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Senior Debt | 9 Months Ended
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Sep. 30, 2024
Debt Disclosure [Abstract] |
Senior Debt | 8. Senior Debt Debt as of September 30, 2024 and December 31, 2023 consisted of the following:
(in thousands) |  | September 30, 2024 |  |  | December 31, 2023 |
Outstanding borrowings under Credit Facility (defined below) Term loan payable in quarterly principal installments of $550 through September 2023, $2,232 through September 2025 and $2,977 thereafter with balance due upon maturity in December 2026 |  |  |  |  |  |
Term loan |  | $ | 105,727 |  |  | $ | 112,424 |
Revolving credit facility |  |  | 20,900 |  |  |  | 17,300 |
Total outstanding borrowings under the Credit Facility |  |  | 126,627 |  |  |  | 129,724 |
Outstanding borrowings under the joint venture term debt |  |  | 7,710 |  |  |  | 8,855 |
Unamortized debt discount |  |  | (939 | ) |  |  | (1,296 | )
Total outstanding borrowings |  |  | 133,398 |  |  |  | 137,283 |
Less: current portion |  |  | (10,580 | ) |  |  | (10,488 | )
Total debt, less current portion |  | $ | 122,818 |  |  | $ | 126,795 |
Scheduled principal payments under the Credit Facility and joint venture term debt are $2.6 million for the remainder of 2024, $11.3 million in 2025, $116.5 million in 2026, $3.9 million in 2027, and zero in 2028. Credit Facility As of September 30, 2024 and December 31, 2023, $13.8 million and $13.3 million of letters of credit were outstanding, respectively. Total unused credit availability, in consideration of borrowing limitations, under the Company’s senior secured term loan and senior secured revolver loan with sub-facilities for letters of credit, swing-line loans and senior secured multi-currency loans (the "Credit Facility") was $82.7 million and $109.4 million at September 30, 2024 and December 31, 2023, respectively. Revolving loans may be borrowed, repaid and reborrowed until December 17, 2026, at which time all outstanding balances of the Credit Facility must be repaid. At the Company’s option, revolving loans and the term loans accrue interest at a per annum rate based on (a) either the highest of (i) the federal funds rate plus 0.5%, or (ii) the prime lending rate of the Agent (as defined in the Credit Facility), (b) Daily Simple SOFR plus the Daily Simple SOFR Adjustment of 0.11% plus 1.0%, (c) 1.0%, plus a margin ranging from 1.75% to 3.25% depending on the Company’s Consolidated Leverage Ratio, or (d) a one/three/six-month Term SOFR Rate (as defined in the Credit Facility) plus the Term SOFR Adjustment ranging from 0.11% to 0.43% p lus 1.75% to 3.25% depending on the Company’s Consolidated Leverage Ratio. Interest on swing line loans is the Base Rate. Interest on Base Rate loans is payable quarterly in arrears on the last day of each calendar quarter and at maturity. Interest on Term SOFR rate loans is payable on the last date of each applicable Interest Period (as defined in the agreement), but in no event less than once every three months and at maturity. The weighted average stated interest rate on outstanding borrowings was 7.33% and 8.29% at September 30, 2024 and December 31, 2023, respectively. The effective interest rate was 8.09% and 7.70% at September 30, 2024 and December 31, 2023, respectively. Under the terms of the Credit Facility, the Company is required to maintain certain financial covenants, including the maintenance of a Consolidated Net Leverage Ratio (as defined in the Credit Facility). In the third quarter of 2023, the Company entered into an Elevated Ratio Period resulting in a maximum Consolidated Net Leverage Ratio of 4.00 through June 30, 2024, after which time it decreased to 3.50 until the end of the term of the Credit Facility. The Company has granted a security interest in substantially all of its assets to secure its obligations pursuant to the Credit Facility. The Company’s obligations under the Credit Facility are guaranteed by the Company’s domestic subsidiaries and such guaranty obligations are secured by a security interest on substantially all the assets of such subsidiaries, including certain real property. The Company’s obligations under the Credit Facility may also be guaranteed by the Company’s material foreign subsidiaries to the extent no adverse tax consequences would result to the Company. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all related financial and other restrictive covenants under the Credit Facility. On October 7, 2024, the Company entered into the Third Amended and Restated Credit Agreement which amends and restates in its entirety the Company’s Credit Facility. The amended credit agreement provides for a senior secured revolving credit facility in an initial aggregate principal amount of up to $400.0 million. See Note 17 for further information. Joint Venture Debt On March 7, 2022, the Company's Effox-Flextor-Mader, Inc. joint venture ("EFM JV"), for which the Company holds 63% of the equity, entered into a loan agreement secured by the assets of the EFM JV in the aggregate principal amount of $11.0 million for the acquisition of General Rubber, LLC ("GRC"). As of September 30, 2024 and December 31, 2023, $7.7 million and $8.9 million was outstanding under the loan, respectively. Principal will be paid back to the lender monthly with the final installment due by February 27, 2027. Interest is accrued at the per annum rate based on EFM JV's choice of the 1/3/6 month Term SOFR rate plus 3.25%, with a floor rate of 3.75%. Interest is paid monthly on the last day of each month. The interest rate at September 30, 2024 and December 31, 2023 was 7.96% and 8.70%, respectively. As of September 30, 2024 and December 31, 2023, the EFM JV was in compliance with all related financial and other restrictive covenants under this loan agreement. This loan balance does not impact the Company’s borrowing capacity or the financial covenants under the Credit Facility. As of September 30, 2024, there were $16.9 million in current assets, $25.8 million in long-lived assets, and $31.3 million in total liabilities related to the EFM JV included in the Condensed Consolidated Balance Sheets. As of December 31, 2023, there were $14.5 million in current assets, $26.7 million in long-lived assets, and $12.5 million in total liabilities related to the EFM JV included in the Consolidated Balance Sheets. For the three months ended September 30, 2024 and 2023, the EFM JV accounted for $10.7 million and $9.0 million in revenue, respectively, included in the Company's results. For the nine months ended September 30, 2024 and 2023, the EFM JV accounted for $34.6 million and $28.3 million in revenue, respectively, included in the Company's results. For the three months ended September 30, 2024 and 2023, the EFM JV accounted for $1.2 million and $1.0 million in net income, respectively, included in the Company's results. For the nine months ended September 30, 2024 and 2023, the EFM JV accounted for $3.9 million and $3.0 million in net income, respectively, included in the Company's results. Foreign Debt The Company has a number of bank guarantee facilities and bilateral lines of credit in various foreign countries currently supported by cash, letters of credit or pledged assets and collateral under the Credit Facility. In March 2023, the Company amended the Credit Facility, allowing letters of credit and bank guarantee issuances of up to $80.0 million from the bilateral lines of cred it secured through pledged assets and collateral under the Credit Facility. As of September 30, 2024 and December 31, 2023, $46.3 million and $45.8 million in bank guarantees were outstanding, respectively, inclusive of $1.7 million and $1.3 million in outstanding bank guarantees as of September 30, 2024 and December 31, 2023, respectively, under a Euro-denominated bank guarantee agreement held by a subsidiary of the Company located in the Netherlands and secured by local assets, as well as $2.4 million and $2.3 million in outstanding bank guarantees as of September 30, 2024 and December 31, 2023, respectively, under Yuan-denominated bank guarantee agreements held by a subsidiary of the Company located in China and secured by local assets.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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