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Debt

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt

Debt

The table below reflects the Company’s total debt, including borrowings under its credit agreement and master loan agreement for equipment notes:

(dollars in thousands)						Inception Date						Stated Interest Rate (per annum)						Payment Frequency						Term (years)						Outstanding Balance as of December 31, 2020						Outstanding Balance as of December 31, 2019
Credit Agreement
Revolving loans						9/13/2019						Variable						Variable						5						$	—					$	103,820
Equipment Notes
Equipment Note 1						9/28/2018						4.16%						Semi-annual						5						$	—					$	10,643
Equipment Note 2						9/28/2018						4.23%						Semi-annual						7						—						11,200
Equipment Note 3						12/31/2018						3.97%						Semi-annual						5						—						1,953
Equipment Note 4						12/31/2018						4.02%						Semi-annual						7						—						2,108
Equipment Note 5						12/31/2018						4.01%						Semi-annual						7						—						1,751
Equipment Note 6						6/25/2019						2.89%						Semi-annual						7						12,896						14,286
Equipment Note 7						6/24/2019						3.09%						Semi-annual						5						6,980						9,033
Equipment Note 8						12/27/2019						2.75%						Semi-annual						5						5,513						6,496
Equipment Note 9						12/24/2019						3.01%						Semi-annual						7						4,031						4,534
																														29,420						62,004
Total debt																														29,420						165,824
Less: current portion of long-term debt																														(4,381)						(8,737)
Long-term debt																														$	25,039					$	157,087

Credit Agreement

On September 13, 2019, the Company entered into a five-year amended and restated credit agreement (the “Credit Agreement”) with a syndicate of banks led by JPMorgan Chase Bank, N.A. and Bank of America, N.A, that provides for a $375 million facility (the “Facility”), subject to certain financial covenants as defined in the Credit Agreement, which can be used for revolving loans and up to $150 million may be used for letters of credit. The Facility also allows for revolving loans and letters of credit in Canadian dollars and other currencies, up to the U.S. dollar equivalent of $75 million. The Company has an expansion option to increase the commitments under the Facility or enter into incremental term loans, subject to certain conditions, by up to an additional $200 million upon receipt of additional commitments from new or existing lenders. Subject to certain exceptions, the Facility is secured by substantially all of the assets of the Company and its domestic subsidiaries, and by a pledge of substantially all of the capital stock of the Company’s domestic subsidiaries and 65% of the capital stock of the direct foreign subsidiaries of the Company. Additionally, subject to certain exceptions, the Company’s domestic subsidiaries also guarantee the repayment of all amounts due under the Credit Agreement. If an event of default occurs and is continuing, on the terms and subject to the conditions set forth in the Credit Agreement, amounts outstanding under the Facility may be accelerated and may become or be declared immediately due and payable. Borrowings under the Credit Agreement are used for refinancing existing indebtedness, working capital, capital expenditures, acquisitions, share repurchases, and other general corporate purposes.

Amounts borrowed under the Credit Agreement bear interest, at the Company’s option, at a rate equal to either (1) the Alternate Base Rate (as defined in the Credit Agreement), plus an applicable margin ranging from 0.00% to 0.75%; or (2) Adjusted LIBO Rate (as defined in the Credit Agreement) plus an applicable margin ranging from 1.00% to 1.75%. The applicable margin is determined based on the Company’s consolidated leverage ratio (the “Leverage Ratio”) which is defined in the Credit Agreement as Consolidated Total Indebtedness (as defined in the Credit Agreement) divided by Consolidated EBITDA (as defined in the Credit Agreement). Letters of credit issued under the Facility are subject to a letter of credit fee of 1.00% to 1.75% for non-performance letters of credit or 0.50% to 0.875% for performance letters of credit, based on the Company’s consolidated Leverage Ratio. The Company is subject to a commitment fee of 0.15% to 0.25%, based on the Company’s consolidated Leverage Ratio, on any unused portion of the Facility. The Credit Agreement restricts certain types of payments when the Company’s consolidated Leverage Ratio exceeds 2.50 or the Company’s consolidated Liquidity (as defined in the Credit Agreement) is less than $50 million. The weighted average interest rate on borrowings outstanding on the Facility for the year ended December 31, 2020 was 2.35% per annum.

Under the Credit Agreement, the Company is subject to certain financial covenants and is limited to a maximum consolidated Leverage Ratio of 3.0 and a minimum interest coverage ratio of 3.0, which is defined in the Credit Agreement as Consolidated EBITDA (as defined in the Credit Agreement) divided by interest expense (as defined in the Credit Agreement). The Credit Agreement also contains covenants including limitations on asset sales, investments, indebtedness and liens. The Company was in compliance with all of its financial covenants under the Credit Agreement as of December 31, 2020.

As of December 31, 2020, the Company had letters of credit outstanding under the Facility of approximately $10.4 million, including $9.8 million related to the Company’s payment obligation under its insurance programs and approximately $0.6 million related to contract performance obligations.

As of December 31, 2019, the Company had letters of credit outstanding under the Facility of approximately $10.6 million, including $10.0 million related to the Company’s payment obligation under its insurance programs and approximately $0.6 million related to contract performance obligations.

The Company had remaining deferred debt issuance costs totaling $1.1 million as of December 31, 2020, related to the line of credit. As permitted under ASU No. 2015-15, debt issuance costs have been deferred and are presented as an asset within other assets, which is amortized as interest expense over the term of the line of credit.

Equipment Notes

The Company has entered into a Master Equipment Loan and Security Agreement (the “Master Loan Agreement”) with multiple lending banks. The Master Loan Agreement may be used for the financing of equipment between the Company and lending banks pursuant to one or more “Equipment Notes”. Each Equipment Note executed under the Master Loan Agreement constitutes a separate, distinct and independent financing of equipment and a contractual obligation of the Company, which may contain prepayment clauses.

As of December 31, 2020, the Company had four Equipment Notes outstanding under the Master Loan Agreement that are collateralized by equipment and vehicles owned by the Company. The following table sets forth our remaining principal payments for the Company’s outstanding Equipment Notes as of December 31, 2020:

(in thousands)						Future Equipment Notes Principal Payments
2021						$	4,381
2022						4,511
2023						4,645
2024						7,102
2025						2,189
Thereafter						6,592
Total future principal payments						$	29,420
Less: current portion of equipment notes						(4,381)
Long-term principal obligations						$	25,039

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- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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