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v3.25.4

Debt | 12 Months Ended
--- | ---
Dec. 31, 2025
Debt Disclosure [Abstract] |
Debt | Debt Long-term debt consists of the following obligations as of:
(in thousand s) | December 31, 2025 |  | December 31, 2024
Wintrust Revolving Loans | $ | 10,000 |  |  | $ | 10,000 |
Finance leases – collateralized by vehicles, payable in monthly installments of principal, plus interest ranging from 4.40% to 8.60% through 2031 | 20,570 |  |  | 11,888 |
Financing liability | 5,351 |  |  | 5,351 |
Total debt | $ | 35,921 |  |  | $ | 27,239 |
Less – Current portion of long-term debt | (5,031) |  |  | (3,314) |
Less – Unamortized discount and debt issuance costs | (354) |  |  | (371) |
Long-term debt | $ | 30,536 |  |  | $ | 23,554 |
Maturities of long-term debt and finance leases at December 31, 2025 are as follows:
(in thousands) |
2026 | $ | 5,031 |
2027 | 4,496 |
2028 | 4,023 |
2029 | 4,407 |
2030 and thereafter | 17,964 |
Total | $ | 35,921 |
Wintrust Revolving Loans The Company maintains a senior secured revolving credit facility with Wheaton Bank & Trust Company, N.A., a subsidiary of Wintrust Financial Corporation (collectively, “Wintrust”), as administrative agent, pursuant to a Second Amended and Restated Credit Agreement originally entered into on May 5, 2023. On June 27, 2025, LFS, LHLLC, and other designated parties entered into a second amendment to the second amended and restated Wintrust Credit Agreement (the “Second Amendment to the Second A&R Wintrust Credit Agreement”) with Wintrust, as administrative agent, and the other lenders party thereto. The Second Amendment to the Second A&R Wintrust Credit Agreement provides for, among other things, (i) an upsize of the aggregate principal amount of the senior secured revolving credit facility from $50.0 million to $100.0 million, (ii) modifying the definition of “L/C Sublimit” to increase the sublimit for the issuance of letters of credit from $10.0 million to $20.0 million, (iii) an extension of the revolving credit scheduled maturity date from February 24, 2028 to July 1, 2030, (iv) a decrease in the applicable margins for Term SOFR and Prime Rate (each defined in the Second Amendment to the Second A&R Wintrust Credit Agreement) revolving loans as determined with reference to LFS’s Senior Leverage Ratio (as defined in the Second Amendment to the Second A&R Wintrust Credit Agreement), (v) a term loan conversion feature, allowing LFS, subject to certain conditions, to convert outstanding revolving loans into one or more term loan tranches, (vi) the removal of certain covenant requirements, specifically in relation to LFS’s Borrowing Base, as formerly defined in the Second A&R Wintrust Credit Agreement, and (vii) modification to certain defined terms to reflect updated operational and financial terms. Following the execution of the Second Amendment to the Second A&R Wintrust Revolving Loan, the Second A&R Wintrust Revolving Loan bears interest, at LFS’s option, at either the Term SOFR (with a 0.15% floor) plus 2.50% or the Prime Rate (with a 3.0% floor), subject to a 95 basis point step-down based on the ratio between the senior debt of the Company and its subsidiaries to the EBITDA of LFS and its subsidiaries for the most recently ended four fiscal quarters. As of both December 31, 2025 and 2024, the Company had $10.0 million in borrowings outstanding under the Wintrust Revolving Loans. During the years ended December 31, 2025 and 2024, the maximum outstanding borrowings under the Wintrust Revolving Loan at any time was $50.0 million and $10.0 million, respectively, and the average daily balance was $22.3 million and $10.0 million, respectively. For the years ended December 31, 2025 and 2024, the Company incurred interest on the Wintrust Revolving Loans at a weighted average annual interest rate of 6.04% and 5.72%, inclusive of the net impact associated with the Company's interest rate swap arrangement. At December 31, 2025, the Company had irrevocable letters of credit in the amount of $5.1 million with its lender to secure obligations under its self-insurance program and As of December 31, 2025, the Company was in compliance with all financial maintenance covenants as required by the Second A&R Credit Agreement. The following is a summary of the applicable margin and commitment fees payable on the Wintrust Revolving Loan, as amended, credit commitment:
Level |  | Senior Leverage Ratio |  | Applicable Margin for SOFR Revolver loans |  | Applicable Margin for Prime Revolving loans |  | Applicable Margin for commitment fee
I |  | Greater than 1.00 to 1.00 |  | 2.50 | % |  | (0.70) | % |  | 0.25 | %
II |  | Less than or equal to 1.00 to 1.00 |  | 2.25 | % |  | (0.95) | % |  | 0.25 | %
Interest Rate Swap The Company is party to an interest rate swap agreement to manage the risk associated with a portion of its variable-rate long-term debt. The interest rate swap involves the exchange of fixed rate and variable-rate payments without the exchange of the underlying notional amount on which the interest payments are calculated. The swap agreement became effective on July 14, 2022 and will terminate on July 31, 2027. The notional amount of the swap agreement is $10.0 million with a fixed interest rate of 3.12% plus the SOFR Applicable Margin. If the one-month SOFR (as defined in the Second Amendment to the Second A&R Credit Agreement) is above the fixed rate, the counterparty pays the Company, and if the one-month SOFR is less than the fixed rate, the Company pays the counterparty, the difference between the fixed rate of 3.12% and the one-month SOFR. The Company has not designated this instrument as a hedge for accounting purposes. As a result, the change in fair value of the derivative instrument is recognized directly in earnings on the Company's consolidated statements of operations as a gain or loss on interest rate swap. Sale-Leaseback Financing Transaction On September 29, 2022, the Company completed a sale and leaseback transaction related to its facility in Pontiac, Michigan (the “Pontiac Facility”), with an aggregate transaction value of approximately $7.8 million, consisting of a purchase price of approximately $5.4 million and up to $2.4 million of tenant improvement allowances. In connection with the transaction, the Company entered into a 25-year lease agreement with two five-year renewal options. Annual minimum rent is approximately $0.5 million, payable monthly and subject to annual escalations of approximately 2.5%. The lease includes a one-time termination option at the end of the fifteenth lease year, which would require payment of a termination fee of approximately $1.7 million if exercised. The Company accounted for the transaction as a failed sale-leaseback and financing arrangement under ASC 842, as the lease was classified as a finance lease and control of the property did not transfer. Accordingly, no gain or loss was recognized, and the property was not derecognized from the Company’s consolidated balance sheets. Proceeds received were recorded as a financing liability and are repaid through lease payments, which are allocated between principal and interest. As of December 31, 2025, the financing liability was $5.0 million, net of issuance costs, which was recognized within long-term debt on the Company's consolidated balance sheets. Interest expense associated with the financing was approximately $0.5 million for each of the years ended December 31, 2025, 2024 and 2023.

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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 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 8A -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A Reference 2: http://www.xbrl.org/2003/role/disclosureRef 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