Note 8 - Debt |
9 Months Ended | ||||
|---|---|---|---|---|---|
Sep. 30, 2026 | |||||
| Notes to Financial Statements | |||||
| Debt Disclosure [Text Block] |
8. DEBT
Revolving Credit Facility
On September 10, 2026, the Company entered into the Second Amendment to Amended and Restated Revolving Credit Agreement (the “Second Amendment”) by and among the Company, as Borrower, its domestic subsidiaries as Guarantors, certain lenders party thereto from time to time, and Truist Bank, as Administrative Agent, Issuing Bank, and Swingline Lender. The Second Amendment amends that certain Amended and Restated Revolving Credit Agreement dated October 6, 2023, as amended by that certain First Amendment to Amended and Restated Revolving Credit Agreement, dated as of March 13, 2026 (the “Prior Credit Agreement”; the Prior Credit Agreement, as amended by the Second Amendment, the “Amended Credit Agreement”).
The Amended Credit Agreement provides for revolving loans in the maximum principal amount of $50.0 million, with a $5.0 million sublimit for swingline loans and a $5.0 million sublimit for the issuance of standby letters of credit (collectively, the “Revolving Commitments”). In addition, the Amended Credit Agreement includes an accordion feature that allows the Company to increase the Revolving Commitments by a total of up to $25.0 million, subject to securing additional commitments from existing lenders or new lending institutions. The Amended Credit Agreement has a maturity date of September 10, 2031.
The Company's obligations under the Amended Credit Agreement are unsecured. In addition, if the Company forms or acquires any domestic subsidiaries, the loans and other obligations under the Amended Credit Agreement will be guaranteed by such domestic subsidiaries.
At the Company’s election, the borrowings under the Amended Credit Agreement, other than the swingline loans, bear interest at either (1) a base rate defined as the highest of (a) the rate which the Administrative Agent announces from time to time as its prime lending rate, (b) the Federal Funds Rate, plus 0.50%, (c) term secured overnight financing rate (“SOFR”) for an interest period of one month plus 1.00%, and (d) zero, plus, in each case, an applicable margin that varies with the Company's net funded debt leverage ratio; or (2) SOFR defined as the greater of (a) the forward-looking term rate based on SOFR determined for a tenor comparable to the applicable interest rate period and (b) zero, plus, in each case, an applicable margin that varies with the Company’s net funded debt leverage ratio. The Company’s borrowings under the swingline loans bear interest at the base rate plus the applicable margin. The initial applicable margin for base rate loans is 0.50% and the initial applicable margin for SOFR loans is 1.50%. The applicable margins will be adjusted quarterly, in each case two (2) business days after the Administrative Agent's receipt of the Company's quarterly financial statements.
The Company is also required to pay a commitment fee accruing on the unused Revolving Commitment, which fee varies with the Company's net funded debt leverage ratio and initially is 20 basis points per annum and a letter of credit fee, accruing at a rate per annum equal to the applicable margin for SOFR loans then in effect on the daily average amount of such lender’s letter of credit exposure.
Principal is payable in full at maturity on September 10, 2031, and there are no scheduled principal payments prior to maturity. Interest on base rate loans and swingline loans is payable quarterly in arrears, and interest on SOFR loans is payable at the end of each interest period, and in the case of interest periods longer than three months, on each day which occurs every three months after the initial date of such interest period.
The purpose of the Amended Credit Agreement is for anticipated working capital needs, new product development, permitted acquisitions (as defined in the Amended Credit Agreement), quarterly dividends, any share repurchases we may elect to make under any future share repurchase program, and capital expenditures.
The Amended Credit Agreement contains certain customary affirmative and negative covenants.
In addition, the Amended Credit Agreement requires the Company to meet certain financial tests, including, without limitation:
As of September 30, 2026, the Company was in compliance with all covenants of the Amended Credit Agreement. There were no balances outstanding on the Amended Credit Agreement as of or during the three and nine months ended September 30, 2026.
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