following:

 

 

September 30,

 

 

December 31,

 

 

 

2026

 

 

2025

 

Revolving Credit Facility

 

$

43,468

 

 

$

—

 

Term Loan - Amendment No. 2

 

 

250,000

 

 

 

—

 

Term Loan A

 

 

—

 

 

 

351,000

 

 

 

 

293,468

 

 

 

351,000

 

Less unamortized deferred financing costs

 

 

1,431

 

 

 

5,189

 

 

 

 

292,037

 

 

 

345,811

 

Less current portion long-term debt

 

 

12,429

 

 

 

34,601

 

Long-term debt

 

$

279,608

 

 

$

311,210

 

 

On July 28, 2026, the Company entered into Amendment No. 2 to the Seventh Amended and Restated Loan Agreement (“Amendment No. 2”), which amended the Amendment No. 1 to the Seventh Amended and Restated Loan Agreement ("Amendment No. 1") dated February 8, 2024, which amended the Seventh Amended and Restated Loan Agreement dated September 29, 2022 (collectively, the "Amended Loan Agreement"). Amendment No. 2, among other things, extended the Revolving Credit Facility (defined below) for five years and replaced Term Loan A (defined below) with a new five-year, $250 million term loan (the “Term Loan”). The Revolving Credit Facility and the Term Loan both mature on July 28, 2031. Under the Amended Loan Agreement, the Term Loan will amortize in quarterly installment payments in an aggregate annual amount equal to five percent (5%) of the original principal amount of the Term Loan. The Term Loan may be voluntarily prepaid at any time, in whole or in part, without penalty or premium, however, all amounts repaid or prepaid in respect of the Term Loan may not be reborrowed. Amendment No. 2 reduced and harmonized the applicable spread for interest charged on both the Revolving Credit Facility and the Term Loan. Amendment No. 2 maintained the two most restrictive financial covenants: 1) the Interest Coverage Ratio with an unchanged minimum level of 3.00 to 1; and 2) the Net Leverage Ratio with an increased maximum level of 3.50 to 1 and provided for the Company's option to elect a four quarter holiday of 4.00 to 1 following a Material Acquisition as defined in the Amended Loan Agreement.

 

Amendment No. 2 also provided for a revolving credit facility in an aggregate committed principal amount of $250 million, which includes a letter of credit subfacility and swingline subfacility (the "Revolving Credit Facility"). In connection with Amendment No. 2, the Company evaluated the financing transactions on a lender-by-lender basis and accounted accordingly for debt extinguishment and debt modification costs, for the portion of the transactions that did not meet the accounting criteria for debt extinguishment. As a result the Company recognized a loss on debt extinguishment, for the quarter and nine months ended September 30, 2026, of $3.5 million, of which $3.3 million was related to Term Loan A and $0.1 million was related to the Revolving Credit Facility. In connection with Amendment No. 2, the Company recognized deferred financing fees of $1.7 million, of which $0.8 million was related to the Term Loan and included in Long-term debt and Long-term debt - current portion and $0.8 million was related to the Revolving Credit Facility and included in Other assets (long-term). These deferred financing fees, in addition to the portion of the previously unamortized deferred financing fees that were not extinguished, are being amortized to Interest expense through maturity. Remaining deferred financing fees on the Revolving Credit Facility were $1.2 million and $0.8 million as of September 30, 2026 and December 31, 2025, respectively and remaining unamortized deferred financing costs under the Term Loan and Term Loan A totaled $1.4 million and $5.2 million as of September 30, 2026 and December 31, 2025, respectively.

 

Amendment No. 1, among other things, permitted the acquisition of Signature Systems and provided a 5-year $400 million term loan facility (“Term Loan A”). In connection with Amendment No. 1, the Company incurred deferred financing fees of $9.2 million.

As of September 30, 2026, the Company had $201.2 million available under the Amended Loan Agreement, which is available for the ongoing working capital requirements of the Company and its subsidiaries and for general corporate purposes. The Company had $5.3 million of letters of credit issued related to insurance and other contracts requiring financial assurance in the ordinary course of business. Borrowings under the Amended Loan Agreement bear interest at the Term SOFR, RFR, SONIA, EURIBOR and CORRA-based borrowing rates plus an applicable margin, which under Amendment No. 2 ranges from 125 basis points to 225 basis points depending on the Company's net leverage ratio (defined below). Amounts borrowed under the Amended Loan Agreement are secured by pledges to all of the Company's assets (except with respect to certain assets that are customarily excluded for the incurrence of such liens).

The weighted average interest rate on borrowings under the Company’s long-term debt was 6.70% and 8.04% for the quarters ended September 30, 2026 and 2025, respectively, and 7.33% and 7.85% for the nine months ended September 30, 2026 and 2025, respectively, which includes a quarterly facility fee on the used and unused portion, as well as amortization of deferred financing costs.

As of September 30, 2026, the Company was in compliance with all of its debt covenants associated with its Amended Loan Agreement. The most restrictive financial covenants for all of the Company’s debt are a net leverage ratio (defined as net debt divided by earnings before interest, taxes, depreciation and amortization, as adjusted) and an interest coverage ratio (defined as earnings before interest, taxes, depreciation and amortization, as adjusted, divided by interest expense). The financial covenants under the Amended Loan Agreement are calculated in accordance with definitions set forth in the agreement and are used solely for purposes of assessing compliance with such covenants. These measures should not be considered measures of operating performance or liquidity under GAAP.

On May 2, 2024, the Company entered into an interest rate swap agreement to mitigate the variable interest rate risk of borrowings under the Amended Loan Agreement. The swap has a beginning notional value of $200.0 million and a final maturity date of January 31, 2029. At September 30, 2026, the remaining notional value of the Company's interest rate swap totaled $170.0 million. The swap is designated as a cash flow hedge and effectively results in a fixed rate of 4.606% plus the applicable margin for the hedged debt, as described above and in Note 1.