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Debt | 12 Months Ended
--- | ---
Dec. 31, 2024
Debt Disclosure [Abstract] |
Debt | NOTE 9. DEBT Current and long-term debt obligations consisted of the following as of December 31, 2024 and 2023:
(in thousands) |  | December 31, 2024 |  |  | December 31, 2023 |
Current portion of long-term debt and finance lease obligations: |  |  |  |  |  |
Term loan |  | $ | 5,000 |  |  | $ | 5,000 |
Finance lease obligations |  |  | 5,467 |  |  |  | 4,824 |
Total current portion of long-term debt and finance lease obligations |  |  | 10,467 |  |  |  | 9,824 |
Long-term debt and finance lease obligations: |  |  |  |  |  |
Term loan |  |  | 6,429 |  |  |  | 12,711 |
Revolving credit facility |  |  | 14,000 |  |  |  | 23,200 |
Finance lease obligations |  |  | 4,878 |  |  |  | 5,319 |
Total long-term debt and finance lease obligations |  |  | 25,307 |  |  |  | 41,230 |
Less: debt issuance costs, net |  |  | (406 | ) |  |  | (664 | )
Total long-term portion of debt and finance lease obligations, net |  |  | 24,901 |  |  |  | 40,566 |
Total debt and finance lease obligations, net |  | $ | 35,368 |  |  | $ | 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 the 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 December 31, 2024, the Company had $14.0 million outstanding on the Revolving Credit Facility, and borrowing capacity available on the Revolving Credit Facility was $77.6 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 November 2022, the Second A&R Credit Agreement was amended to permit the Pride acquisition in August of 2022. 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 Pride and DWS acquisitions. 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 (as defined below) prior to the maturity date. In June 2024, the Second A&R Credit Agreement was amended to permit the change in control event, the payment of the cash dividend contemplated by the Merger Agreement and the acquisition of the 80% issued and outstanding equity securities of DWS not then owned by the Company. Refer to Note 3. Mergers and Acquisitions for discussion of the Merger. On February 27, 2025, we entered into a new credit agreement to replace the Second A&R Credit Agreement. Refer to Note 19. Subsequent Events for more details. 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 December 31, 2024 and 2023. Interest Expense. Interest expense for the A&R Credit Agreement and the Second A&R Credit Agreement is calculated based on fixed and floating rate components, displayed below:
Agreement Version: |  | A&R Credit Agreement |  | Second A&R Credit Agreement
Credit Facility |  | LIBOR* + 3.00% |  | Term SOFR** + 1.75%
Term Loan |  | LIBOR* + 3.25% |  | Term SOFR** + 2.00%
(Note: *London Interbank Offered Rate; ** Forward-looking rate based on the Secured Overnight Financing Rate.) For the years ended December 31, 2024, 2023 and 2022, the Company’s effective interest rate on the term loan was approximately 8.77%, 7.61% and 4.79%, respectively, and the effective interest rate on the revolving line of credit was approximately 9.34%, 9.56% and 7.28%, respectively. The Company has no capitalized interest for the years ended December 31, 2024, 2023 and 2022. Subordinated Debt On June 10, 2019, in conjunction with multiple acquisitions, Legacy Innovex issued subordinated notes totaling approximately $11.9 million (collectively, the “Subordinated Notes”) payable to the sellers as part of the consideration paid by Legacy Innovex for the acquired assets. In connection with the December 2023 amendment to the Second A&R Credit Agreement, the lenders consented and agreed to the repayment in full of the Subordinated Notes prior to the maturity date notwithstanding anything to the contrary in the Subordination Agreements, and each such Subordinated Note was repaid in full in December 2023. Maturities of Debt Future contractual maturities of long-term debt, excluding finance leases, are as follows:
(in thousands) |  |  |
2025 |  | $ | 5,000 |
2026 |  |  | 19,000 |
2027 |  |  | 1,429 |
2028 |  |  | — |
2029 |  |  | — |
Total |  | $ | 25,429 |

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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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