v3.26.3
Debt
 9 Months Ended
Sep. 30, 2026
Debt Disclosure [Abstract]  
Debt Debt
Long-term debt consists of the following obligations as of:
(in thousands)September 30, 2026December 31, 2025
PNC Term Loan Facility – term loan payable in quarterly installments of principal, plus interest through September 203150,000 — 
PNC Revolving Credit Facility
75,000 — 
Wintrust Revolving Loans— 10,000 
Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 3.06% to 8.60% through 2032
24,540 20,570 
Financing liability5,351 5,351 
Total debt154,891 35,921 
Less – Current portion of long-term debt(8,961)(5,031)
Less – Unamortized discount and debt issuance costs(633)(354)
Long-term debt$145,297 $30,536 
PNC Credit Facility
On September 9, 2026 (the “PNC Closing Date”), LFS, LHLLC, and other designated parties entered into a credit agreement with PNC Bank, National Association (“PNC”), as administrative agent, and other lenders party thereto (the “PNC Credit Agreement”), which provides for aggregate commitments of up to $300.0 million (the “PNC Credit Facility”), consisting of:
(i)    a revolving credit facility with an aggregate principal amount of $200.0 million (the “PNC Revolving Credit Facility”), including a $20.0 million swingline loan subfacility and a $25.0 million letter of credit subfacility;
(ii)    a term loan facility with an aggregate principal amount of $50.0 million (the “PNC Term Loan Facility”); and
(iii)    a delayed draw term loan facility with aggregate commitments of $50.0 million (the “PNC DDTL Facility”).
The revolving credit facility and term loan facility mature on September 9, 2031. Subject to the provisions of the PNC Credit Agreement, commitments under the delayed draw term loan facility remain available through March 9, 2028. Subject to specified conditions and lender commitments, the PNC Credit Agreement also permits incremental credit facilities and commitment increases of up to the greater of $150.0 million and 100% of Consolidated EBITDA.
The obligations under the PNC Credit Agreement are guaranteed by the Company, LHLLC and certain subsidiaries and are secured by substantially all assets of LFS and the guarantors, subject to customary exceptions.
Subject to the provisions of the PNC Credit Agreement, borrowings under the PNC Credit Facility bear interest, at LFS's option, at either
(i) a base rate plus an applicable margin ranging from 0.50% to 1.50%; or
(ii) Term SOFR plus an applicable margin ranging from 1.50% to 2.50%,
with applicable margins determined by reference to LFS's Consolidated Net Leverage Ratio. The PNC Credit Agreement includes commitment fees on the unused portions of the PNC Revolving Credit Facility and the PNC DDTL Facility at a rate ranging from 0.20% to 0.35% per annum.
The PNC Term Loan Facility is repayable in quarterly principal installments beginning December 31, 2026, with the remaining outstanding principal due at maturity.
The PNC Credit Agreement contains customary affirmative and negative covenants, representations and warranties and events of default, including financial covenants requiring LFS to maintain (i) a maximum Consolidated Net Leverage Ratio of 3.00 to 1.00 and (ii) a minimum Consolidated Fixed Charge Coverage Ratio of 1.15 to 1.00. The maximum Consolidated Net Leverage Ratio may be increased to 3.50 to 1.00 for four consecutive fiscal quarters following certain qualifying acquisitions.
The Company incurred approximately $1.8 million in debt issuance costs in connection with the PNC Credit Agreement. Debt issuance costs attributable to the funded PNC Term Loan Facility are presented as a direct deduction from the related debt balance. Debt issuance costs attributable to the PNC Revolving Credit Facility are included in other noncurrent assets and amortized over the term of the facility. Debt issuance costs attributable to the undrawn PNC DDTL Facility are included in other noncurrent assets and will be reclassified as a reduction of the carrying amount of the related debt to the extent borrowings are made. As of September 30, 2026, approximately $0.3 million of unamortized debt issuance costs attributable to the undrawn PNC DDTL Facility were included in other noncurrent assets.
In connection with entering into the PNC Credit Agreement, on the PNC Closing Date, the Company terminated its prior Wintrust credit facility and repaid approximately $118.1 million of outstanding borrowings using proceeds from the PNC Credit Facility. The Company recorded a loss on extinguishment of debt of approximately $0.2 million related to the write-off of unamortized debt issuance costs associated with the terminated facility.
As of September 30, 2026, the Company had $75.0 million in borrowings outstanding under the PNC Revolving Credit Facility and $50.0 million outstanding under the PNC Term Loan Facility, with a weighted average annual interest rate of 5.50% and 5.50%, respectively. Remaining availability under the PNC Revolving Credit Facility was $125.0 million, after giving effect to outstanding borrowings. No amounts were outstanding under the PNC DDTL Facility, and the full $50.0 million commitment remained available. Of the combined $175.0 million in unused commitments, approximately $39.9 million was unavailable due to financial covenant limitations, resulting in approximately $135.1 million of available borrowing capacity as of September 30, 2026. Availability under these facilities is subject to satisfaction of the applicable borrowing conditions, including compliance with financial covenants and the absence of specified defaults.
