

8.	DEBT

The Company’s outstanding debt at September 30, 2019 and December 31, 2018 was as follows:



	September 30, 2019			December 31, 2018
Oaktree Facility	$	67,088		$	74,571
Notes and deferred payments to sellers (Tealstone Acquisition)	11,967			13,572
Notes payable for construction and transportation equipment	856			612
Total debt	79,911			88,755

Less - Current maturities of long-term debt	(12,238		)	(2,899		)
Less - Unamortized deferred debt costs	(5,184		)	(6,739		)
Total long-term debt, net of unamortized debt costs	$	62,489		$	79,117

Oaktree Facility—At September 30, 2019, the Company had $67,088 outstanding under an $85,000 term loan with Wilmington Trust, National Association, as agent, and the lenders party thereto (the “Oaktree Facility”). The five-year Oaktree Facility, which was set to mature in April 2022, was secured by substantially all of the assets of the Company and its subsidiaries. Interest on the Oaktree Facility was equal to the one-, two-, three- or six-month London Interbank Offered Rate, or LIBOR, plus 8.75% per annum on the unpaid principal amount of the Oaktree Facility, subject to adjustment under certain circumstances, and was generally payable monthly. There were no amortized principal payments due under the Oaktree Facility; however, the Company was required to prepay the Oaktree Facility, and in certain cases pay a prepayment premium thereon, with proceeds received from the issuances of debt or equity, transfers, events of loss and extraordinary receipts. The Company was required to make an offer quarterly to the lenders to prepay the Oaktree Facility in an amount equal to 75% of its excess cash flow, plus accrued and unpaid interest thereon and a prepayment premium. As described in Note 16, on October 2, 2019 the Company entered into a new Credit Agreement to obtain the Facilities which refinanced and extinguished the Oaktree Facility.

Notes and Deferred Payments to Sellers—At September 30, 2019, the Company had $11,967 outstanding, net of debt discounts, of the combined Promissory Notes and deferred cash payments issued as part of the Tealstone Acquisition. During the nine months ended September 30, 2019, the Company paid approximately $2,400 of the deferred cash payments. The remaining principal amounts of $5,000 of Promissory Notes and $7,500 of deferred cash payments are due on April 3, 2020. Based on a 12% discount rate, the Company recorded $11,600 as notes and deferred payments to sellers in long-term debt on its Condensed Consolidated Balance Sheet at the acquisition closing date. Accreted interest for the period was approximately $300 and $800 for the three and nine months ended September 30, 2019, respectively, and $300 and $900 for the three and nine months ended September 30, 2018, respectively, and was recorded as interest expense.

Notes Payable for Construction and Transportation Equipment—The Company has purchased and financed various construction and transportation equipment to enhance the Company’s fleet of equipment. The total long-term notes payable related to the purchase of financed equipment was approximately $900 and $600 at September 30, 2019 and December 31, 2018, respectively. The notes have payment terms ranging from 3 to 5 years and the associated interest rates range from 2.99% to 6.92%.

Compliance—The Oaktree Facility contained various covenants that limited, among other things, the Company’s ability and certain of its subsidiaries’ ability to incur certain indebtedness, grant certain liens, merge or consolidate, sell assets, make certain loans, enter into acquisitions, incur capital expenditures, make investments, and pay dividends. In addition, the Company was required to maintain the following principal financial covenants:


•	a ratio of secured indebtedness to EBITDA of not more than 1.8 to 1.00 for the trailing four consecutive fiscal quarters ending September 30, 2019 through maturity in 2022;


•	daily cash collateral of not less than $15,000;


•	gross margin in contract backlog of not less than $70,000 for the average of the trailing four consecutive fiscal quarters;


•	net capital expenditures during the trailing four consecutive fiscal quarters shall not exceed $15,000;


•	bonding capacity shall be maintained at all times in an amount not less than $1,000,000; and


•	the EBITDA of Tealstone Residential Concrete, Inc. shall not be less than $12,000 for each of the trailing four consecutive fiscal quarters.

The Company was in compliance with these covenants at September 30, 2019.