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Note 10 - Debt
 9 Months Ended
Sep. 30, 2022
Notes to Financial Statements  
Debt Disclosure [Text Block]

10.

 DEBT

 

The Company has a Credit and Security Agreement with KeyBank National Association (as amended, the "credit agreement" or the "CSA").  The CSA provides a $175 million 5-year senior secured revolving credit facility ("Revolver"), with a sublimit of up to $10 million available for letters of credit and a sublimit of up to $5 million available for swing line loans.  The Company had $110.0 million and $112.5 million in outstanding borrowings under the Revolver at  September 30, 2022 and  December 31, 2021, respectively.  Revolving loans borrowed under the CSA mature on  September 1, 2026.        

 

The weighted-average interest rate in effect for the variable-rate portion of our outstanding borrowings ($50.0 million at September 30, 2022 and $52.5 million at December 31, 2021) was 4.37% at September 30, 2022 and 1.60% at December 31, 2021 and consisted of LIBOR plus the Company’s credit spread, as determined per the terms of the CSA. In order to manage our interest rate exposure on the remaining borrowings, and as further described in Note 9, "Derivative Instruments and Hedging Activities", the Company is party to the 2021 Swaps, each with an aggregate notional amount of $30 million, or $60 million in the aggregate, the effect of which is to fix the LIBOR portion of the interest rate on a portion of our outstanding debt on our Revolver. The 2021 Swaps require the Company to pay interest on the notional amount at the rate of 1.3055% and 1.3180%, respectively, in exchange for the one-month LIBOR rate. The effective rate of interest for our outstanding borrowings, including the impact of the 2021 Swaps, was 3.38% and 2.92%, respectively, during the three and nine months ended September 30, 2022. The Company incurred $0.9 million and $1.5 million of interest expense during the three months ended September 30, 2022 and September 30, 2021, respectively, and $2.4 million and $3.0 million during the nine months ended September 30, 2022 and 2021, respectively in connection with interest due on its outstanding borrowings under the CSA during each period, the effects of the 2021 Swaps and amortization of deferred financing costs.    

 

The CSA contains customary representations and warranties, covenants and events of default.  In addition, the CSA contains financial covenants that measure (i) the ratio of the Company’s total funded indebtedness, on a consolidated basis, less the aggregate amount of all unencumbered cash and cash equivalents, to the amount of the Company’s consolidated EBITDA (“Leverage Ratio”) and (ii) the ratio of the amount of the Company’s consolidated EBITDA to the Company’s consolidated fixed charges (“Fixed Charge Coverage Ratio”).  If an event of default occurs, the lenders under the CSA would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor.  At September 30, 2022, the Company was in compliance with its debt covenants, including its most restrictive covenant, the Fixed Charge Coverage Ratio. 

 

Subsequent to September 30, 2022, the Company made a voluntary payment of $10.0 million towards its Revolver balance, bringing the outstanding borrowings under the Revolver to $100.0 million as of October 31, 2022.