In connection with the closing of the PNC Credit Agreement and termination of the Wheaton Bank & Trust Company, N.A., a subsidiary of Wintrust Financial Corporation (collectively, “Wintrust”) credit facility, letters of credit totaling approximately $7.0 million remained outstanding as of September 30, 2026. These letters of credit expire no later than April 2027 and will be replaced with letters of credit issued under the PNC Credit Agreement. The Company maintains cash collateral of approximately $7.0 million, which is included in restricted cash on the Company's condensed consolidated balance sheets and will be released upon termination and replacement of the related legacy letters of credit. No amounts had been drawn under these letters of credit as of September 30, 2026.
As of September 30, 2026, the Company was in compliance with all financial maintenance covenants under the PNC Credit Agreement.
As of September 30, 2026, future maturities of debt outstanding under the PNC Credit Facility are as follows (in thousands):
2026$625 
20272,500 
20282,500 
20292,500 
20302,500 
2031114,375 
Total$125,000 
Former Wintrust Revolving Credit Facility
Prior to entering into the PNC Credit Agreement, the Company maintained a senior secured revolving credit facility with Wintrust, as administrative agent, pursuant to a Second Amended and Restated Credit Agreement originally entered into on May 5, 2023 (the “Second A&R Wintrust Credit Agreement”).
On July 24, 2026, LFS, LHLLC, and certain other designated parties entered into the Third Amendment to the Second A&R Wintrust Credit Agreement with Wintrust, as administrative agent, which increased total commitments from $100.0 million to $125.0 million and modified certain pricing and other terms. The Wintrust revolving credit facility was terminated on September 9, 2026 in connection with the Company's entry into the PNC Credit Agreement.
For the period from July 1, 2026 through September 9, 2026, maximum borrowings outstanding under the Wintrust revolving credit facility were $118.1 million and average daily borrowings were $28.0 million. For the period from January 1, 2026 through September 9, 2026, maximum borrowings outstanding were $118.1 million and average daily borrowings were $20.1 million. During the three and nine months ended September 30, 2025, maximum borrowings outstanding were $50.0 million and average daily borrowings were $48.0 million and $22.8 million, respectively.
For the period from July 1, 2026 through September 9, 2026 and for the period from January 1, 2026 through September 9, 2026, borrowings under the Wintrust revolving credit facility bore weighted average annual interest rates of 5.77% and 5.64%, respectively, inclusive of the net impact of the Company's interest rate swap arrangement. For the three and nine months ended September 30, 2025, borrowings under the Wintrust revolving credit facility bore weighted average annual interest rates of 6.28% and 6.12%, respectively.
Interest Rate Swap
Prior to the termination of the Wintrust revolving credit facility, the Company maintained an interest rate swap agreement to manage its exposure to interest rate variability associated with a portion of its variable-rate debt. The swap agreement became effective on July 14, 2022 and was scheduled to mature on July 31, 2027. The swap had a notional amount of $10.0 million and effectively fixed the underlying benchmark interest rate at 3.12%, subject to the applicable credit spread under the related debt agreement. The Company did not designate the swap as a hedge for accounting purposes; accordingly, changes in the fair value of the derivative were recognized in earnings within gain (loss) on interest rate swap.
In connection with the termination of the Wintrust revolving credit facility and entry into the PNC Credit Agreement, the Company terminated the swap and received settlement proceeds of approximately $0.1 million. The Company remeasured the derivative to fair value immediately prior to settlement, recognized the resulting adjustment in earnings and derecognized the instrument upon settlement. No amounts remained outstanding under the swap as of September 30, 2026.
Sale-Leaseback Financing Transaction
On September 29, 2022, the Company completed a sale and leaseback transaction related to its facility in Pontiac, Michigan (the “Pontiac Facility”), with an aggregate transaction value of approximately $7.8 million, consisting of a purchase price of approximately $5.4 million and up to $2.4 million of tenant improvement allowances.
In connection with the transaction, the Company entered into a 25-year lease agreement with two five-year renewal options. Annual minimum rent is approximately $0.5 million, payable monthly and subject to annual escalations of approximately 2.5%. The lease includes a one-time termination option at the end of the fifteenth lease year, which would require payment of a termination fee of approximately $1.7 million if exercised.
The Company accounted for the transaction as a failed sale-leaseback and financing arrangement under ASC Topic 842 – Leases, as the lease was classified as a finance lease and control of the property did not transfer to the buyer-lessor. Accordingly, no gain or loss was recognized, and the property was not derecognized from the Company’s condensed consolidated balance sheets and continues to be recognized therein. Proceeds received were recorded as a financing liability and are repaid through lease payments, which are allocated between principal and interest.
As of September 30, 2026, the financing liability was $5.0 million, net of issuance costs, and was included within long-term debt on the Company’s condensed consolidated balance sheets. Interest expense associated with the financing for both the three and nine months ended September 30, 2026 and 2025, was approximately $0.1 million and $0.4 million, respectively.