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Debt
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt

NOTE 9. DEBT

Current and long-term debt obligations consisted of the following as of September 30, 2024 and December 31, 2023:

 

(in thousands)

 

September 30,
2024

 

 

December 31,
2023

 

Current portion of long-term debt and finance lease obligations:

 

 

 

 

 

 

Term loan

 

$

5,000

 

 

$

5,000

 

Finance lease obligations

 

 

5,695

 

 

 

4,824

 

Total current portion of long-term debt and finance lease obligations

 

 

10,695

 

 

 

9,824

 

Long-term debt and finance lease obligations:

 

 

 

 

 

 

Term loan

 

 

7,679

 

 

 

12,711

 

Revolving credit facility

 

 

—

 

 

 

23,200

 

Finance lease obligations

 

 

5,188

 

 

 

5,319

 

Total long-term debt and finance lease obligations

 

 

12,867

 

 

 

41,230

 

Less: Debt issuance costs, net

 

 

(516

)

 

 

(664

)

Total long-term portion of debt and finance lease obligations, net

 

 

12,351

 

 

 

40,566

 

Total debt and finance lease obligations, net

 

$

23,046

 

 

$

50,390

 

Term Loan and Revolving Credit Facility

The Company’s Second Amended and Restated Revolving Credit, Term Loan, Guaranty and Security Agreement (as amended, the “Second A&R Credit Agreement”) dated June 10, 2022, governs separate debt facilities referred to as the Term Loan and the Revolving Credit Facility. The Second A&R Credit Agreement also includes additional borrowing capacities, including swing loans and letters of credit, which the Company has not utilized. The Second A&R Credit Agreement defines the Company as a

borrower and PNC Bank, National Association (“PNC”) as the agent. The Term Loan and the Revolving Credit Facility are secured by substantially all of the assets of the Company and certain of its subsidiaries, subject to certain customary exclusions. As of September 30, 2024, the Company has no outstanding balance on the Revolving Credit Facility; however, borrowing capacity available on the Revolving Credit Facility was $90.8 million.

Debt Modifications. The original Amended and Restated Revolving Credit Facility, Term Loan and Guaranty and Security Agreement (as amended prior to the Second A&R Credit Agreement, the “A&R Credit Agreement”) was dated June 10, 2019. In November 2020, the Company entered into the Fourth Amendment to the A&R Credit Agreement (the “Fourth Amendment”), which became effective in March 2021. The Fourth Amendment included modifications to require quarterly principal payments on the Term Loan, followed by a final payment of all unpaid principal and accrued and unpaid interest on the then-maturity date of June 10, 2022.

The Second A&R Credit Agreement includes modifications to the definition of EBITDA and the applicable interest rate and an extension of the maturity date to June 10, 2026. The Second A&R Credit Agreement was composed of a $90.0 million Revolving Credit Facility, $20.0 million uncommitted accordion feature on the Revolving Credit Facility and $24.4 million Term Loan. The Second A&R Credit Agreement requires the Company to make quarterly principal payments on the Term Loan of $1.25 million on the first day of each quarter, followed by a final payment of all unpaid principal and accrued and unpaid interest on the maturity date.

In April 2023, the Second A&R Credit Agreement was amended to permit the DWS acquisition in May of 2023. Refer to Note 3. Mergers and Acquisitions for discussion of the DWS acquisition. The April 2023 amendment also increased borrowing availability of the Revolving Credit Facility to $110.0 million, increased borrowing availability of the Term Loan to $25.0 million and included a requirement to maintain $15.0 million of Revolving Credit Facility availability at closing of the DWS transaction.

In December 2023, the Second A&R Credit Agreement was amended to permit the repayment in full of the Subordinated Notes prior to the maturity date.

In June 2024, the Second A&R Credit Agreement was amended to permit the change in control event and payment of the cash dividend contemplated by the Merger Agreement. Refer to Note 3. Mergers and Acquisitions for discussion of the Merger.

We performed a debt modification analysis in accordance with ASC 470 and concluded that the modifications align with modification accounting. There is no gain or loss resulting from the Second A&R Credit Agreement. We were in compliance with our debt covenants at September 30, 2024 and December 31, 2023.

Interest Expense. Interest expense for the Second A&R Credit Agreement is calculated based on fixed and floating rate components, displayed below:

 

Agreement Version:

 

Second A&R Credit Agreement

Credit Facility

 

Term SOFR* + 1.75%

Term Loan

 

Term SOFR* + 2.00%

(Note: * Forward-looking rate based on the Secured Overnight Financing Rate.)