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Debt | 6 Months Ended
--- | ---
Jun. 30, 2024
Debt Disclosure [Abstract] |
Debt | NOTE 8 – DEBT The outstanding amounts of debt were as follows (in thousands):
|  | June 30, 2024 |  |  | December 31, 2023 |
2021 Refinanced Term Loan B |  |  | — |  |  | $ | 601,250 |
2024 Term Loan B |  | $ | 549,111 |  |  |  | — |
Unamortized debt discount and issuance costs |  |  | (13,501 | ) |  |  | (15,555 | )
|  |  | 535,610 |  |  |  | 585,695 |
Less: current portion, net of debt discount and issuance costs |  |  | (24,753 | ) |  |  | (66,145 | )
Total long-term debt, net of current portion |  | $ | 510,857 |  |  | $ | 519,550 |
Term Loan B On June 8, 2021, the Company entered into Amendment No. 1 (“Amendment No. 1”) to that certain Credit Agreement dated June 1, 2020 by and among the Company, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the “2020 Credit Agreement”). The 2020 Credit Agreement initially provided for a five-year senior secured term loan B facility in an aggregate principal amount of $1,050 million (the “2020 Term Loan B Facility”). In connection with Amendment No. 1, the Company made a voluntary prepayment of $50.6 million of the term loan outstanding under the 2020 Credit Agreement using cash on hand. Amendment No. 1 provided for, among other things, (i) a new tranche of term loans (the “2021 Refinanced Term Loan B”) in an aggregate principal amount of $810.0 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of base rate loans, 2.50% per annum and (y) in the case of Eurodollar loans, LIBOR plus a margin of 3.50% per annum, (iii) a prepayment premium of 1.00% in connection with any repricing transaction with respect to the 2021 Refinanced Term Loan B within six months of the closing date of Amendment No. 1, (iv) an extension of the maturity to June 8, 2028, and (v) certain additional amendments, including amendments to provide the Company with additional flexibility under the covenant governing restricted payments. On May 30, 2023, the Company entered into Amendment No. 2 (“Amendment No. 2”) to the 2020 Credit Agreement, to replace the reference to LIBOR as the base rate with the reference to the Secured Overnight Financing Rate “SOFR” as administered by the Federal Reserve Bank of New York. The new reference rate was effective July 1, 2023. On May 20, 2024, the Company entered into Amendment No. 3 (“Amendment No. 3”) to the 2020 Credit Agreement, which provided for, among other things, (i) a repricing of the 2020 Term Loan B Facility through a refinancing of the entire amount of the 2021 Refinanced Term Loan B with a new tranche of term loans (the “2024 Term Loan B”) in an aggregate principal amount of $561.1 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of SOFR loans, SOFR plus a margin of 3.00% per annum and (y) in the case of base rate loans, 2.00% per annum, (iii) a reduction in the excess cash flow mandatory payment thresholds and (iv) a prepayment premium of 1.00% in connection with any repricing transaction with respect to the 2024 Term Loan B within six months of the closing date of Amendment No. 3. The 2024 Term Loan B will mature on June 8, 2028, the same date upon which the 2021 Refinanced Term Loan B matured prior to giving effect to Amendment No. 3. The obligations under the 2020 Credit Agreement, inclusive of any changes by Amendment No. 1, Amendment No. 2 and Amendment No. 3, continue to be guaranteed by the Company’s wholly-owned material domestic subsidiaries (collectively, the “Guarantors”) and continue to be secured by a lien on substantially all of the assets of the Company and the Guarantors. The 2020 Credit Agreement, as amended, contains customary events of default, upon the occurrence of which, after any applicable cure period, the lenders will have the ability to accelerate all outstanding loans thereunder. The 2020 Credit Agreement, as amended, also contains customary representations and warranties and affirmative and negative covenants that, among other things and subject to certain exceptions, restrict the ability of the Company and its subsidiaries to create or incur certain liens, incur or guarantee additional indebtedness, merge or consolidate with other companies, transfer or sell assets and make restricted payments. The Separation did not require the Company to obtain any waivers under the 2020 Credit Agreement, and the Company completed the Separation in compliance with all of the covenants contained in the 2020 Credit Agreement. The 2020 Credit Agreement, as amended, requires the Company to maintain a total net leverage ratio of no greater than 3.00x in order access an annual basket from which to make restricted payments (such as dividend payments and share repurchases). The Company was in compliance with all requirements as of June 30, 2024. The 2020 Credit Agreement, as amended, also requires the Company to continue to make cash payments on an annual basis based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year. The cash payments are applied to the remaining principal balance due at final maturity. Interest Expense and Expected Principal Payments At June 30, 2024, the Company had $549.1 million in total debt outstanding. There were also $13.5 million of unamortized debt discount and issuance costs recorded as a reduction from the carrying amount of the debt. The interest rate on the 2024 Term Loan B as of June 30, 2024, including the amortization of debt discount and issuance costs, was 9.6% and interest is payable monthly. Interest expense was $12.9 million and $25.4 million for the three and six months ended June 30, 2024, respectively. Interest expense was $15.4 million and $31.3 million for the three and six months ended June 30, 2023, respectively. Amortized debt discount and issuance costs, which were included in interest expense, amounted to $0.9 million and $1.6 million for the three and six months ended June 30, 2024, respectively, and $1.1 million and $2.2 million for the three and six months ended June 30, 2023, respectively. As of June 30, 2024, future minimum principal payments for long-term debt, excluding any additional principal payment required by the excess cash flow provision, are summarized as follows (in thousands):
|  | Amounts |
2024 (remaining 6 months) |  | $ | 14,028 |
2025 |  |  | 28,056 |
2026 |  |  | 28,056 |
2027 |  |  | 28,056 |
2028 |  |  | 450,915 |
Total |  | $ | 549,111 |

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