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Note 12 - Credit Agreements
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

12.

Credit Agreements

 

Short-term borrowings included in the consolidated balance sheets as of December 31, 2024, and December 31, 2023, consisted of borrowings by the Company’s foreign subsidiaries on local lines of credit totaling $55,848 and $81,769, respectively. As of December 31, 2024, and December 31, 2023, the weighted-average interest rates on the short-term borrowings were 5.44% and 6.54%, respectively. 

 

Long-term borrowings are included in the consolidated balance sheets as follows:

 

  

December 31,

 
  

2024

  

2023

 

Tranche A Term Loan

 $712,500  $745,313 

Tranche B Term Loan

  498,750   530,000 

Original issue discount and deferred financing costs

  (8,203)  (12,685)

Revolving Facility

  -   150,000 

Finance lease obligation

  66,355   71,308 

Other

  8,972   9,512 

Total

  1,278,374   1,493,448 

Less: current portion of debt

  60,753   42,110 

Less: current portion of finance lease obligation

  6,845   3,785 

Total long-term borrowings and finance lease obligations

 $1,210,776  $1,447,553 

 

Both the Tranche A Term Loan Facility and Revolving Facility mature on June 29, 2027. The Tranche A Term Loan Facility is repayable in quarterly installments commencing September 2023, with a balloon payment due June 2027. The Tranche B Term Loan Facility matures on July 3, 2031, and is repayable in quarterly installments commencing September 2024, with a balloon payment due July 2031. Maturities of the Company's Tranche A Term Loan Facility, Tranche B Term Loan Facility, and Revolving Facility outstanding on  December 31, 2024, before considering original issue discount and deferred financing costs, are as follows:

 

  

Tranche A Term Loan Facility

  

Tranche B Term Loan Facility

  

Revolving Facility

  

Total

 

2025

 $46,875  $5,000  $-  $51,875 

2026

  65,625   5,000   -   70,625 

2027

  600,000   5,000   -   605,000 

2028

  -   5,000   -   5,000 

2029

  -   5,000   -   5,000 

2030

  -   5,000   -   5,000 

2031

  -   468,750   -   468,750 

Total

 $712,500  $498,750  $-  $1,211,250 

 

Prior to June 2022, the Company’s credit agreements provided for a $1,200,000 Tranche B Term Loan Facility (Original Term Loan B Facility) and included a $300,000 uncommitted incremental term loan on that facility. After several amendments, the Original Term Loan B Facility bore interest at rates based on either a base rate plus an applicable margin of 0.75% or adjusted SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%, and was scheduled to mature on December 13, 2026. The Company’s credit agreements also provided for a senior secured ABL revolving credit facility (ABL Facility). ABL Facility borrowings initially bore interest at rates based on either a base rate plus an applicable margin of 1.00% or adjusted LIBOR rate plus an applicable margin of 2.00%, in each case, subject to adjustments based on average availability under the ABL Facility. 

 

In June 2022, the Company amended and restated its existing credit agreements (Amended Credit Agreement) that resulted in a new term loan facility in an aggregate principal amount of $750,000 (Tranche A Term Loan Facility), established a new $1,250,000 revolving facility (Revolving Facility), terminated the former ABL Facility, and replaced all LIBOR provisions with SOFR provisions. Proceeds received by the Company from the Tranche A Term Loan Facility were used to retire the Company's former ABL Facility and to make a $250,000 voluntary prepayment on the original Term Loan B Facility, with the remaining funds used for future general corporate purposes. As a result of these prepayments, the Company wrote off $3,546 of original issue discount and deferred financing costs during the second quarter of 2022 as a loss on extinguishment of debt. Additionally, in accordance with ASC 470-50, the Company capitalized $10,330 of fees paid to creditors as deferred financing costs on long-term borrowings and expensed $800 of transaction fees. The Company evaluated on a lender-by-lender basis if the debt related to returning lenders on the Revolving Facility was significantly modified or not, resulting in the write-off of $197 unamortized deferred financing costs related to the former ABL Facility as a loss on extinguishment of debt.

 

During 2022, the Tranche A Term Loan Facility and the Revolving Facility bore interest at a rate based on adjusted SOFR plus an applicable margin of 1.5% through December 31, 2022, subject to a SOFR floor of 0.0%. Beginning on January 1, 2023, the Tranche A Term Loan Facility and the Revolving Facility bear interest at a rate based on adjusted SOFR plus an applicable margin between 1.25% and 1.75%, based on the Company's total leverage ratio and subject to a SOFR floor of 0.0%. As of December 31, 2024, the interest rates for the Tranche A Term Loan Facility and Revolving Facility are 6.15% and 6.19%, respectively.

 

In July 2024, the Company extinguished the $530,000 balance then outstanding under the former Tranche B Term Loan Facility and replaced it with a new $500,000 Tranche B Term Loan Facility maturing on July 3, 2031. The new Tranche B Term Loan Facility continues to include a $300,000 uncommitted incremental term loan on that facility. In accordance with ASC 470-50, the Company capitalized $2,991 of debt issuance costs. Additionally, the Company wrote-off $4,236 of unamortized deferred financing costs related to the former Tranche B Term Loan Facility and expensed $625 of fees paid to creditors as a loss on extinguishment of debt. The new Tranche B Term Loan Facility bears interest at the adjusted SOFR rate plus an applicable margin of 1.75%, subject to a SOFR floor of 0.0%. As of December 31, 2024, the interest rate for the Tranche B Term Loan Facility is 6.34%.

 

The Tranche A Term Loan Facility and the Revolving Facility contain certain financial covenants that require the Company to maintain a total leverage ratio below 3.75 to 1.00, an interest coverage ratio above 3.00 to 1.00, and may require an excess cash flow payment. As of December 31, 2024, the Company’s total leverage ratio was 1.33 to 1.00, and the Company's interest coverage ratio was 10.03 to 1.00. The Company also was not required to make an excess cash flow payment as of December 31, 2024. The Company was also in compliance with all other covenants of the Amended Credit Agreement as of December 31, 2024.

 

The Tranche B Term Loan Facility, Tranche A Term Loan Facility and Revolving Facility are guaranteed by substantially all of the Company’s wholly-owned domestic restricted subsidiaries and are secured by associated collateral agreements which pledge a first priority lien on virtually all of the Company’s assets, including fixed assets and intangibles, cash, trade accounts receivable, inventory, and other current assets and proceeds thereof. 

 

As of December 31, 2024, there were no borrowings under the Revolving Facility, leaving $1,249,203 of unused capacity, net of outstanding letters of credit.